Klarna is set to divest its UK loans book to hedge fund Elliot Advisors in a strategic move to generate £30 billion to support its growth initiatives.
The multi-year agreement involves the ongoing sale of nearly all of Klarna’s short-term, interest-free product receivables in the UK. Klarna has experienced significant growth in the UK, with ten million British consumers using the service over the past year. Additionally, the number of retailers partnering with Klarna in the UK has surged by 33% in the last year, totaling over 40,000.
Despite this sale, Klarna will retain ownership of all consumer-facing activities, including underwriting and servicing. Klarna’s CFO, Niclas Neglén, remarked, “This is a unique deal, designed to support Klarna’s global growth as we continue on our journey to become the commerce network for the next generation. By efficiently managing our assets, we can deploy shareholder equity more effectively to meet the growing demand for Klarna’s products and services for both consumers and merchants globally.”
This transaction follows Klarna’s completion of a three-year initiative to establish a capital offloading platform, which aims to attract institutional investors and enhance its balance sheet in preparation for a potential IPO.