BNPL Behemoth’s Buying Binge: Klarna’s “SuperApp” Strategy

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The shopping app goes on a shopping spree to shop for other shopping innovators that make shopping convenient…

That’s certainly one tongue-twisting way to describe Klarna’s recent spending splurge that is taking headlines by storm. The “Shopping Super App” left no stone unturned when it came to acquiring and investing its way through the top; all the while setting itself in contrast to what it is known for: a Buy Now, Pay Later (BNPL) service. It’s no news that the Swedish fintech has created quite the buzz around the flamboyant promotion of its brand. However, it is worth noting that this climb wasn’t made through an escalator, but rather a step-by-step ascend on a ladder.

In recent years, the strategic investments that Klarna has cherry-picked in order to maintain its image as a “household brand” have earned it several names, of which the term “Super App” takes the cake. Further investigation on the many layers of this proclaimer reveals the fintech’s simmering journey – from a modest merchant solutions provider to today’s emotion-fueled experience driver. Let’s dig into the many flavors of this vibrant financing giant.

Level 1: Building the Blueprint

Klarna’s handpicked selection of acquisitions and investments is at the heart of its present-day success and acts as a fortress to protect its future. Examining the game plan of this global behemoth, we discover that the Swedish fintech zigzagged its way towards its current vision of a one-stop-shopping destination from the initial idea of refining merchant-consumer relations. In parallel, Klarna laid the bricks in developing a data-driven environment with its first major acquisition back in 2011, with the Israeli payments risk management firm Analyzd coming under its belt. Next, it bagged German payments service provider Sofort in 2013, an acquisition that served to be fruitful in strengthening Klarna’s position as one of the largest independent payments services in Europe. Succeeding this was a series of events from 2016 up until 2018, where Klarna leveraged various benefits of skills, talent, technology, and expansion. With the acquisitions of firms like BillPay (2017) and ShopCo (2018), Klarna saw a paradigm shift from the blue world of payments to the colorful panorama of e-commerce, which resulted in its extension in the German market, one of the largest e-commerce markets in the world. In 2018, it also acquired Close Brothers Retail Finance, a UK-based retail financing unit of merchant banking group Close Brothers Group, which helped Klarna unlock growth and build creative retail financing solutions in the competitive UK market.

The real game-changing era for Klarna came about in 2020, where the actual chain reaction of investments took place, each featuring its own set of unique capabilities to support customers’ purchase journeys. From the accumulation of UK e-commerce company Nuji to gaining US marketplace Spring, Italian BNPL provider MoneyMour, and Swedish software-as-a-service (SaaS) developer Woilà, Klarna grew more inclined towards building customized shopping experiences.

Lifestyle-centric industries such as travel and social commerce are expected to grow across demographics in the coming years. Klarna’s ambition in distinguishing itself from a sea of other BNPL players through “forbidden combinations” constructed on in-house marketing strategy and the essence of “emotion” has led to the fintech unicorn acquiring six companies in 2021. These consumer-centric players, whose names include those of online trip planner Inspirock, SaaS channel for influencer marketing APPRL, comparison-shopping service PriceRunner, social “informative” shopping platform HERO, digitized card service Stocard, and Artificial Intelligence (AI) technology business Toplooks, have served to be catalysts for Klarna’s mission of ensuring people can shop, bank, and pay in ways that suit them.

On similar lines, Klarna has advantageously invested in a diverse range of shopping-focused startups over an expansive geographical map. The four notable investments of London-based one-stop-shop solution Krew, Berlin’s business-focused BNPL Billie, Stockholm’s Wrapp, and Washington’s merchant integration infrastructure provider Violet certainly steal the show.

Level 2: Dissecting the Design

Klarna’s strategic approach in establishing an in-house biome can be credited to six underlying components that paint the big picture behind the buying binge:

