BNPL company Klarna has secured an agreement with Elliot Investment Management—specifically funds managed by the group—in which the investment firm will buy $6.5 billion of its Fair Financing loans, as per an official press release.
This is Klarna’s first quarterly report since its IPO in September.
The company also posted its Q3 results, showing a scale-up of growth in revenue, but still showing a net loss of $95 million and an adjusted operating loss of $12 million.
As part of the deal, Klarna will roll over new loans to Elliot Investment Management from October onwards as they get added to accounts receivable. The initial facility size will be $1 billion with the total $6.5 billion expected to be completed under a 2-year agreement.
The funds received from the facility deal will be used to power its U.S. expansion.
“Fair Financing puts people in control, giving them real choice and flexibility with clear terms and no surprises. This agreement lets us reach even more Americans who are moving on from traditional credit and choosing fairer ways to pay,” said Niclas Neglen.
The Fair Financing segment of the business is experiencing rapid growth, especially in the U.S. market, where it has grown by 244%.