Klarna Bank AB, one of Europe’s most valuable financial startups, said it struck a deal to buy e-commerce technology firm Hero Towers Ltd., a move that will expand its foothold in online shopping.
London-based Hero connects online shoppers with retail workers via text messages, videos and online chat rooms. It helps retailers who sell major brands such as Nike and Adidas to compete with Amazon.com Inc. by offering better customer service, according to Hero’s founder, Adam Levene.
Klarna will pay about $160 million, according to people familiar with the deal.
Klarna specializes in buy-now-pay-later services, an increasingly popular type of cash advance that lets merchants offer a way for customers to pay for goods and services in installments without paying interest. Klarna makes money by charging the merchants a fee. It competes with traditional credit-card companies.
Valuations of payments companies such as Klarna have soared in the past 12 months as pandemic-induced lockdowns drove a shift to online spending. Klarna processed $53 billion-worth of transactions in 2020, up 46% on the previous year.