[Crowdfunding] Klarna - 🇸🇪

It’s interesting to see more tech companies considering a LSE float.

In an interview with Bloomberg Sebastian Siemiatkowski, CEO and founder of Klarna, said that Brexit could create an “amazing opportunity” for London to solidify itself as a world fintech leader.

We can only hope :crossed_fingers:

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What are peoples thoughts on this for Crowdcube? Launch tomorrow.

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I’m giving it a swerve. They don’t have a moat and I don’t feel confident in the potential upside.

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Gotta be honest they were not really exciting me but was interested if others thought differently.

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I’ve made a small investment in this on Crowdcube.

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£600k! Yeah ‘small Investment’ @Lee76 :joy:

It looks like Crowdcube is also starting seriously focusing on secondary market (same as Seedrs), this might change investments strategies in the next few years? I believe with Klarna it is the first time they are doing a secondary market crowdfunding. Who is next? Freetrade?

  • The Consumer Financial Protection Bureau issues a series of orders to five “Buy Now, Pay Later” companies, including Affirm Holdings (NASDAQ:AFRM), Afterpay (OTCPK:AFTPF) (OTCPK:AFTPY), Klarna (KLAR), PayPal (NASDAQ:PYPL) and Zip, to collect more information on the risks and benefits of BNPL services, the agency says in a release.
  • Shares of (AFRM -9.6%) drop to five-session lows, trading below its 200-day simple moving average at $104.81 per share. The rest of the BNPL group trades somewhat higher, though (PYPL -0.5%) is off a bit so far on Thursday.
  • As the BNPL market gains more traction, especially over the past year, the agency is concerned about accumulating debt, regulatory arbitrage and data harvesting.
  • “Buy now pay later is the new version of the old layaway plan, but with modern, faster twists where the consumer gets the product immediately but gets the debt immediately too,” said CFPB Director Rohit Chopra.
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I made a small investment (£150 so very small) :slight_smile: While I believe the BNPL market is saturated, and there are better offers (see Monzo Flex for an ethical way to do BNPL) Klarna’s app is superb.

Their app is a marketplace (think Amazon but in the style of Depop) that lets you see and buy clothes from all the top brands. An aggregator of online stores, and with their new browser extension & in-app browser you can use Klarna on anything. Their moat is the shops already wired into the app, it acts almost like a social media site. You join the Klarna app to get more customers to select you (as they can use Klarna to pay or mix & match outfits), and customers use the app to see all the great clothing and to use Klarna to pay.

What I like is the idea of a continuous subscription model. Say you wanted to buy a bunch of designer outfits every season but didn’t have the cash to do it, you could use Klarna to find the clothes (using the aggregator) and pay monthly for them.

In a way I view it like a “You pay monthly to get these fancy designer clothes, and you pay a fee on top of that for the service we provide which lets you pay monthly”

It is predatory, but it is also a good market. The right market, given the option, will happily fork a monthly subscription to wear designer clothes — especially when they grew up with the subscription model.

Like any good credit card company you want to put them into debt enough so they pay you money, but not enough debt where they can’t pay at all. This is done via credit limits, which Klarna has.

I’ll also leave you all with this meme of predatory BNPL practices :joy:

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Anyone know what happened to the Crowdcube fund raising for Klarna recently (secondary market?
It appears not all investors received shares? Anyone have details?

Received an email this week from CC to say the deal fell through :frowning:
Due to “significant delays in processing the share transfer”. No idea what that really means

Good for everyone who invested into Klarna at CC. The valuations were too high especially after the crash.

If Klarna were public I think their share price would be off 70% over the last 6 months.

If I’ve understood it right from a glance through their full year 2021 report, what caused most of the spike in net loss was share based payments for acquisitions, see page 45 of the report;

Quote - Certain parts of the consideration shares of Klarna Holding AB (publ) have vesting conditions.
The share-based payments have been measured in accordance with IFRS 2, Share-based Payment, at the acquisition date.
The total cost of share-based payment is allocated over the duration of the vesting period and is reported as General and administrative expenses in the Group’s Income Statement.

I didn’t look/workout the acquisition costs, but I’d bet its there based on administrative expenses increasing from 8.68m to 15.0m and the statement above.
So probably not as bad as it seems on the surface.

Not that I’m invested or would invest in them, the retail aspect isn’t really my thing.

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https://www.bloomberg.com/news/articles/2022-05-19/klarna-seeks-new-funding-at-lower-30-billion-valuation

How was it ever worth so much in the first place?!

It’s just the modern day offspring spawned from a drunken night out between the Littlewoods catalogue and Wonga.

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