Fashion giant H&M, which has 4800 stores in 70 different countries worldwide, has invested 20 million dollars in fintech company Klarna. The aim of H&M is to improve the payment experience in both physical stores and to improve its online sales experience at the high competition level that has been reached in the e-commerce era.
This partnership between Klarna and H&M will enable the development of payment services. The power of H&M's physical stores will be used to improve their role in e-commerce. In this partnership with the aim of creating the perfect experience, the store, mobile and online payment experiences will be similar to each other. H&M will offer a much better shipping and refund process, will offer different payment options, and will offer advantages like “try before you buy” concepts that other online stores can’t offer and will improve the advantages of the wide store network. This partnership is expected to start from Sweden, which is H&M’s main market. Klarna is also a Sweden based startup. We will see the first phase of the partnership and developments in 2019.
Klarna, the payment systems startup established in Stockholm in 2005, provided payment services to the largest banks in Europe. Klarna, which has been used by more than 60 million customers so far, is valid in 90 thousand member establishments and 14 different countries. It is known that its valuation is over 2.5 billion dollars with the investment it received last year.
After the investment, company officials do not provide any information regarding the valuation of Klarna, while the investment of 20 million dollars is estimated to be less than 1% of the companies stake. Long story short, it is wrong to say that H&M's move is a more strategic investment and that H&M has started to invest in startups. With this move, H&M is forming a strategic partnership with Klarna.
Klarna's experience is expected to help H&M. With this move, Klarna also gathered a vote of confidence. Because there had been rumours about Klarna preparing for an IPO in the near future.
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