    • Geographic Expansion – With the majority of its acquisitions and investments, Klarna’s biggest aim has been to expand its scope beyond fintech globally. Initially, the Swedish fintech giant took baby steps in strengthening its position in the neighboring regions of Europe, with acquisitions like Sofort, BillPay, and ShopCo making it the leading online payments alternative in Germany. Klarna entered the UK market through gaining Close Brothers Retail Finance in 2018 and further built upon entering the US retail space with Spring in 2020. Its slow-cooking progress has helped make it a robust competitor on a global level today, with a 90 million user-base from strong markets across the US, UK, Australia, and Europe.
    • Technological Capabilities – Since the beginning, Klarna has laid deep emphasis on remodeling its services and products based on the latest technologies. As an online platform, it was crucial for the BNPL player to learn and incorporate modern and interactive tools that provide a seamless retail experience. With acquisitions of Analyzd, MoneyMour, HERO, and Toplooks, Klarna has transitioned from a data-directed mindset to creating highly optimized AI-curated shopping ads based on behavioral insights.
    • Talent Pool – In order to reach the height it has today, Klarna prioritized working with internal teams in order to make fast progress. Klarna’s CMO David Sandström was quoted as saying: “I want to have really skilled people that come up with things that are right for us”, and based on this philosophy, subsequently acquired firms like Cookies App, PriceRunner, and Woilà to acqui-hire fresh talent to reinvent the purchasing process.
    • Drive Innovation – Scott McNealy’s words “without innovation, there is nothing” ring a bell when you carefully read between the lines for Klarna’s mammoth sensation. Innovation is one of the main pillars in setting the Swedish fintech ahead in the race of global domination. With every collaboration, the BNPL company has moved a step further in enhancing its game and evolving to the trends of the times. The same is backed by Sebastian Siemiątkowski, CEO and co-founder of Klarna, who was quoted saying: “At the heart of this cooperation between Klarna and Alipay is a shared ambition of innovating truly superior shopping experiences and creating destinations of inspiration for consumers across the world.”
    • Improve Customer Experience – Klarna has come a long way in its journey from the goal of becoming a leading payment alternative in Europe to today’s vision of changing the entire game of viewing payments through the emotion lens. The fintech giant knew that customers and their purchasing journeys are central to the payments landscape, and in order to build a winning trust, one has to cater to the customers’ demands. In short, Klarna understood the assignment and went ahead in turning the tide through the many acquisitions it made throughout 2020-21. “At Klarna we constantly strive to make the banking and payments experience the best it can be, empowering consumers from product discovery to paying in a way that suits them, “ said David Fock, Klarna’s Chief Product Officer at the time of its acquisition of PriceRunner.
    • Increase Customer Base – With certain cases, such as that of the diverse geographical investments across regions like London, Berlin, Washington, and Stockholm, alongside the consolidation of marketplaces like Spring, APPRL, Inspirock, and Stocard, Klarna leveraged a huge customer base by combining forces. This resulted in the quick cumulation of a distinctive set of users across the globe who could equally benefit from the combination of the two groups.

Level 3: Unveiling the “Shopping Super App”

In the present day, Klarna has earned itself the iconic title of a “Super App” as a result of its consistent efforts in tapping innovation across the shopping value chain.

The radical shift from a transactional outlook to bringing the elements of inspiration and emotion into the shopping experience has helped Klarna create a coherent purchasing process that encloses the pre, during, as well as the post-purchase journey for each user.

By integrating retail marketplaces and universal shopping carts and platforms through the likes of Nuji, ShopCo, and Stocard, Klarna has eased the pre-purchase activity for consumers globally. These tools aid in providing consumers with inspiration, a sense of direction, and classify an assortment of high-quality products to plan informed shopping decisions.

They have also focused on merchants by empowering them to produce quality content to aid their marketing and customer acquisition initiatives through the acquisition of APPRL, Spring Marketplace, and Stocard.

With payment service providers and risk management resources like Analyzd, Sofort, and MoneyMour, Klarna in-built a secure getaway for all the transactions taking place through its convenient platform. With multiple payment options that fit the bill of each unique consumer as per their daily needs, accompanied by a transparent system that safeguards every payment made, the fintech’s during-purchase process is just one click away from gaining customer satisfaction.

However, what truly sets Klarna apart from other mainstream BNPL players is the consideration of the post-purchase factor in the shopping journey. The holistic umbrella held by acquisitions of firms like Woilà and Close Brothers Retail Finance – whose market analytics of vouchers, price drops, and options for easy returns and exchange provide flexibility and reduce post-purchase dissonance among consumers – make the buying course more engaging and fun.

And That’s a Wrap…

Through the vertical and horizontal exploration of Klarna’s extensive ecosystem, it is evident that the Swedish giant has consistently been gathering blocks to build a one-of-its-kind “shopping super app”. This notion can be perceived through a two-axis principle:

    • The first throws light on the customer purchasing journey – with tools such as personalized shopping carts, planners, and comparison platforms to ease the pre-purchase step, accompanied by software for fraud prevention, direct or installment-based payments for convenience during the purchase journey, and finally wrapping the blanket of easy-returns, price guarantees, and refunds post-purchase.
    • The second explores the two-way relation between the consumer and retailers, where Klarna’s “Shopping Super App” works as a favorable bridge between the two. For every acquisition or investment made by the fintech to simplify selling of products for merchants and retailers – whether it be into logistics through APIs that help track deliveries, in social e-commerce channels that allow in-store retailers to become the next global ambassadors, or even in the travel industry where retail partners help shop and pay for a trip through installments – it directly or indirectly works in favor of the overall shopping experience of consumers as well.

Through its adept selection of creative masterminds across distinct sectors and industries that are solely shopping experience-focused, it is successfully operating on a hybrid model of functionality with feeling. The vision of recreating a shopping mall-like immersive experience from the comfort of an app puts the e-commerce and online shopping segment on a social pedestal like none other. As for what the future holds for this pink and unconventional BNPL (err… Shopping SuperApp) company, David Sandström, CMO at Klarna, has rightly said (and we couldn’t have put it better ourselves)

“I don’t think this will be a winner-takes-all market. Everyone will find their niche around shopping.”


Founder & CEO | sanjeev@whitesight.net

Sanjeev is a fintech aficionado who loves to explore the depths of the industry as much as he loves to explore the depths of the ocean in his scuba gear. He is the founder and CEO at WhiteSight, bringing a wealth of research and advisory experience to the fintech world.

Senior Branding Associate

Kshitija is a senior branding associate at WhiteSight, crafting branding strategies and fintech content. When she's not conjuring up new ideas for the company, you can find her dabbling in new hobbies and documenting her experiences through writing and short films.

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