In recent years, big names in the payment industry such as PayPal and Visa have moved into the BNPL payment option. As the sector continues to jump from a niche payments subtype to an increasingly mainstream payment option, rivalry among these players is expected to intensify many folds.
This rising interest among consumers turned into a significant growth opportunity for BNPL providers in 2020 that no one could have forecast. Notably, the growing interest among consumers and the subsequent rise in the number of BNPL players operating in the deferred payment space have led to more mergers and acquisitions over the last few quarters. Global leading and pureplay BNPL firms are increasingly looking to enhance their consumers and merchant partners, leading to various M&A activities.
Klarna acquired social shopping startup Hero
In July 2021, Klarna acquired Hero, a UK-based social shopping platform, for an undisclosed amount. This acquisition will allow Klarna to provide its 90 million international customers with a social shopping experience. Notably, the acquisition will also help Klarna's more than 250,000 merchant partners to gain access to Hero, therefore, allowing in-store staffers to create content and provide recommendations to customers. Some of the leading brands that are currently using Hero include Levis, Chloe, and Rag & Bone, among others.
Along with Hero, Klarna acquired two other companies as well, Toplooks, an artificial intelligence-based styling and shoppable content platform, and Shoptail, a comparison-shopping company. Notably, Klarna is expected to acquire more startups over the next few quarters, as it looks to diversify its service offering while creating more value propositions for its consumers and merchant partners. The acquisition of Hero and other startups follow the BNPL providers’ recent fundraising spree.
With Klarna and Hero looking to capitalize on the shoppable content trend, PayNXT360 expects more such mergers and acquisitions from leading global BNPL firms over the next four to eight quarters to fend off growing competition in the BNPL space.
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