Klarna ‘rebuts misconceptions’ about business model as losses narrow

Global payments giant Klarna is returning to black after a brutal 2022.

Having seen losses triple in the first half of last year, an eventual overall loss of $1bn, a slashed valuation and a series of job cuts, the fintech saw a profitable month in the first half of 2023.

It also saw its second-quarter losses slashed by 76 per cent compared to the same period last year, dropping from €320m to €76m.

The fintech, once branded a ‘buy now, pay later’ giant, has now pivoted to self-describe as an ‘AI-powered payments network and shopping assistant’ and saw revenue increase by 17 per cent year-over-year in Q2, with retailer revenue increasing by almost a quarter (23 per cent) as new partners like Airbnb and Selfridges came on board.

“Today's results clearly rebut the misconceptions around Klarna's business model, evidencing that it is incredibly agile and sustainable as we support our healthy consumer base in making sound financial decisions,” Klarna CEO Sebastian Siemiatkowski said.

“Some claimed Klarna would face difficulties in the tough macro-economic climate with high interest rates, but having led the company through the 2008 financial crisis I knew we had a strong and resilient business model to see us through. Despite the volatile environment, we have done exactly what we set out to do.”

Taking to X/Twitter, Siemiatkowski specifically noted the fintech’s growth in the US as a win for the company.

Klarna has had a concerted focus on the US for the past few years, and has now see three consecutive quarters of gross profit.

According to the CEO, “it’s looking like we’ll rack up $100m revenue in a year”.

Klarna’s first half results follow news that the company has implemented OopenAI’s API for half (2,500) of its employees internally and is one of the first to deploy ChatGPT Enterprise.

Siemiatkowski has been a staunch fan of ChatGPT from the start, and Klarna even created a plugin with the site back in March this year, broadening its abilities as a shopping assistant and as a company overall.