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UPDATE 1-Klarna seeking new funds at close to $50 bln valuation - sources

STOCKHOLM, May 27 (Reuters) - Swedish payments firm Klarna is close to raising a new round of funding from a group of investors including SoftBank that could lift the company’s valuation close to $50 billion, three sources told Reuters.

The latest fundraising is expected to be Klarna’s final private round before the fintech giant, Europe’s most valuable startup, sets the stage for a blockbuster stock market listing, two of the sources said.

With such a valuation, Klarna would become Sweden’s biggest financial company and be worth more than some major European banks including Deutsche Bank.

Klarna, which allows shoppers to buy online through its merchant partners and settle their dues in instalments via “buy now, pay later” (BNPL), in March raised $1 billion, tripling its valuation to $31 billion in less than six months.

Chief Executive Sebastian Siemiatkowski told Reuters earlier that a stock market flotation was more likely to happen early next year, adding that the company would seriously consider options including a direct listing, where no new shares are sold.

A direct listing would make sense for Klarna as it is unlikely to need more capital in the near term given its fund raising this year, one of the sources said.

Capital markets bankers and lawyers expect the company to float in New York either through an initial public offering (IPO) or a merger with a special purpose acquisition company (SPAC) - a listed vehicle created to bring private companies to market.

Klarna’s investor slate includes rapper Snoop Dogg, BlackRock, NorthZone and Singapore’s sovereign wealth fund GIC.

Business Insider reported on the latest funding round earlier on Thursday. The size of the cash injection is not yet finalised but is expected to be around $500 million, according to the report here.

Softbank declined to comment. (Reporting by Supantha Mukherjee, European Technology & Telecoms Correspondent, based in Stockholm; Editing by Johan Ahlander, Kirsten Donovan)

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