Dive Brief:

• Klarna, the fintech payments startup, has raised $1 billion in an equity funding round from new and current investors. The company is now valued at $31 billion, according to a Monday press release.

• Klarna will use the capital to grow its global retail presence, seeking to expand by drawing consumers to its installment payment approach. The funding makes the company the highest-valued private fintech in Europe and the second highest worldwide, Klarna said. 

• The company's volume and revenue grew last year by 46% and 40% year over year to more than $53 billion and $1 billion respectively, according to Klarna.

Dive Insight:

Klarna's $31 billion valuation is a culmination of the company's efforts to line up retail partners over the past few years. The startup has added retailers and platforms like Rue21, Asos, Toms, GameStop and Etsy to its roster. It now boasts more than 250,000 retailers in its network, including Sephora, Ralph Lauren, Urban Outfitters and Macy's, which is also an investor in the company. 

"Consumers want transparent products to help them bank, shop and pay that reflect the way they live their lives, not just outdated traditional models," Sebastian Siemiatkowski, co-founder and CEO of Klarna, said in a statement. 

Klarna's business has grown with its buy now-pay later approach that lets shoppers purchase merchandise in four installments. The company's app gives consumers the ability to manage their purchases and installment payments for shopping, and draws them in with retail discounts.

Meanwhile, other companies are also vying for a share of the installment payments market. Afterpay began offering its services through Squarespace and Stripe last month. And while Shopify teamed up with Affirm to offer installment payments last summer, PayPal debuted its own "Pay in 4" installment payment service in September.

As the startup has lined up more retail partners, it has also attracted more users and introduced features along the way. Last year, the company reached 7.85 million U.S. customers and 4.4 million app downloads, and the company said last month that it had reached 3.5 million monthly active users. It also introduced its own loyalty program and integrated its services within Google Pay.