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Why BNPL Swedish giant Klarna has sights set on Canada

FP | Stephanie Hughes | May 17, 2022

Klarna - Why BNPL Swedish giant Klarna has sights set on CanadaSwedish fintech leader Klarna Bank is planning to establish a product development and tech hub in Toronto as it looks to grow its “buy now, pay later” model in the increasingly competitive North American market.  BNPL is already starting to take off in Canada and BNPL payments are projected to grow 63.5 per cent and reach $5.9 billion in 2022 (Source: Research and Markets).

Now, with more than 400,000 merchants on board and US$1.6 billion in net operating income, founder and chief executive officer Sebastian Siemiatkowski is looking to catch a ride on Toronto’s thriving tech scene and take advantage of the country’s shift into open banking.

See:  Welcome to the third largest tech-hub in North America

Why Canada?

  • Klarna initially set its sights on Canada in February, when it brought its “Pay in 4” (split payment) service to Canada in February and partnered with retailers such as Harry Rosen, Mejuri and Frank And Oak as well as hundreds of others.
  • Building a tech hub with up to 500 people would give the company a startup feel as well as a foothold in the North American market.
  • Being part of an ecosystem that helped startups such as Shopify Inc. thrive is another reason Klarna picked Toronto.
  • Canada’s shift to open banking is one reason Siemiatkowski is optimistic about the opportunity here. The regulatory framework, due to launch next year, would give consumers the ability to share their banking data with other financial institutions or move their information between institutions.

“We compared it with all of U.S. and Canada and so forth and concluded that Toronto had a fantastic amount of talent, fantastic positioning, (and) a very business-friendly government,” he said.

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