When Rivals Fund You - Issue #563 Tuesday, August 26th 2025 12:00AM
The Focus
There was a time when fintechs spoke about banks the way startups speak about “dinosaurs.” Too slow, too rigid, too tied to outdated systems. The pitch was simple: build something faster, smarter, more accessible, and leave the incumbents behind.
But then you look at Klarna. Fresh off a major funding arrangement with Santander — a bank that directly competes with it in Germany — and the story shifts. Suddenly, the new world of finance doesn’t look like a battle to the death. It looks like cooperation born out of necessity.
This is recognition of reality. Credit is expensive, regulation is heavy, and growth requires capital. For Klarna, taking on a €1.4 billion facility from a rival makes sense. For Santander, lending to a fintech competitor gives it exposure to the very model threatening to undercut traditional lending. Each gets something the other can’t build alone.
That’s the real story: fintech’s future isn’t pure disruption. It’s entanglement. Challenger banks run on cloud infrastructure built by incumbents. Payments companies rely on global card networks. BNPL leaders shore up their liquidity with bank facilities. The line between fintechs and banks is no longer about who wins. It’s about how both stay relevant by leaning on each other.
If anything, this should make us rethink the narrative. Fintech didn’t come to replace banks. It came to make them part of an ecosystem they can’t fully control anymore. Klarna’s latest deal shows that even the loudest disruptors know when it’s time to call the bank.
Read more: Klarna Secures €1.4 Billion Santander Facility as IPO Plans Take Shape
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