STOCKHOLM (Reuters) - Swedish payments firm Klarna, one of Europe's most highly valued tech startups, said on Monday it had tapped debt markets for the first time, issuing subordinated notes totaling 300 million crowns ($35.2 million).

The move comes as other technology firms are also opting for debt rather than equity to raise fresh funds.

Klarna, which handles about 10 percent of all online transactions in Europe and launched last year in the United States on online payments giant Paypal's home turf, said it issued debt to support its expansion and diversify funding. It added that this issue was a first small step to a wider presence in debt capital markets.

"First is to fund our accelerated growth - we are picking up speed in our year-on-year revenue growth because of success of recent product launches and markets expansion in the U.S. and U.K.," said Klarna spokesman Erik Engellau-Nilsson.

"Second is to test the debt capital markets and see what the appetite was like," he said, adding that Klarna had received much lower rates than peers.

Klarna, which saw revenues grow nearly 30 percent last year, has said it is profitable without offering specific details. Based on an equity financing round at the end of last year, Klarna had a $2.25 billion valuation after Swedish insurer Skandia bought a 1-percent stake for 200 million crowns, Swedish media have reported.

Tech companies on both sides of the Atlantic have been busy issuing debt as equity valuations have come under scrutiny by investors due to worries over a possible tech bubble.

Klarna said the 10-year notes have a floating rate based on three-month STIBOR plus 4.5 percent per year, or an initial coupon of about 4 percent. It added that notes were allocated to a limited number of large Nordic investors.

Klarna investors include the founders, Sequoia Capital, Skype founder Niklas Zennstrom's Atomico, General Atlantic, DST, Wellington Management CO and Wellcome Trust. Michael Moritz, a Sequoia Capital partner whose milestone investments include Google and PayPal, is also on its board of directors.

Klarna users don't have to create an account or type in credit card details when checking out in an online store using its services, entering instead as little as an email address and zip code to settle the bill while having the option of paying Klarna later, as with a normal credit card.

The company told Reuters in February it generated 2.8 billion Swedish crowns in revenues last year, up from 2.2 billion crowns in 2014, thanks to strong sales in the Nordics and its German-speaking markets. It expects revenues to rise by about 40 percent this year as it grows in the U.S. market.

(Reporting by Mia Shanley; Editing by Eric Auchard)