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Klarna Doubles Down on U.S. Expansion With Elliott Backing
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Key Takeaways
Klarna doubled its Elliott funding facility to $2B, extending it to support U.S. BNPL growth.
The deal lets Klarna sell loans for liquidity, helping fund up to $17B in U.S. originations.
Klarna's user base hit 118M, with 3.4M daily transactions and rapid merchant network expansion.
Klarna Group plc (KLAR - Free Report) recently made a strongmove to support its U.S. growth. Instead of raising equity or taking on traditional debt, the company expanded its partnership with Elliott Investment Management by doubling a funding facility to $2 billion and extending it to three years. Its shares rose 3.9% yesterday, following the announcement.
Through the partnership, Klarna originates buy now, pay later (BNPL) loans, then sells those loans to Elliott-managed funds. That gives Klarna liquidity, which it can reuse to issue more loans. Demand in the U.S. is strong, and access to funding can easily become a constraint for lenders. By locking in a larger and longer facility, Klarna mitigates that risk.
So instead of holding loans, Klarna can move them off its books and recycle that capital to issue new ones. The facility expanded, based on the November 2025 partnership,indicating it has a steady buyer for its loans, which will enable KLAR to avoid building up its balance sheet. The facility is expected to support up to $17 billion in U.S. loan originations.
Globally, its Klarna Card reached five million active users, signaling rapid adoption of its hybrid debit–BNPL product. Klarna is scaling fast across both users and merchants. Its active user base has crossed 118 million, with around 3.4 million transactions processed every day. Its app saw strong engagement too, reaching over 55 million monthly users in February 2026, while daily usage climbed 53% year over year to nine million. On the merchant side, its network expanded 42% in Q4 2025 to 966,000 partners.
BNPL Peers Keep Growing
The BNPL race is heating up with competitors like Affirm Holdings, Inc. (AFRM - Free Report) and PayPal Holdings, Inc. (PYPL - Free Report) pushing harder for more market share.Affirm is gaining momentum, driven by higher transaction volumes, stronger repeat usage and a growing servicing income stream. In its latest quarter, gross merchandise volume jumped 36% year over year to $13.8 billion, while card network revenue increased 26% to $73 million. Meanwhile, PayPal continues to benefit from its global scale, operating across more than 200 markets. Its U.S. business remains a key growth driver, helping push BNPL total payment volume past $40 billion in 2025, marking growth of over 20% year over year.
Klarna’s Price Performance, Valuation and Estimates
After yesterday’s gains, shares of Klarna are down 53.1% in the year-to-date period, underperforming the broader industry’s 13.1% decline.
Image Source: Zacks Investment Research
From a valuation standpoint, Klarna trades at a forward price-to-sales ratio of 1.10X, lower than the industry average of 4.79X. KLAR carries a Value Score of D.
The Zacks Consensus Estimate for Klarna’s 2026 and 2027 EPS is currently pegged at a loss of 12 cents and a profit of 80 cents, respectively.
Image Source: Zacks Investment Research
The stock currently carries a Zacks Rank #4 (Sell).
View the Zacks #1 Rank List
Image: Bigstock
Klarna Doubles Down on U.S. Expansion With Elliott Backing
Key Takeaways
Klarna Group plc (KLAR - Free Report) recently made a strongmove to support its U.S. growth. Instead of raising equity or taking on traditional debt, the company expanded its partnership with Elliott Investment Management by doubling a funding facility to $2 billion and extending it to three years. Its shares rose 3.9% yesterday, following the announcement.
Through the partnership, Klarna originates buy now, pay later (BNPL) loans, then sells those loans to Elliott-managed funds. That gives Klarna liquidity, which it can reuse to issue more loans. Demand in the U.S. is strong, and access to funding can easily become a constraint for lenders. By locking in a larger and longer facility, Klarna mitigates that risk.
So instead of holding loans, Klarna can move them off its books and recycle that capital to issue new ones. The facility expanded, based on the November 2025 partnership,indicating it has a steady buyer for its loans, which will enable KLAR to avoid building up its balance sheet. The facility is expected to support up to $17 billion in U.S. loan originations.
Globally, its Klarna Card reached five million active users, signaling rapid adoption of its hybrid debit–BNPL product. Klarna is scaling fast across both users and merchants. Its active user base has crossed 118 million, with around 3.4 million transactions processed every day. Its app saw strong engagement too, reaching over 55 million monthly users in February 2026, while daily usage climbed 53% year over year to nine million. On the merchant side, its network expanded 42% in Q4 2025 to 966,000 partners.
BNPL Peers Keep Growing
The BNPL race is heating up with competitors like Affirm Holdings, Inc. (AFRM - Free Report) and PayPal Holdings, Inc. (PYPL - Free Report) pushing harder for more market share.Affirm is gaining momentum, driven by higher transaction volumes, stronger repeat usage and a growing servicing income stream. In its latest quarter, gross merchandise volume jumped 36% year over year to $13.8 billion, while card network revenue increased 26% to $73 million. Meanwhile, PayPal continues to benefit from its global scale, operating across more than 200 markets. Its U.S. business remains a key growth driver, helping push BNPL total payment volume past $40 billion in 2025, marking growth of over 20% year over year.
Klarna’s Price Performance, Valuation and Estimates
After yesterday’s gains, shares of Klarna are down 53.1% in the year-to-date period, underperforming the broader industry’s 13.1% decline.
From a valuation standpoint, Klarna trades at a forward price-to-sales ratio of 1.10X, lower than the industry average of 4.79X. KLAR carries a Value Score of D.
The Zacks Consensus Estimate for Klarna’s 2026 and 2027 EPS is currently pegged at a loss of 12 cents and a profit of 80 cents, respectively.
The stock currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.