BNPL Specialist Klarna Looks to Bolster Its Role in E-Commerce With Its Hero Deal

With volumes rising fast in both e-commerce generally and in the buy now, pay later business, BNPL payments provider Klarna AB has made a play to secure its position in both markets. The company announced Friday it has acquired Hero Towers Ltd., a 6-year-old social-shopping service that lets consumers interact with store employees while shopping online. 

The parties did not disclose a price, but The Wall Street Journal pegged it at $160 million, quoting persons familiar with the deal.

Klarna sees the deal as shoring up the payments company’s ability to lure and please consumers at a time when more and more of them are shopping online for the first time. Sweden-based Klarna saw its U.S. user base reach 17 million by April, more than double the figure a year earlier and close to 20% of the company’s worldwide base. Its service is active at 24 of the country’s 100 largest retailers, more than any other BNPL player, Klarna claims.

With London-based Hero, Klarna will extend its reach to shoppers seeking advice and information from the merchants they deal with before making a purchase. Hero is a specialist in so-called social shopping, which links online consumers with store associates and other experts to ask questions and get advice on products and services before hitting the buy button. Hero’s service can be delivered via texts and videos and through online chat rooms.

As consumers of all ages are piling into e-commerce for the first time, Klarna figures that kind of service can give it an edge. “We see a huge opportunity to leverage Hero’s existing platform and expertise to allow in-store retail professionals to become global brand ambassadors,” says Sebastian Siemiatkowski, Klarna’s chief executive, in a statement. “This will unlock  growth for retailers by creating a new hybrid shopping experience.”

The deal could also boost Klarna as it competes with an increasing roster of players that have entered the market for installment credit online and at the point of sale, including such firms as Affirm Inc., which recently clinched a deal to offer its service through the major commerce platform Shopify Inc.

Indeed, the goal of social shopping, Hero says, is to render an online experience that mimics the interaction of consumers in stores chatting with informed employees about products and services. The idea is to make “online shopping more social, interactive, and ultimately more human,” Hero’s founder, Adam Levine, said in a statement Friday. The company’s service works directly from the merchant’s e-commerce site, Hero says. Its client list includes major brands including Levi, rag &bone, and Harvey Nichols.

The acquisition of Hero follows other recent moves Klarna has made to reinforce its position in e-commerce, including deals for Shoptail, a comparison-shopping service, and Toplooks, which suggests purchases that complement those consumers have already made.