BABA Alibaba Group Holding Limited

By Adam Clark

China's Ant Financial Services Group is expanding its presence in Europe with a minority investment in one of the continent's fastest-growing startups, Swedish payments company Klarna, the companies said Wednesday.

Klarna said the investment means its services will be offered more broadly to consumers and merchants using Alibaba, the Chinese e-commerce giant cofounded by Jack Ma which originally housed Ant Financial.

"Alipay, and the wider Alibaba Group, have truly set the global pace on retail innovation and the app economy. We are delighted in this confidence shown in Klarna in defining the future of payments and shopping, and are very much looking forward to working together further in the future," Klarna Chief Executive Sebastian Siemiatkowski said.

Details of the investment weren't disclosed but Reuters reported Ant Financial is taking a stake of less than 1% via a mix of existing and new shares, and the deal values Klarna slightly higher than its last reported $5.5 billion valuation, which made the company one of Europe's most valuable private fintech companies.

Klarna, which says it has 85 million users, offers "pay later" options to online shoppers and assumes the collection risk, but makes most of its money by charging retailers. It already collaborates with Alipay, the payment platform operated by Ant Financial.

The Swedish company was founded in 2005 and received earlier investments from U.S. backers Sequoia Capital and General Atlantic. Last year it reported an investment from rapper Snoop Dogg who has subsequently starred in its advertising.

Ant Financial--last valued in a funding round at around $150 billion--has taken steps to expand its reach outside of China in recent years, including acquiring U.K. money-transfer company WorldFirst for around $700 million in 2019. It previously failed in an effort to acquire MoneyGram International Inc., after being blocked by U.S. authorities.

Write to Adam Clark at adam.clark@wsj.com

(END) Dow Jones Newswires

March 04, 2020 10:38 ET (15:38 GMT)

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