Klarna - 🇸🇪 💰


Apple joining the fray with a BNPL option, US only to start with, only offers up to 6 weeks compared to the 3 months Klarna offers


I can’t think of anyone I’d rather default on a loan to. Can you imagine how well dressed the Apple Bailiffs are!

I’m surprised that Apple, as a brand, are moving into such a shady/scummy area of business to be honest. Perhaps BNPL doesn’t have the same connotations in the USA?

Credit cards are essentially BNPL and that’s what the whole US has been running on for decades. I guess it’s a normal concept there.

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When you’re forced to raise in this environment the discussions are clearly ‘fluid’ over the valuation. Even still valuations that range from $6.5bn - $10bn is a pretty wide window - that’s not even taking into account the last round of $47bn.

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I am pretty sure that when a valuation drops from $45bn to $6.5bn in a short period of time (and it is not new investors valuing it at $6.5bn, it is old investors who want to save their old investment by punting good money after bad) it means there is a very high probability that the company is about to die very soon :worried:


If Klarna didn’t need this $600m I doubt they’d be doing this, they’re getting hot from all sides.

  • To compete with BNPL coming from the likes of Apple as well as traditional competitors their losses have grown massively.

  • Consumer spending is down and that means less reliance on Klarna.

  • As we enter the looming recession bad debts will start to become a real problem.

I don’t know if they’ll go to the wall but they could end up merging with another Fintech like Revolut.

Not just the US. The people of the UK owed £1,786.6 Billion at the end of April 2022 (albeit including their mortgages)

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Given the crash in valuation, I wish to update this. Karna is actually the lovechild of Wonga and WeWork.


BNPL certainly dosen’t seem like the place you want to be currently…

Looking at Klarna’s accounts back to 2016 I find it quite interesting that they seem to have been profitable for the years 2016-2018 while growing ~30%. Then started posting quite substantial losses from 2019 and onwards, while not really growing a lot more.

Obviously bank accounting is complicated and above my pay grade, so could be down to a change in how they account for losses or something, but still found it interesting and a bit surprising.

Edit: Just noticed @NeilB have already posted about this a few months ago.


@Kristian Haj, long time no post :wave:

I think this is really interesting, it really demonstrates the insanity in valuations in the grow at all costs 2019-2021 period.

I wonder why they stop being profitable? Did the growth machine eat huge sums of money or did the rising competition challenge their margins? Either way, it’s a troubling sign.

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Klarna, the “buy now, pay later” fintech darling that was once Europe’s most valuable private tech company, has seen its value slashed by 85% to less than $7bn in its latest round of fundraising.

Ouch. Source Klarna sees its value slashed by 85% in latest round of fundraising | Buy now, pay later | The Guardian


Klarna valued itself when looking for funding at 45 billion from growth capital and they paid up…suckers.
At that point Barclays was worth 35 billion. Klarna was not profitable, nothing unusual there growth is more important, profits come later.
Less than a year later they came back for another 800 million. Valuation was then 5.7 billion pre money.
The important thing to note here is that higher interest rates means they struggle for funding
So the 5.7 billion might now be reasonable even cheap.
Either way the relatively new growth capital sector of investment trusts has been decimated. With companies like chrysalis going from big premiums to 60% discounts. Klarna make up 27% Chrysalis NAV…
They may not yet have done there asset valuation.


Shortened version emphasis on klarna

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I bought hg capital and 3i group during july selling value investments which looked tired.
Both are up about 12%.
Some private equity investment trusts are on discounts of 40%.
3i group is on 10% discount (according to Hargreaves Lansdown).
3i group on 10% discount is cheaper than the one on 40% discount.
They rarely go beyond a 20% discount.
3i are normally on 20% premium. Once they actually reached a ridiculous 45% premium.
hg capital has had excellent growth. I will probably add to them

PS klarna doesn’t charge interest to the consumer they charge the seller.
“In the UK, Klarna doesn’t charge any interest on its “Pay in 30 days” or “Pay in 3 instalments” plans. But the service’s “Financing” option is more like a credit card and this does charge interest (representative APR 18.9% variable).”
So feel free not to put them in the same category as wonga or any other pay day loan companies.
Even the credit card option is cheaper than virtually all credit cards.
Obviously i am not including my £18,000 zero interest credit card debt!!

In response to the news, Klarna boss Sebastian Siemiatkowski told investors today that the company has slashed 10% of its workforce and is preparing to issue smaller loans to some customers as it moves to return to profitability.

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