Some cuts and changes are underway in the world of payments in Europe. Today, Klarna, the Swedish startup that works with online merchants to offer flexible payment options, confirmed that it has acquired BillPay, a Germany-based payment company, from its former owner Wonga, the startup that has already gained notoriety for predatory payday loans. .
The companies are not disclosing the deal’s value, but our close sources corroborate a number mentioned in a few reports over the weekend that put the price at around £ 60million ($ 75million). Klarna herself was last valued at $ 2.25 billion in 2015.
The sale is a sign of consolidation for both: Klarna – which offers customers one-touch payment services, as well as the option to pay immediately, pay in installments or pay on delivery – is looking to strengthen its presence in Europe in payments. . Specifically, in this case, it’s about increasing an existing business in Germany, where this is Klarna’s third acquisition (she bought out the team behind the peer-to-peer payment app Cookies in October 2016; and it acquired Sofort in 2013 for $ 150 million). In fact, it looks like alone the acquisitions that Klarna has made over the years have taken place in Germany.
On the flip side, Wonga is pulling back from her ambitions to pivot (or at least expand) her business from loans to payments – which was her original intention when she acquired BillPay in 2013. If you look on Wonga’s site today is all about loans, and not much more. The loss-making company seeks to reduce its costs as part of a recovery plan.
“We are delighted to be working with BillPay and their talented team in Berlin. By combining our skills and expertise, and leveraging BillPay’s in-depth knowledge of the market, product features and consumer offering, we are confident that we can deliver even more innovative payment services to our customers. Klarna co-founder and CEO Sebastian Siemiatkowski said in a statement. “Germany is one of the largest e-commerce markets in the world and we are delighted to have strengthened our position here with this acquisition. “
While Wonga hasn’t been making a lot of headlines lately for its loans – it changed its practices after having to write down 330,000 bad loans in 2014, scrutinize regulators, then divest other assets and lay people off. of employees as part of its restructuring – it seems its name and brand are still not the ones people want to circulate. Klarna’s press release announcing the acquisition makes no mention of the company selling BillPay to Klarna.
BillPay itself was founded in 2009 as one of several e-commerce clones of the Berlin-based Rocket Internet Incubation Factory, where BillPay was designed as Germany’s PayPal (Klarna, d ‘elsewhere, has also been described as Europe’s PayPal when launching business in the United States).
Although many other Rocket clones eventually took hold in other parts of Europe and the world, BillPay focused on dominating one big country: Germany is known as the biggest e-commerce market in Europe. It is also operational in Switzerland, Austria and the Netherlands.
“We are delighted to join the Klarna team. Together we will have a leading market position in Germany, Austria and Switzerland, and will be able to offer our merchants and users very attractive payment options in more international markets in a cross-border e-commerce environment. increasingly important, ”BillPay CEO Nelson Holzner said in a statement.
The size of BillPay’s business is unclear today, but the number of users has grown in recent years. Today, it has 12 million customers in its four markets according to reports. At the time Wonga acquired it, we reported that the company had 2 million users and deals with 3,500 online sites / storefronts, with an annual transaction volume of 300 million euros (409 million of dollars).
This acquisition will make Germany Klarna’s largest market. Klarna tells me that she has 45 million customers and 65,000 merchants / stores worldwide, and BillPay will give her a total of 27 million customers in Germany alone (out of 80 million in this market). It also has 25 million people using its direct payment platform Sofort, a spokesperson said.
But as the market has grown, so have the competitors. In 2017, PayPal is far from the only other company working in online payments, and it’s a crowded and competitive market. Specifically for Klarna, an interesting competitor is Stripe, which is also positioned as a very easy way for third parties to integrate payments into their sites and apps.
Klarna – founded in 2005 by Sebastian Siemiatkowski, Victor Jacobsson and Niklas Adalberth, has to date raised around $ 291 million with donors including several large VCs: Atomico, DST, General Atlantic, IVP, QED and Sequoia.