Swedish payment service Klarna also feels declining investor interest in fast-growing and loss-making fintech companies. The company said in Stockholm on Monday it had secured $800 million in new financing, equivalent to a valuation of $6.7 billion. That means the company has lost about 85% of its value in a year.
Klarna CEO Sebastian Siemiatkowski downplayed the significance of the company’s valuation decline and insisted that the deal was a “testament to the strength of Klarna’s business.” He continued to remark that “During the steepest drop in global stock markets in over fifty years, investors recognized our strong position and continued progress in revolutionizing the retail banking industry.”
Klarna had already announced in May that the company would cut 10% of its jobs to save costs. Volatile stock markets and the prospect of a likely recession had also contributed to the decision. The job cuts would affect all parts of the company, Klarna had said.
“Klarna’s valuation is entirely due to investors suddenly voting differently than they have in recent years,” said Michael Moritz, partner at venture capital firm Sequoia. Sequoia, the company’s founders, Bestseller, Silver Lake and Commonwealth Bank of Australia had participated in the latest round of funding.