Fintech startup Klarna has raised a mega-round of funding led by Silver Lake. The company is raising $650 million at a post-money valuation of $10.65 billion. Klarna says it is now the highest-valued private fintech company in Europe following today’s funding round.

In addition to Silver Lake, GIC (Singapore’s sovereign wealth fund) and funds and accounts managed by BlackRock and HMI Capital are also participating in today’s funding round. Merian Chrysalis, TCV, Northzone and Bonnier have bought out existing shareholders.

Klarna’s main product is an alternative payment method on e-commerce platforms. It lets you buy now and pay later over three or four installments with 0% interest. It has been quite popular in different European markets as many customers don’t have credit cards and/or don’t want to pay the fees involved with revolving credit lines.

Merchants get paid when the initial transaction occurs with Klarna transparently managing credit lines for customers. In addition to transaction fees, the company also generates revenue from late fees.

More recently, the company expanded to the U.S. where it now has 9 million customers out of 90 million customers in total. It mainly competes with Affirm in the U.S. Klarna has also been expanding its offering by targeting consumers directly — not just e-commerce companies.

You can now download the Klarna app to see all your Klarna payments, access a marketplace of stores, track deliveries and set up price-drop notifications. Using the app, you can also create virtual cards to pay with Klarna on unsupported stores, such as Amazon. It’s not as straightforward as clicking Klarna when you check out, but it works. The app has 12 million monthly active users and 55,000 daily downloads.

The company launched a rewards program this summer called Vibe. It is only available in the U.S. for now. It lets you earn points for every dollar you pay back on time when you use Klarna as your payment method. You can exchange points for gift cards at H&M, Amazon, Walmart, Uber, etc.

Klarna is now working with 200,000 retail partners, such as Sephora, Groupon and Ralph Lauren. During the first half of 2020, the company reported $466 million in revenue and $59.8 million in losses.

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