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Hope for 2023
: Klarna boss
Sebastian Siemiatkowski
wants to make profits again next year – at least in individual months
PHOTO: SUPANTHA MUKHERJEE/ REUTERS
Not so long ago, the Swedish financial platform Klarna from founder
Sebastian Siemiatkowski
(41) was by far the most valuable start-up in Europe.
As is well known, the times are over, Klarna slipped into the loss zone, had to throw out masses of people - and is struggling to somehow get back into the profit zone.
Siemiatkowski has now presented the figures for the third quarter - and the situation is still extremely tense.
The operating loss in the past three months has decreased by 42 percent to 2.1 billion Swedish crowns - the equivalent of around 190 million euros.
The now lower labor costs also played a role.
"Great progress has been made on our way to profitability", Siemiatkowski was pleased to report in the official report.
All markets would grow, especially the rapidly growing US business gives cause for hope.
Klarna has already processed online purchases of over 58 billion euros this year, around a fifth more than in the previous year.
But it will be a while before Klara really becomes profitable again.
The founder himself promises operating profits for the second half of 2023 - and initially only in individual months.
The positive messages do not cover up the dramatic figures for the first nine months of 2022. Klarna recorded an operating loss of around 760 million euros - more than two and a half times as much as in the same period of the previous year.
The increase in loan defaults is also essential for this: by the end of September, loans worth the equivalent of around 390 million euros had failed – compared to the same period last year, this is an increase of 46 percent.
Investors should be particularly interested in this figure.
Among other things, as a so-called buy-now-pay-later provider, Klarna grants short-term consumer credit to shoppers in online shops.
Their creditworthiness is a risk, especially in times of impending recession.
Relative to the total amount of online purchases processed via Klarna, the failure rate in the summer months fell compared to the previous quarter to 0.7 percent, according to the company.
But in absolute figures, the total should also have increased in a quarterly comparison.
The cash flow did not look good in the first nine months of the year either: Klarna recorded a negative cash flow of around 470 million euros.
In the same period last year, it was still an increase of 560 million euros.
With a valuation of more than 45 billion dollars, the Swedish fintech was by far the most valuable start-up in Europe up until the beginning of this year.
In order to collect fresh capital, however, CEO Siemiatkowski had to accept significant valuation discounts.
In the round that ended this spring, Klarna was only valued at 6.7 billion euros.
In order to reduce costs, Siemiatkowski had announced massive cuts.
At the beginning of the year, a good 10 percent of the workforce was made redundant.
After all, the founder does not expect further waves of layoffs.
And anyway: The business model has also shown strength in the now more difficult times.
lhy