Klarna acquires social shopping startup Hero

Dive Brief:

To provide consumers with a social shopping experience, Klarna has acquired platform Hero for an undisclosed sum, the payments company announced on Friday.
As part of the deal, Klarna's 250,000 retail partners will gain access to Hero, allowing in-store staffers to create content and provide advice to customers. Among Hero's current clients are Levi, Rag & Bone and Chloé, according to a press release.
Klarna noted that it has also recently acquired two other companies: Shoptail, a comparison shopping company, and Toplooks, an artificial intelligence-based styling & shoppable content platform.

Dive Insight:

In the future, Klarna wants to become part of the social shopping experience for its 90 million international customers, David Sandström, chief marketing officer of Klarna, noted in a statement. The payments platform aims to be the place where shoppers can make purchases and bank in whichever way is convenient for them, Sandström added.

"We see a huge opportunity to leverage Hero's existing platform and expertise to allow in-store retail professionals to become global brand ambassadors," Sebastian Siemiatkowski, CEO of Klarna, said in a statement.

The acquisitions of Hero and other startups follow Klarna's recent fundraising spree. Last October, the buy now, pay later platform raised an undisclosed amount from Macy's and partnered with the retailer to offer customers interest-free installment payments. In March, the platform raised $1 billion to fund its global expansion. In June, the company raised another $639 million, bringing the total funds raised to about $3.7 billion since the company was founded in 2005.

Besides acquiring startups and raising capital, Klarna has grown its user base and implemented new features on the platform. Last summer, the company announced that it had nearly 8 million customers in the U.S. and integrated its service with Google Pay to let shoppers pay for goods in-store. In 2019, the company began allowing shoppers to pay for their purchases via the app in installments without interest or fees.

Meanwhile, Hero has enhanced its platform through key partnerships and adding new features. Klarna's acquisition announcement noted that the two companies already had mutual retail partners like Nike and JD Sports. Plus, the platform also partnered with Shopify last year to help sellers create virtual shopping experiences for shoppers, including features like video chats with staffers. And last month, the platform introduced a short-form video feature, which lets brands create shoppable videos and track their engagement.

While Klarna and Hero aim to capitalize on the shoppable content trend, other platforms, including Instagram and Snapchat, have rolled out similar tools. In fact, Instagram recently declared that it will focus more on commerce, video, creators and messaging to compete with other platforms like TikTok.