A debit card that lets you take out a line of credit … isn’t that just a credit card? Not in 2025, apparently.

Swedish fintech Klarna is piloting its own Visa debit card in the United States, the company announced Tuesday. Unremarkably, it will allow consumers to pay for purchases with their own funds, just like any other debit card. But they’ll also have the option of choosing a short-term buy now, pay later (BNPL) loan to be paid back in small installments.

Debit Where Due

Stockholm-based Klarna grew its revenue to $2.8 billion last year from $2.3 billion in 2023 as BNPL adoption widened, powered by younger consumers and others more averse to traditional credit with interest charges. This year, Klarna has continued to boost its profile in the consumer economy. In March, it bested rival Affirm to take exclusive control of BNPL at Walmart, America’s largest retailer.

The same month, CEO Sebastian Siemiatkowski defended a deal to bring Klarna’s lightning-fast access to credit to food delivery service DoorDash after critics joked about the idea of $15 burritos on loan as “the 2008 housing crisis, but for food” and “collateralized DoorDash obligations.” Those jokes were rooted in real concerns, as BNPL loans have come back to bite some consumers. In an April survey by LendingTree, 41% of BNPL users reported making late payments on a loan in the past year, up from 34% in 2023. A quarter of BNPL users reported taking out loans to pay for groceries, up from 14% a year earlier.

Meanwhile, Klarna reported its consumer credit losses rising to $136 million in the first quarter, up 17% year-over-year. The company, which saw its number of active customers cross 100 million in April, has pointed to the much less dramatic growth in the percentage of unpaid loans, which rose to 0.54% in the first quarter from 0.51% a year earlier. And now, of course, those loans will be accessible for cardholders far and wide via Visa:

• Klarna said it plans a wider rollout of the debit card, which already has a 5 million-person waiting list, in the US and Europe later this year. The card will offer one free tier and two paid tiers that include discounts and better cashback rates.
• Because Klarna is not a licensed bank in the US, the debit card and its associated account will be issued by Utah-based WebBank. Not to be outdone, rival payments firm PayPal announced its own Mastercard on Tuesday, issued by Connecticut bank Synchrony, which can tap into its BNPL offering, PayPal Credit.

On Hold: In April, Klarna postponed plans for a US initial public offering for the second time after President Trump’s announcement of sweeping tariffs left markets reeling and consumer sentiment in the doldrums — although both have since rebounded somewhat. Too bad you can’t IPO in four easy installments.

As per usual, Berlin is a city divided. East versus West. Collectivism versus individualism. Hard-style techno versus groovy, melodic house. And now: the private equity haves versus the private equity have-nots.

This week, PE movers and shakers are gathering in the historic German capital for their annual SuperReturn conference at a time when the once-thriving industry is suddenly and decisively splintering between winners and losers. Among the big winners? Thoma Bravo. According to a report in The Wall Street Journal on Tuesday, the software-focused private equity giant bucked an industry slump to close three separate funds totaling a massive $34.4 billion.

Bravo, Thoma Bravo

Private equity is trapped in stasis. Buyout firms are still sitting on some $1.2 trillion of dry powder waiting to be deployed, about a quarter of which has been available for at least four years, according to Bain & Co.’s mid-year industry outlook. PE now also controls a record 29,000 companies worth some $3.6 trillion, as of Bain’s first-quarter industry report in March; half of those have been owned for five years or more. And that’s part of the problem: Ownership of said companies dates back to the era of lower interest rates and higher valuations, making them harder to move today, as both global M&A and IPO markets have ground to a halt. Translation: PE’s exit ramps are quickly closing.

With fewer and fewer exits, investors are seeing fewer and fewer returns. Which means PE is having a harder and harder time finding backers for new funding rounds — especially with the rise of private credit and other alternative investment vehicles competing for the same cash. All of which is why Thoma Bravo’s big raise makes it such an industry standout:

• Global PE fundraising has declined for five straight quarters, according to Bain, though the firm says there is a chance the trend could be narrowly reversed in Q2. The first three months of 2025 also marked the first quarter in a decade in which no PE firm closed a fund worth at least $5 billion. According to Pitchbook data seen by Bloomberg, global PE fundraising in Q1 reached just $116 billion, down about 33% year-over-year.
• Thoma Bravo’s massive raise spans three different funds. The biggest, a $24.3 billion raise for its main buyout fund, matches its raise from 2022 and bests the $21 billion fund closed by Blackstone in March as well as EQT’s $23.7 billion raise two Februarys ago to be the largest since the start of 2024.

Return Policy: So, just how dismal have PE returns been? According to Bain, contributions from investors have equaled or outweighed fund distributions in five of the past six years. Even more alarming for the industry, according to a recent McKinsey report: Private equity overall has underperformed the S&P 500 over the past year, the past three years, and the past five years — marking a major reversal of the sector through the century so far.

If we had to guess, this year has been pretty rough for your investment portfolio. Unless you were way, way, way overweight on one of Uncle Sam’s new favorite companies.

So far this year, artificial intelligence-powered data analytics firm Palantir has proven the best of the so-called “Trump Trade” companies. Its share price has soared some 77% year-to-date, on the backs of key federal government contracts, to hit a record valuation on Monday of around $314 billion. So, just how high can Palantir fly?

Move Aside, Musk

Following the November election, Wall Street traders poured into a basket of Trump Trade companies — a.k.a. those that seemed likely to benefit from new White House policies (and, to put it frankly, personal and personnel connections). Those include Trump Media, bitcoin and crypto-related stocks; Tesla, of course; and Palantir — co-founded by Peter Thiel, a prominent Trump backer and former employer-slash-mentor of the vice president.

While political ties (among other problems) ultimately dragged Tesla through the mud, Palantir has continued its ascent; its share price has climbed roughly 675% since the start of 2024. That’s because the tech firm — which specializes in using AI to sort through, detect patterns in, organize, and visualize data — has become a favorite of the federal government, especially in the defense sector:

• The US government remains Palantir’s single-largest client. In its first-quarter earnings report, the company said that “US government revenue” accounted for $375 million of its total $884 million in sales; those figures mark 45% and 39% year-over-year jumps, respectively.
• Last week, The New York Times reported that one of Palantir’s signature products, a platform called Foundry, is being used in at least four government agencies, including the Department of Homeland Security and the Health and Human Services Department; the company is also in talks for a permanent contract to provide the platform to the Internal Revenue Service.

“The relationships that Palantir’s founders … have with senior members of the Trump administration are helpful for business,” D.A. Davidson analyst Gil Luria recently told Reuters.

The Sky(net) is the Limit: That’s just for starters. Two weeks ago, the Pentagon announced the addition of nearly $800 million to an already $480 million contract for Palantir’s AI-driven military targeting software, called the Maven Smart System. The company also looks poised to score contracts to help build the administration’s planned nationwide “Golden Dome” missile defense system, which some experts say could cost upwards of hundreds of billions of dollars. In March, the White House issued an executive order to eliminate “information silos” and promote data-sharing across government departments — a process the NYT reports Palantir has been intimately involved with.