[6][7] The three founders Sebastian Siemiatkowski, Niklas Adalberth and Victor Jacobsson founded Klarna in 2005 after participating in the Stockholm School of Economics annual entrepreneurship competition.

[19] Klarna launched in the United States in September 2015,[20] and the US has become its principal focus for future growth, after securing exclusive partnerships with luxury department store Macy's.

[21][22][4][23] That year, Minister of Enterprise and Innovation Mikael Damberg dubbed Klarna one of Sweden's "five unicorns", by which he meant startup companies that had succeeded in growing and attracting international investments.

[27] This funding round valued the company at $5.5 billion, making Klarna the largest fintech start-up in Europe.

[29] In 2020, Ant Financial, the payment affiliate of Chinese e-commerce company Alibaba, invested in Klarna as part of a partnership between the two firms.

[30] In June 2021, Klarna raised $639 million in a fundraising round led by SoftBank Group's Vision Fund 2, increasing the company's valuation to $45.6 billion.

[32] In November 2021, Klarna launched its physical card, which enabled users to make purchases in interest-free installments.

Since September 2022, Klarna offers savings accounts and deposits to Spanish customers through Raisin Bank [es; de].

[45] In October 2022, the company launched a new "Klarna Creator" application for retailers and influencers to collaborate on brand campaigns and to track their earnings.

The company's Chief Marketing Officer, David Sandstrom, said there were also plans for a high-yield savings account in the US, with potential for subscribers to earn a higher rate than non-users.

[52] In the UK, Klarna operates in the rapidly growing post-payment sector which has been criticised for encouraging consumers to get themselves into unserviceable levels of debt.

It was speculated if this was an unethical business model since the company made money on these reminder fees and Klarna also had a subsidiary dedicated to debt collection.

The Swedish Consumer Agency also found a reason to investigate how Klarna added credit fees for partial payments.

[55] The year before the co-founder Niklas Adalberth said in a presentation during the startup conference Arctic15 that: "That is one of our revenue streams [...] the best customer is the one that doesn't pay directly but actually [gets] a reminder and then also debt collection because we are able to add the legal fees.

[63][64][65] This resulted in CEO Sebastian Siemiatkowski being summoned to the Swedish Ministry of Finance to answer questions its management of identity theft and the debts of customers in May 2019.