ID Finance's 545m euro financing is probably mostly debt, Daniel Wild says, so it reveals no valuation and is unlikely to make the company a unicorn.
Wild says ID Finance and Klarna are converging in buy now, pay later, with ID Finance starting in lending and Klarna in payments.
ID Finance reported 2025 group revenue of 243m euros and says its profit doubled, but it disclosed no absolute profit figure.
ID Finance's Mostly Debt Raise Pushes It Toward Klarna's Turf
ID Finance, a Spanish consumer lender behind the Plazo platform and Moneyman brand, has a financing of about 545m euros, and the question is whether it can rival Klarna. The money is probably mostly debt, so it reveals little about valuation. Lending and payments are converging in buy now, pay later, and merchant distribution at the point of sale decides who wins.
Takeaways
The 545m euros is mostly debt. Daniel Wild argues a lender cannot fund loans with equity, because equity demands higher returns. He estimates debt at more than two thirds to three quarters of the round. The figure therefore says nothing about valuation, which ID Finance has not disclosed.
ID Finance and Klarna are converging in BNPL. ID Finance came from lending and Klarna from payments, and both now sell buy now, pay later. ID Finance launched Tourón in July, offering interest-free card instalments at merchants. The two already compete in Thailand.
Reported results look strong but stay incomplete. The group reported 2025 revenue of 243m euros and doubled profit, with no absolute profit figure. It cites monthly net profitability by end of 2025, 400,000 users and expected 300 percent growth. Thomas notes a few months are not a profitable year.
Lending health only shows years later. Defaults emerge as loan cohorts age, and loss provisioning is hard to judge from outside. Co-founder Boris Patina discussed machine learning and automated credit decisions in 2017. Wild says one or two years will show whether defaults are lower.
Merchant distribution matters more than AI. Wild argues AI alone would not let Klarna replicate ID Finance's business. Distribution deals at the point of sale are decisive. Thomas floats Klarna buying ID Finance, but Wild expects it may grow too large to buy on good terms.
Klarna is down but can stay a leader. Wild says Klarna trades roughly 60 percent below its IPO price, while Thomas reads 69 percent. Market capitalisation is about 5bn. Wild still sees it as a leading European player, though Thomas says it needs a new growth story.
Impressive growth, but not yet a champion. Wild says the financing figure alone does not make ID Finance a European fintech champion. He calls the growth impressive and the half-billion euro raise significant even if mostly debt. He sees Europe as strong in fintech, where Americans are not ahead.
Peers and earlier funding
Kingsway Capital invested again. In March 2023 it did a 30m euro transaction with convertible loans and a valuation cap of up to 235m euros.
Wild calls Revolut the 800-pound gorilla of European fintech and says Plazo resembles early Revolut, except that Plazo includes credit.
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On this episode 2
Show 1
Thomas says Nubank is worth about 70bn, with 15.8bn dollars of revenue and a 2013 founding. Wild calls it a huge success in Brazil rather than an American player.
Wild notes that many founders of larger European fintechs, including Revolut's, trace back to Alphabank alumni.