On the heels of its IPO filing, Swedish fintech giant Klarna announced on Monday that it will exclusively provide buy now, pay later loans for Walmart. The partnership with Walmart is one that rival Affirm had previously owned.
Klarna will provide the loans to Walmart customers through OnePay, a fintech startup in which it owns a majority stake and is also backed by Ribbit Capital. Klarna will take over providing the loans “later this year,” it said in a statement.
San Francisco-based Affirm’s stock took a hit on the news, down 8% by early afternoon on Monday, trading at just over $46.
The two companies have been rivals for years although Affirm is more focused on the United States. It went public in 2021 and recently announced that it has achieved $80 million in GAAP net income. Klarna, after suffering a massive blow to its valuation, has made a comeback of sorts and reported a net profit of $21 million in 2024, a huge swing from a loss in 2023 of -$244 million.
Last September Affirm CEO and co-founder Max Levchin told PaymentsDive that he wanted to differentiate his company from competitors, including Klarna. One way that it is doing that, he told a technology conference last year, is to focus on earning revenue from individual transactions. Klarna and others have pushed bringing in marketing revenue, he asserted. However, a Klarna spokesperson disputed that, telling the publication that “the bulk of Klarna’s revenue comes from transactions, with a smaller portion drawn from marketing.”
Levchin went on to say that Affirm does not monetize transactions through advertising or marketing.
“I’m not criticizing – it’s not my place to decide those are bad businesses,” he was quoted as saying. “But I love ours, and ours is built around the idea that, ultimately, every transaction needs to make sense financially.”
Klarna’s reach is more global than Affirm’s but it has made a big push into the U.S., telling TechCrunch last April that the U.S. and Germany represented its largest markets but that the U.S. was “gaining all the time and is often largest on a quarterly basis.”
Landing Walmart as a partner will no doubt only increase Klarna’s presence in the U.S. The retailer is the world’s largest by revenue – reporting $441.8 billion in the U.S. alone last year.
Just 5% of Walmart’s U.S. volume would boost Klarna’s total GMV (gross merchandise value) by 28%, the company said in a statement.
