(Bloomberg) -- Swedish payments firm Klarna Bank AB is weighing plans to raise new money in a funding round that would cement its status as Europe’s most valuable startup, people familiar with the matter said.

The Stockholm-based company is likely to attract sovereign wealth and pension funds as new investors, the people said, asking not to be identified discussing confidential information. Klarna could potentially fetch a valuation of roughly $50 billion to $60 billion based on preliminary estimates, though it hasn’t finalized a precise target, the people said. 

It’s considering allowing existing backers to sell some of their holdings as part of any fundraising, the people said. Klarna is separately exploring raising debt financing from banks to help fund its expansion plans, the people said.

The startup raised $639 million in June from investors including SoftBank Group Corp., Sequoia Capital and Permira. That round valued the company at $45.6 billion.

Deliberations are in the early stages, and details of the potential fundraising could change, the people said. A representative for Klarna declined to comment.

As a rival to the likes of PayPal Holdings Inc., as well as traditional credit card companies, Klarna lets its customers “buy now and pay later” in interest-free installments when they shop online or in store with brands including Calvin Klein, H&M, Ray-Ban and Lululemon.

Klarna also offers conventional bank accounts in Sweden and Germany and uses a mix of customer deposits and short-term debt to fund its loans. 

The rapid growth of Klarna since its founding in 2005 has led it to be viewed as a strong candidate for an initial public offering. Klarna said last year that it was considering a listing in London as soon as 2022 but had made no firm decisions on a venue. 

Other investors in Klarna include Adit Ventures, Honeycomb Asset Management, WestCap Group, Silver Lake and Dragoneer.

Read more: Market Downturn Rattles Venture Investors Despite Funding Surge

©2022 Bloomberg L.P.