Klarna announced a major milestone in its U.S. growth strategy on Tuesday, revealing a deal to sell up to $6.5 billion in loans over the next two years to funds managed by Elliott Investment Management. The partnership marks one of the Swedish fintech’s largest forward-flow agreements to date as it doubles down on its fast-growing buy-now-pay-later (BNPL) footprint in the American market.
A scalable forward-flow structure
Under the arrangement, Klarna will sell a portion of its existing Fair Financing loan portfolio to Elliott funds and, starting in October, transfer newly originated receivables on a rolling basis.
The facility is initially sized at $1 billion, but because repaid loans are continuously replenished with new originations, Klarna can generate up to $6.5 billion in loans during the two-year term.
Klarna CFO Niclas Neglén said:
“This is another major step in our U.S. growth journey… This agreement lets us reach even more Americans who are moving on from traditional credit and choosing fairer ways to pay.”
Capital-efficient growth model
Morningstar senior equity analyst Niklas Kammer noted that forward-flow agreements are ideal for Klarna’s rapid expansion:
“They are capital efficient and highly scalable, allowing Klarna to execute fast and capture opportunities as it ramps its merchant base with new PSP integrations.”
Klarna will retain all consumer-facing functions, including underwriting and loan servicing, ensuring a seamless customer experience.
U.S. demand surges for “Fair Financing”
Klarna’s Fair Financing product allows BNPL users to spread out large purchases into fixed monthly installments at competitive interest rates—making it especially appealing for higher-value transactions.
The product’s momentum in the U.S. has been extraordinary:
- 244% growth in gross merchandise volume (GMV)
vs. - 139% global growth for Klarna overall
Strong financial performance post-listing
The deal arrives shortly after Klarna exceeded analyst expectations in its first quarterly earnings report since its blockbuster public listing earlier this year, reinforcing its position as one of Europe’s most influential fintech companies.
As U.S. consumers increasingly shift away from traditional credit models, Klarna’s partnership with Elliott funds positions it to capture outsized demand—and accelerate the next phase of its American expansion.