The Buy Now Pay Later Space Is Getting More Competitive in Europe, As New Startups Sprout Up

For now, Klarna, a fintech company, is the top player in the European BNPL (Buy Now Pay Later) market. The Swedish company is now valued at $11bn and is Europe’s second most highly valued startup, allowing shoppers to defer payments on goods at no cost.

But a report from fintech news site Sifted suggests that Klarna’s leading position is also being threatened by a host of new BNPL startups. Among them are Scalapay, Twisto and France’s Alma, who all announced fundraises of between €16m and €49m in January 2021.

This follows a record funding year in 2020 for the BNPL sector, which raised $1.5bn globally according to CB Insights. A fortnight ago, Affirm, a consumer finance company, also completed its U.S. listing.

Meanwhile, Klarna operates in 12 European countries, having recently expanded into Italy. It acquired fintech company Moneymour there in 2020.

The European BNPL Market Is Still in Its Infancy

With so many new players joining, Klarna’s CEO Sebastian Siemiatkowski says the company is aware of the threat posed by competing products. He told Sifted recently that he’s more worried about the recent sprouting of startups in the European market than traditional fintech companies like PayPal.

At the same time, the European BNPL market is still in its infancy. “You’ve actually got no real European player yet,” Alma chief Louis Chatriot tells Sifted. “Klarna is missing from France, Central Europe, and more.”.

Alma now plans on filling Klarna’s gap itself by offering merchants a comprehensive offering across Europe, buoyed by its latest €49m Series B.