Klarna Swipes Key Walmart Partnership Ahead of US IPO

It seems Affirm’s partnership with Walmart wasn’t on quite such firm ground, after all.

On Monday, the buy-now-pay-later (BNPL) firm saw its exclusive partnership with the retail giant fall by the wayside, after Walmart opted to team up with Affirm’s chief competitor, Klarna. The Swiss BNPL firm will now be facilitating installment loans for customers using the retailer’s consumer finance platform, OnePay. The coup comes just after Klarna filed for its US initial public offering.

The Bank of Walmart

Walmart’s on a clear mission: Make it as easy as possible for customers to spend, spend, spend. To that end, it has fully integrated itself with fintech startup OnePay (which was simply known as just “One” as recently as a month ago); Walmart is the majority owner of One and has invested hundreds of millions of dollars in it. Within the OnePay ecosystem, customers can earn cash back and other rewards on Walmart purchases, pay at checkout directly from their bank accounts, and take advantage of BNPL and loan installment payment plans.

Klarna’s takeover of that last one ends a roughly six-year partnership between Affirm and Walmart, which had been pretty lucrative for Affirm:

• Integrated payments services with Walmart accounted for a full 5% of Affirm’s gross merchandise volume in the second-half of 2024, an Affirm spokesperson told The Wall Street Journal on Monday.
• The service also accounted for about 2% of its roughly $229 million in adjusted operating income in the second half of 2024. OnePay says it is generating annual run-rate revenue of $200 million.

Share of Success: OnePay, fittingly, is getting some additional perks in the partnership. According to sources who spoke to CNBC, OnePay scored a deal sweetener that allows it to buy up to 15 million shares of Klarna at $34 a pop ahead of its expected IPO. According to a recent Bloomberg report, Klarna is targeting a $15 billion valuation when it debuts on the public market — way down from the nearly $46 billion valuation it carried back in 2021, but a healthy tick up from the just $6.7 billion valuation it had plummeted to by 2022. In its IPO filing on Friday, the company said it scored $21 million in net income off of $2.8 billion in revenue in 2024, up from a loss of $244 million on revenue of roughly $2.3 billion the year before.