Sweden’s e-payment firm Klarna acquires Germany’s Sofort

Leading Nordic online payment provider Klarna AB has agreed to acquire German market leader Sofort AG to create one of the leading independent European online payment providers and take on larger rivals such as PayPal, Visa and MasterCard.

Klarna will acquire Sofort from its majority shareholder Reimann Investors. Although specific terms of the transaction have not been disclosed, it is believed that the deal is valued at around $150 million.

Further to completion of the deal, both companies will continue to offer their products side by side and operate on stand-alone basis, Klarna said in a statement.

The combined entity will have 10-per cent market share of the $100-billion e-commerce market in which they operate. Together, they will operate in 14 European countries and will have 25 million users and partnerships and work together with 43,000 online merchants, including more than half of Germany's online merchants.

Klarna's CEO and co-founder Sebastian Siemiatkowski said, ''We are delighted to be given the opportunity to work together with the exceptional team at Sofort. Together we have an incredible opportunity to provide the most trusted payment solution to our merchants and make it simpler and safer for consumers to shop online.''

The transaction is subject to approval by Sweden's Financial Supervisory Authority.

Stockholm-based Klarna, founded in 2005, provides payment solutions for online consumers and merchants. Today, Klarna is one of Europe's fastest growing companies with annual revenue of around $200 million.

Klarna offers easy-to-use payment solutions to e-stores in Europe to make e-commerce safer and simpler. At the core of Klarna's services is the concept of after-delivery payment, which lets buyers receive ordered goods before any payment is due.

Klarna also assumes the credit and financial risks for e-stores so that sellers can be assured that they will  receive their payments.

Today, Klarna's payment solutions are integrated by more than 18,000 online shops in Sweden, Norway, Denmark, Finland, Germany, Austria and the Netherlands. The company has over 800 employees and has over 10 million consumers.

Munich-based Sofort offers innovative products for secure payment of merchandise and digital goods on the internet. The company is a market leader in Germany and Austria with its e-banking product Sofort Banking for a direct credit transfer.

Over 25,000 e-commerce shops process over 2.5 million transactions with Sofort Banking per month. The company has around 130 employees and apart from Germany and Austria, the service is available in Switzerland, Belgium, the Netherlands, the UK, Italy, Spain and Poland.

''Sofort and Klarna supplement each other in our service offerings as well as in our growth ambitions,'' Gerrit Seidel, Sofort CEO said.

Majority shareholder Reimann Investors believe the combination has enormous potential to emerge as a leading European provider of online payments.

Klarna has successfully raised $250 million in funding from global investors including Sequoia Capital, DST and General Atlantic.