Klarna Closes €1.4 Billion Financing Deal with Santander for Growth

Klarna has secured a €1.4 billion financing facility with Santander, its first warehouse line with the Spanish lender. The deal will allow Klarna to recycle capital more efficiently and reduce its reliance on its balance sheet. The agreement is backed by German receivables and is part of Klarna's strategy to diversify funding sources and reshape its funding base ahead of a potential New York listing.

Klarna, the global digital bank and flexible payments provider, has secured a €1.4 billion financing facility with Santander, its first warehouse line with the Spanish lender. The deal, announced on August 21, 2025, will allow Klarna to recycle capital more efficiently and reduce its reliance on its balance sheet. The agreement is backed by German receivables and is part of Klarna's strategy to diversify funding sources and reshape its funding base ahead of a potential New York listing [1].

"Klarna has executed its inaugural warehouse financing facility with Santander, providing a total funding capacity of up to €1.4 billion," said Niclas Neglén, CFO at Klarna. "This transaction demonstrates strong institutional confidence in Klarna’s platform, product performance, and credit risk management."

The warehouse facility uses Klarna's receivables portfolio in Germany as collateral, allowing the Stockholm-based company to access working capital against future customer payments. This arrangement is significant for Klarna as it operates in the German market since 2010 and has seen accelerating revenue growth, with second-quarter revenue reaching US$823m, representing a 20% year-over-year growth [2].

The deal follows Klarna's US$1.6bn structured financing facility with Santander, marking the Swedish buy now, pay later provider's second major funding arrangement this month. The warehouse structure allows Klarna to monetize its German receivables portfolio while maintaining operational control over customer relationships.

Klarna's partnership with Santander creates an arrangement where the funding provider also operates a competing BNPL service in the same market. This relationship demonstrates evolving dynamics between traditional banks and fintech companies, where competition and collaboration occur simultaneously.

The arrangements come as Klarna reports accelerating revenue growth, with second-quarter revenue reaching US$823m, representing 20% year-over-year growth. Klarna now serves 111 million active consumers through 790,000 merchant partners globally. The global BNPL market is estimated at US$7.63bn currently, with projections suggesting growth to US$38.6bn by 2030, according to CapitalOne research [2].

Klarna announced in November that it confidentially submitted a draft registration for an IPO with the Securities and Exchange Commission and filed for an IPO with the SEC in March. Reports in July suggested the company is considering launching its IPO in September after putting plans on hold in April.

References:
[1] https://www.klarna.com/international/press/klarna-secures-eur-1-4bn-structured-financing-facility-with-santander/
[2] https://fintechmagazine.com/news/how-klarna-secured-us-1-6bn-santander-facility