The payment service provider Klarna is suffering from consumer restraint. Nevertheless, Klarna CEO Sebastian Siemiatkowski is optimistic. Growth in the U.S. and the U.K. gave the “Buy-Now-Pay-Later” pioneer Klarna an increase in revenue in the first nine months of the year. Revenues and payment volumes rose 22% year-on-year, the Swedish fintech announced.
However, Klarna remains in the red: Net losses tripled to 8.34 billion Swedish kronor (about 760 million euros) from January to September compared with a year earlier. In the third quarter, however, losses fell by 41% compared to the previous quarter.
The first half of the year had not been smooth sailing for Klarna due to consumer reluctance to buy as the war in Ukraine and rising inflation reduced purchases. To save money, the company laid off 700 employees, ten percent of its workforce, and its valuation shrank. Investors valued the fintech at around 45 billion euros a year ago. The sharp drop in the value of tech companies in the weakened economy pushed the valuation down 85% to 6.5 billion euros in the summer.
Klarna CEO Sebastian Siemiatkowski was nevertheless optimistic, saying the fintech should post monthly profits in the second half of next year. “It is important to distinguish here that we could still make losses for 2023.” Klarna is one of Europe’s largest fintechs and last posted black figures in 2018. It does not expect any further large waves of layoffs.