Buy-now-pay-later giant Klarna has achieved a $45.6bn valuation on the back of $639m SoftBank-led investment round, potentially making it Europe’s most valuable privately-owned tech company.

Klarna had already claimed the title of Europe’s most valuable privately-owned fintech company after it achieved a $31bn valuation in March on the back of a $1bn funding round

The newly minted quadradecacorn’s existing investors Adit Ventures, Honeycomb Asset Management and WestCap Group also participated in the raise.

In the past, Klarna has also received backing from Sequoia Capital, SilverLake, Dragoneer, Permira, Commonwealth Bank of Australia, Bestseller Group, Ant Group, Northzone and GIC as well as funds and accounts managed by BlackRock and HMI.

Klarna will use the new cash injection to continue to expand internationally and to develop new products.

The news about the raise confirms rumours from May that suggested that Klarna was on the cusp of raising a massive new investment round at a valuation that would push it past the $40bn mark.

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“Consumers continue to reject interest-and fee-laden revolving credit and are moving toward debit while simultaneously seeking retail experiences that better meet their needs,” said Sebastian Siemiatkowski, Klarna co-founder and CEO.

“Klarna’s more transparent and convenient alternatives align with evolving global consumer preferences and drive worldwide growth. I’m very proud of the investors who are supporting Klarna’s ambition to challenge these outdated models to empower consumers with fair, transparent, and convenient products to help them bank, shop and pay each day.”

Yanni Pipilis, managing partner for SoftBank Investment Advisers, added: “Klarna’s growth is founded on a deep understanding of how the purchasing behaviours of consumers are changing, an evolution which we believe is accelerating. Klarna has already successfully expanded into the US and we are excited to continue supporting the team in bringing the next generation of financial services to new markets worldwide.”

It comes as GlobalData Thematic Research estimates that the worldwide BNPL sector is expected to be worth $166bn by 2023.

The BNPL sector has been criticised lately for putting customers’ financial well-being at risk. In response, regulators in the US and the UK have either launched or are expected to introduce new rules for the BNPL market.

Klarna has welcomed these initiatives and a spokesperson has told Verdict that “Klarna’s default rate in the UK is well below 1% which is much better than credit cards and demonstrates that people use our products sustainably.”