Klarna, the Swedish payment giant, has made the United States its largest market by revenue, overtaking Germany.
In an exclusive interview with TechCrunch, CEO and co-founder Sebastian Siemiatkowski revealed that the company saw a 71% year-over-year increase in gross merchandise value (GMV) in the US last year, compared to 2021.
Klarna’s BNPL (buy now, pay later) product, which it introduced in 2018, was a huge factor in its success in the US. The company has 34 million users in the US and its retailer network includes businesses such as Instacart, Groupon, Samsung, Etsy and Fossil Group.
Klarna’s Rapid US Expansion
Klarna’s rapid expansion into the US market can be attributed to its BNPL product, which is used by more than 80% of the adult population in Germany.
Siemiatkowski believes that Klarna is still in the early phase of expansion in the US and its success in the US will depend on its ability to collaborate with merchants and consumers.
The Klarna app has over 8 million monthly active users in the US, and Klarna Card, which allows consumers to pay over time in four interest-free payments, has over 1 million users.
Klarna Goes Beyond BNPL
Although Klarna is often viewed as a BNPL provider, the app has evolved to become an “end-to-end shopping destination”.
It offers money management tools, delivery tracking, wish lists, digital receipts and price-drop notifications.
Siemiatkowski believes that the company’s growth in the US will lead to better risk profiling, enabling it to reduce credit losses.
Klarna is Different from Affirm
Although Klarna is often compared to Affirm, Siemiatkowski views the two companies as very different. He points out that the majority of Affirm’s purchases are spread over two years, while Klarna’s are over four weeks for small amounts, and most of the credit has 0% interest.
Klarna’s growth in the US is a significant milestone for the company. Its success in the US market can be attributed to its BNPL product, which has helped it to expand its network of merchants and consumers.
However, the company is now going beyond BNPL to become an end-to-end shopping destination, offering a range of features beyond payments.
As the company continues to grow, it is expected to become more profitable, and Siemiatkowski is confident that it can continue to reduce credit losses.
