Connect with us


Klarna Wants To Go Public with Black Numbers

According to the Bloomberg news agency, the IPO could take place as early as the third quarter. As a result, Klarna is aiming for a company valuation of $20 billion, making it one of the biggest stock markets debuts this year. The company’s CEO Siemiatkowski did not want to comment specifically on the IPO or the targeted valuation. Klarna was once the most expensive unlisted European start-up.




The Swedish payment service provider Klarna wants to get back into the black for the first time since 2018. “We will definitely be profitable this year. The only question is how high the profit will be,” said co-founder and company boss Sebastian Siemiatkowski in an interview with Handelsblatt.

Read more about Klarna and fidn the latest business news of the day with the Born2Invest mobile app.

Klarna is aiming to go public, possibly as early as this year

For investors, what progress the company makes in terms of net income will likely play a big role.

Last year, the Stockholm-based company reduced its net loss by 76 percent to around 230 million euros – mainly thanks to lower expenses. “I like black numbers. “But it was necessary to invest more in order to gain a foothold in the USA ,” said Siemiatkowski, explaining the years-long expansion course. The USA has now overtaken Germany as Klarna’s largest market.

The costs are also continually falling because Klarna has fewer and fewer employees. The financial company has not hired any new staff since October.

The company boss wants to stick to that for now: “Due to the normal fluctuation, which is around 20 percent of the workforce per year in tech companies, I assume that we will have between 3,100 and 3,200 employees at the end of the year.” Currently there are 4000 people. At the end of 2022 there were around 2,000 more employees.

Siemiatkowski explained that Klarna is significantly more productive and its employees are more efficient thanks to the use of AI: “With the help of AI, we are able to continue to grow and invest, and do so with significantly fewer employees.” In the past year, revenue increased significantly around a fifth.

SAP boss Christian Klein recently made similar statements. AI is a technology that should make the organization more efficient. At the same time, he announced that 8,000 jobs would be cut, but unlike the Klarna boss, he does not want to reduce the total workforce and hire them elsewhere.

Savings thanks to artificial intelligence

Just last week, Klarna introduced a chatbot based on the ChatGPT language model from OpenAI. According to Siemiatkowski, he primarily answers “simple customer inquiries.” The AI ​​assistant now has the same workload as 700 full-time employees in call centers. The company has 150 million active customers worldwide and makes two million transactions per day.

Klarna is now really saving money with the new AI bot: “We have calculated the costs for customer service in advance for 2024. After launching the chatbot, we found that it would allow us to spend around $40 million less.” To date, few companies have been so specific when it comes to savings through AI.

With the news, Klarna also sparked new discussions about the future of customer service – and caused the share price of the French call center operator Teleperformance to collapse by 30 percent.

According to Siemiatkowski, the chatbot is just Klarna’s first step when it comes to integrating artificial intelligence into the payment service provider’s offering. There are further initiatives in store, said the Swede, who co-founded Klarna in 2005. He didn’t want to give details.

At the same time, he stated that Klarna should play a leading role in the AI ​​race. “ I have always stayed away from Bitcoin and crypto, but when it comes to AI, I am convinced that this technology creates real value,” explained Siemiatkowski. That’s why every employee at Klarna will learn to use AI.

Klarna: going public this year?

According to the Bloomberg news agency, the IPO could take place as early as the third quarter. As a result, Klarna is aiming for a company valuation of $20 billion, making it one of the biggest stock market debuts this year.

Siemiatkowski did not want to comment specifically on the IPO or the targeted valuation: “I want to create value for my shareholders. Ultimately, when it comes to an IPO, the market decides what value is assigned to us.” Klarna was once the most expensive unlisted European start-up. The valuation rose to almost $46 billion in 2021, but fell back to almost $7 billion in the following year as a result of the interest rate turnaround and the crash of tech stocks on the stock market.

This caused great uncertainty in the fintech industry. Internationally active investors such as Sequoia Capital, Mubadala, Silver Lake, GIC, Blackrock and Atomico are now likely to bet on further appreciation.

Since the interest rate turnaround and new regulations for mini-loans, not only in the European Union, investors have been looking much more critically at companies where installment purchases (“buy now, pay later”, BNPL) are part of their business. Klarna’s competitors such as Adyen and Paypal have also recently felt this.


(Featured image by AhmadArdity via Pixabay)

DISCLAIMER: This article was written by a third party contributor and does not reflect the opinion of Born2Invest, its management, staff or its associates. Please review our disclaimer for more information.

This article may include forward-looking statements. These forward-looking statements generally are identified by the words “believe,” “project,” “estimate,” “become,” “plan,” “will,” and similar expressions. These forward-looking statements involve known and unknown risks as well as uncertainties, including those discussed in the following cautionary statements and elsewhere in this article and on this site. Although the Company may believe that its expectations are based on reasonable assumptions, the actual results that the Company may achieve may differ materially from any forward-looking statements, which reflect the opinions of the management of the Company only as of the date hereof. Additionally, please make sure to read these important disclosures.

First published in Handelsblatt. A third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.

Although we made reasonable efforts to provide accurate translations, some parts may be incorrect. Born2Invest assumes no responsibility for errors, omissions or ambiguities in the translations provided on this website. Any person or entity relying on translated content does so at their own risk. Born2Invest is not responsible for losses caused by such reliance on the accuracy or reliability of translated information. If you wish to report an error or inaccuracy in the translation, we encourage you to contact us

Valerie Harrison is a mom of two who likes reporting about the world of finance. She learned about the value of investing at a young age upon taking over her family's textile business when she was just a teenager. Valerie's passion for writing can be traced back to working with an editorial team at her corporate job, where she spent significant time working on market analysis and stock market predictions. Her portfolio includes real estate funds, government bonds, and equities in emerging markets such as cannabis, artificial intelligence, and cryptocurrencies.