Klarna’s quarterly losses halve as it gets ‘firmly on track’ for profitability

CEO Sebastian Siemiatkowski said the fintech is 'on track' to achieve monthly profitability in the second half of this year.

After a tumultuous 2022, Swedish fintech Klarna kicked off the first quarter of 2023 by halving its net losses.

According to the payments platform and ‘buy now, pay later’ (BNPL) giant, it is “firmly on track” to hit profitability on a monthly basis in the second half of this year.

The fintech posted a net loss of SEK 1.3bn ($120m) for Q1, down 52 per cent from SEK 2.6bn ($240m) for the same period last year.

Its credit losses also shrank by 35 per cent from SEK 1.2bn ($110m) in Q1 of last year to SEK 800m ($74m) in Q1 of this year.

“This quarter we’ve impressively managed to grow GMV and revenue, at the same time as we cut costs and credit losses, and also investing ambitiously in AI driven products,” Klarna co-founder and CEO Sebastian Siemiatkowski said.

“We are on track to achieve profitability this year all while revolutionizing shopping and payments through our AI-powered approach.”

Klarna recently announced a suite of AI-powered tools and creator-focused features as part of its revolution, using Klarna’s in-house developed AI.

The new tools include an ‘Ask Klarna’ personal shopper service — it also has integrated with ChatGPT — a new resell feature and ‘Creator Shops’.

It also announced a partnership with Airbnb in the US and Canada this week and the launch of a credit ‘opt out’ feature in the UK.

This continuous rollout of features and products, and improvement in its Q1 results, follows a year of multiple rounds of mass layoffs as well as an 85 per cent valuation cut that saw it knocked off its pedestal as Europe’s most valuable private tech company.