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Klarna buys BillPay, the PayPal of Germany, for $75M from Wonga



Some chopping and changing is afoot in the world of payments in Europe. Today, Klarna, the payments startup out of Sweden, confirmed that it has acquired BillPay, a payments company based in Germany, from its previous owner Wonga, the startup that once achieved notoriety for predatory payday loans.

The companies are not disclosing the value of of the deal, but a couple of reports from over the weekend placed the price at around £60 million ($75 million). We’re attempting to confirm that price.

The sale is a sign of consolidation on both sides: Klarna is looking to build out a stronger presence across Europe in payments, specifically in this case in Germany, and Wonga is retreating from its ambitions to pivot its business (or at least expand it) from loans to payments — which had been its original intention when it acquired BillPay in 2013. If you look on Wonga’s site today, it’s all about loans, and not much more.

“We are excited to be working with BillPay and their talented team in Berlin. By combining our skills and expertise, and leveraging BillPay’s deep market knowledge, product features and consumer offering, we are confident that we can offer even more innovative payment services to our customers,” said Sebastian Siemiatkowski, co-founder and CEO of Klarna, in a statement. “‘Germany is one of the largest e-commerce markets in the world, and we are delighted to have strengthened our position here with this acquisition.”

Although Wonga has not made many headlines lately for its loans — it modified practices after having to write down 330,000 bad loans in 2014, as well as divesting other assets and laying off employees as part of its restructure — it seems that its name and brand are still not one that people want to wave around. Klarna’s press release announcing the acquisition doesn’t make a single mention of the company selling BillPay to Klarna.

BillPay itself was founded back in 2009 as one of several e-commerce clones from Berlin-based incubating factory Rocket Internet —  BillPay was fashioned as the PayPal of Germany. Although many other Rocket clones eventually branched into other parts of Europe and the world, BillPay focused on dominating in one single, big country: Germany is known as the biggest e-commerce market in Europe. It is also operational in Switzerland, Austria and the Netherlands.

“We are thrilled to join the Klarna team. Together we will have a market leading position in Germany, Austria and Switzerland, and will be able to offer our merchants and users highly attractive payment options in more international markets in an ever increasing cross-border e-commerce environment,” said BillPay CEO, Nelson Holzner, in a statement.

It’s not clear how big BillPay’s business is today — or Klarna’s for that matter. Back when Wonga acquired it, the company was a little more forthcoming and noted that it had 2 million users and agreements with 3,500 sites/online storefronts, with annual transaction volume of €300 million ($409 million).

But fast forward to 2017, and PayPal is far from the only other company working in online payments today, and so it’s a crowded and competitive market. Specifically for Klarna, one interesting competitor is Stripe, which also positions itself as a very simple way for third parties to incorporate payments into their sites and apps.

Klarna — founded back in 2005 by Sebastian Siemiatkowski, Victor Jacobsson and Niklas Adalberth, has to date has raised around $291 million with backers including several VC biggies: Atomico, DST, General Atlantic, IVP, QED and Sequoia.

 



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