Klarna Group Plc has agreed to sell up to $US26 billion ($40 billion) of its buy-now, pay-later (BNPL) loans to Nelnet, a major student loan company. This multi-year agreement aims to free up capital for the fintech firm as it considers a future public offering. The deal is structured as a forward-flow agreement, where Nelnet commits to purchasing loans before they are originated by Klarna. Klarna is a Swedish fintech company that provides buy now pay later services and other financial products. It operates as a licensed bank in Sweden, offering consumers flexible payment options.
The agreement will enable Klarna to expand its ‘pay-in-4’ product in the United States. This service allows consumers to split their purchases into four interest-free payments over a few weeks. The sale of these loans to Nelnet is expected to provide Klarna with the financial flexibility needed to pursue its growth strategy in the US market and to make moves toward going public.
Klarna’s chief financial officer, Niclas Neglén, described the partnership with Nelnet as a “landmark transaction” for the company in the US. He stated that it would allow Klarna to scale a core product responsibly. Klarna has been developing a platform to facilitate the ongoing sale of loan streams to investors globally.
Last year, Klarna also entered into an agreement with a subsidiary of Elliott Investment Management. Under that deal, the hedge fund agreed to purchase £30 billion of Klarna’s UK-originated debt over several years, with Klarna continuing to service the loans.
