Swedish financial technology start-up Klarna has reported an annual loss for the first time, following years of profitability.
Klarna, which lets people buy items online and pay for them over installments, reported a loss of 1.1 billion Swedish krona ($113 million) on revenues of 7.2 billion krona from January to December 2019.
The losses have been attributed to its expansion into UK and US markets and represent the 15-year-old company’s first time in the red.
The company also hit 7 million customers in the UK, with year-on-year global volumes and revenue increasing by 32 % and 31% respectively while the volume processed now amounts to over SEK322 billion (£25.8 billion).
In a note to its shareholders, Sebastian Siemiatkowski, the CEO and Co-Founder of Klarna, said: “While we share many impressive business metrics in this report from 2019, the reality is Klarna must continually evolve, we cannot be complacent. By nature people are generally creatures of least resistance, we defer to the road most traveled, the path best paved.”
“However, if we at Klarna want to deliver above the industry status quo, build a global brand and drive change in the paradigm of retail, payments, and banking, we need to actively seek out complexity, dare to be different and set ourselves ambitious goals on the solutions we bring.”
“We, therefore, will continue to make necessary investments in talent, products and the platform to further strengthen our capabilities across all markets and parallelity in execution,” he said.
Klarna, which is now the joint-largest FinTech in Europe, has partnerships with 200,000 merchants across 17 markets, including Asos, H&M, and Expedia.
‘Buy now pay later’ services have become the fastest-growing online payment method in the UK, growing twice as quickly as bank transfers and more than three times the rate of annual growth in digital wallets, according to a global payment report from Worldpay.