Klarna CEO Sebastian Siemiatkowski attends the launch of the online payment start-up’s pop-up store in London.Dave Benett | Getty Images for KlarnaLONDON — Swedish fintech firm Klarna said Thursday that it raised $639 million in a new funding round led by SoftBank, valuing the company at $45.6 billion.Klarna is one of the largest providers of “buy-now-pay-later” services, which let people finance their shopping purchases interest-free over a period of monthly instalments. These services have become particularly popular since the coronavirus pandemic began.The latest investment in Klarna, which was led by SoftBank’s Vision Fund 2, cements its status as Europe’s top fintech unicorn, and the second-biggest fintech start-up by valuation after Stripe. Adit Ventures, Honeycomb Asset Management and WestCap Group also invested, Klarna said.”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,” Sebastian Siemiatkowski, Klarna’s founder and CEO, said in a statement Thursday.”More transparent and convenient alternatives align with evolving global consumer preferences and drive worldwide growth,” he added.Klarna, a regulated bank, touts itself as an alternative to credit cards, an industry the company views as detrimental to consumers. But it has faced growing scrutiny in the U.K., where the government is calling for new rules to bring regulatory oversight to the buy-now-pay-later sector.Klarna makes money by taking a fee from merchants each time a customer makes a transaction. It says merchants that use its service often see an increase in sales as a result. The company’s competitors include Australia’s Afterpay and Affirm, the American fintech firm from PayPal co-founder Max Levchin.Klarna posted record annual revenue of $1.2 billion in 2020. However, losses also climbed 50% to about $109.2 million due to increased costs associated with its international expansion.The investment marks the latest in a series of big investments into Europe’s tech sector.Swedish battery maker Northvolt said this week it had raised $2.75 billion in a round valuing the company at $11.75 billion. Last year marked a record for European tech, with start-ups in the continent raising $52 billion, according to Pitchbook. As of June 7, European start-ups had already raised $45 billion since the start of 2021.”The international money is coming into Europe,” Hans Otterling, general partner at Northzone and an early investor in Klarna, told CNBC. “For Silicon Valley, the talent pool has been depleting for some time. We have a huge talent pool in Europe.”Klarna’s other backers include the likes of Chinese fintech giant Ant Group and U.S. rappers Snoop Dogg and ASAP Rocky.Siemiatkowski told CNBC earlier this year that Klarna may seek a stock market listing as soon as this year. The company recently hired former HSBC executive Niclas Neglen as its chief financial officer. Siemiatkowski suggested the firm could list through a direct listing, like Spotify.Klarna was hit with a data breach last month, with users reporting they were being accidentally logged into other people’s accounts. The firm temporarily shut down its app. In a blog post, Klarna said the issue, which affected more than 9,500 users, was a bug caused by “human error,” and that it had “informed appropriate authorities.”The company ranked No. 5 on last year’s CNBC Disruptor 50 list.SIGN UP for our weekly, original newsletter that goes beyond the list, offering a closer look at CNBC Disruptor 50 companies, and the founders who continue to innovate across every sector of the economy.