Klarna, the BNPL giant from Sweden has revealed its losses more than tripled in the first half of the year.
Sebastian Siemiatkowski says he is “proud” of Klarna’s latest results, despite the Swedish fintech heavyweight’s losses.
Even though the company is starring down the barrel of a string of existential threats, the CEO of the buy-now-pay-later (BNPL) business believes the company’s best days are ahead of it.
Siemiatkowski said Klarna will be implementing a range of measures to meet the challenges presented by the current economic outlook and risk-adverse investor environment.
It previously cut more than 700 jobs back in May, around 10% of its global workforce.
Klarna rode the BNPL wave during the pandemic, hitting a $46 billion valuation last summer, before crashing down this year, forced to raise funds at huge discount.
Klarna’s market valuation has suffered in recent months as a consequence, tumbling to $7bn after a fresh funding round in June.
“In the past years, Klarna was rapidly expanding through acquisitions which is why it is now in 45 markets with more than 150 million users,” Chris Dinga, payment analyst at research firm GlobalData, tells Verdict.
Siemiatkowski: “We’ve had a few years now where growth has been really heavily prioritised by investors. Now, understandably, they want to see profitability.”
“We’ve had to make some tough decisions, ensuring we have the right people, in the right place, focused on business priorities that will accelerate us back to profitability while supporting consumers and retailers through a more difficult economic period. We needed to take immediate and pre-emptive action, which I think was misunderstood at the time, but now sadly we have seen many other companies follow suit.”
Siemiatkowski added that even though he “[wouldn’t] usually comment on competitors”, he bragged that “Klarna’s GMV is now almost [five times] the size of Affirm’s and we’re also outpacing them for growth in their home market with our US GMV doubling [year over year], up 109%, [whereas Affirm’s numbers were 75% year over year.]”