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Klarna is offloading tens of billions of dollars’ worth of U.S. buy-now-pay-later receivables in a forward-flow deal with Nelnet, a move designed to free up capital as the Swedish fintech gears up for a long-awaited New York listing.
The agreement, announced this week, will see Nelnet buy up to $26 billion in Klarna’s short-term “Pay in 4” receivables over the life of the program. Klarna said the arrangement provides “balance sheet flexibility” as it continues expanding in the U.S., its largest market by volume.
The deal comes at a pivotal moment. Klarna has rebuilt momentum after a bruising 2022 that saw its valuation slashed from $45 billion to $6.7 billion in a down round. Revenue has since rebounded, climbing about 20% in the second quarter, though profitability remains a work in progress. The company filed paperwork in March for a U.S. IPO before putting plans on ice a month later; bankers say funding partnerships like this one will help reassure investors about sustainable growth.
For Nelnet, best known as a major student loan servicer, the transaction signals a broader pivot into consumer loan investment. The Nebraska-based group has experience managing large, predictable cash-flow portfolios — it bought Great Lakes Educational Loan Services in 2018 and has since added a banking arm. Taking on Klarna’s short-duration BNPL receivables fits neatly into that playbook.
Klarna has used similar structures elsewhere. In Britain, it signed a multi-year deal with funds managed by Elliott Advisors to purchase most of its short-term receivables. The $26 billion U.S. flow underscores just how central the American market has become to Klarna’s operations, especially after clinching a partnership with Walmart earlier this year to displace Affirm as its in-store BNPL provider.
The regulatory backdrop is shifting, too. In 2024, the Consumer Financial Protection Bureau ruled that BNPL lenders offering digital accounts must comply with parts of the Truth in Lending Act normally reserved for credit card issuers. That means clearer statements, dispute rights, and refund obligations. Selling receivables allows Klarna to reduce balance-sheet exposure while navigating those evolving rules.
BNPL funding has become increasingly modular where fintechs originate and manage customer relationships, while banks, hedge funds or specialist servicers provide the capital through forward-flow deals, warehouse lines or securitizations. Nelnet may choose to hold Klarna’s loans or repackage them into asset-backed securities.
Klarna’s next challenge is proving that scale doesn’t mean surging losses. Offloading U.S. receivables gives it breathing space to show that its model can generate consistent margins, while investors watch closely for an updated IPO timetable.
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