Share This Article
Klarna fintech valuation lowered to $6.7 billion
Fintech Klarna raised $800 million in another round of financing. Investors included such companies as Commonwealth Bank of Australia, Sequoia, and others. Interestingly, the startup managed to get quite a large amount at a valuation of $6.7 billion.
Klarna is the largest fintech in Europe, but its value has fallen almost threefold in just one year, from $45.6 billion to $15 billion. To remedy the situation, in the summer the startup wanted to attract large investments, but there were no guarantees of obtaining the desired amount, and the management abandoned the idea.
It should be noted that in the current funding round, Klarna’s valuation was only $6.7 billion, which is extremely low for this company. For example, in 2019 it was valued at $5.5 billion, and a year later it was already valued at $10.6 billion.
Despite this estimate, experts note that this year the level of popularity of fintech among consumers is the highest ever.
The startup appeared in Sweden in 2005 and operates according to the BNPL model (“buy now, pay later”). The company is a leader in its niche in Europe, primarily in Scandinavia, and has a broad customer and partner base. However, the global economic slowdown and geopolitical conflict also affected Klarna. Fintech had to lay off 10 percent of its workforce, which amounts to about 700 people. Sebastian Siemiakowski, head of the startup, cited economic instability, geopolitical processes in Europe, and the decline of the stock market as the main reasons for the decision. According to the businessman, there is a high risk of recession, and businesses should be prepared for it. At the same time, Klarna notes that the company maintains a strong position in the market, but admits that ups and downs are inherent to everyone. The main problem is that due to the global rise in prices about 30% of service users cannot repay debts, which affects business indicators.
Klarna had a net loss of $749 million last year and $149 million in 2020. There are more than 400,000 retail partners and 100 million customers, plus 47 million that came from mergers with other firms. Klarna’s comprehensive products are considered the most popular among consumers. The startup provides customers with convenient solutions that can save money and time on purchases.