Veteran Silicon Valley venture capitalist Michael Moritz will be the next chairman of Klarna as the Swedish fintech continues its push into the US by considering becoming a bank there ahead of a likely stock market listing.

Sir Michael, a partner at one of Klarna’s earliest investors Sequoia Capital, has been a director at the Swedish “buy now, pay later” company for more than a decade, and before that sat on the boards of Google and Yahoo. He has very rarely become chairman of a company.

His appointment comes as Europe’s most valuable private fintech fills out its board as it seeks to become one of the few technology groups from the continent to conquer the US market.

Omid Kordestani, the former executive chairman of Twitter, Sarah Smith, the former chief compliance officer of Goldman Sachs, and Lise Kaae, a former director of Swedish lender Handelsbanken, are also joining Klarna’s board.

Klarna, which was valued at $10.65bn in September, is already an EU-regulated bank. Asked if it was eyeing an application for a US banking charter, chief executive Sebastian Siemiatkowski told the Financial Times that although no decision had been taken, “it’s definitely something we would consider”.

Klarna, which was started by a trio of business school friends in Stockholm in 2005, has grown rapidly from its Nordic stronghold into Germany, the UK and the US. It offers payment solutions to ecommerce sites and has become a popular option for young shoppers at stores such as Asos, H&M and Nike.

It has made a big push into the US in recent years, signing up Macy’s, Etsy and Peloton as merchants while its app was downloaded more than 1m times in the country in November alone. Mr Siemiatkowski said growth in the US this year had been about 400-500 per cent, 10 times the rate for the group as a whole, helping it became Klarna’s third-biggest country. The growth in the US caused it to post its first-ever annual loss last year as its credit losses rose sharply.

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The Swedish fintech is preparing for a possible stock market listing in the US in the next year or two. “Will it make it easier for us to IPO with a more international board? Sure. But it’s not the major thing,” Mr Siemiatkowski said of the board appointments.

Instead, he said they reflected the rapid changes at the company as it became a global financial brand. “What is interesting with Klarna, [is that] it has never happened before that a retail bank has genuinely scaled at this pace to become a global banking player, at least through organic growth. We want to make sure we have a board that matches that,” he added.

Mr Siemiatkowski described Sir Michael becoming chairman as “a big honour”. He added: “I can’t recollect that he does it very often . . . During those times when we were struggling to find our way and direction, Sequoia were very supportive.” Sequoia said: “Michael has not been a chairman of a company in recent times.” He has previously been chairman of start-ups such as RedEnvelope and Luxim.

Klarna became the first large European fintech to win a banking licence in 2017, 20 months after it first applied to the Swedish Financial Supervisory Authority. It argues that retail banking is ripe for disruption and that fintechs can offer products and services on the same technology platform around the world.

Quoting the business advice that “a company’s value is equal to all the problems you solve for your customer combined”, Mr Siemiatkowski added: “A lot of fintechs do the wrong thing when they shy away from regulation. Even though it might sound like a big thing to deal with regulation, you should embrace it.”

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Additional reporting by Miles Kruppa in San Francisco

Via Financial Times

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