Despite the losses, Klarna’s shopping volumes in the US expanded by 311 per cent year on year.
Rapid growth is one of the main selling points, but sometimes it can get in the way of profitability, something that Klarna has recently discovered.
The buy-now-pay-later giant saw its losses increase more than tenfold in the first half of 2021 compared to the same period last year, rising to £81m (SKr965m) up from just under £7.5m (SKr89m) in 2020.
Despite being one of the first fintechs to reach profitability, Klarna has been loss-making since 2019 largely thanks to widening credit losses and its rapid expansion across namely the US but also New Zealand, France, Spain and even more recently Poland.
“Sustainable credit is the basis of our long-term business model. Klarna’s innovative products that suit the way consumers shop, pay and bank today, drive huge benefits for consumers and retailers,” Sebastian Siemiatkowski, CEO and co-founder of Klarna said.
“This is why Klarna’s growth has consistently outpaced both global and US e-commerce for the last three years as we continue to connect consumers and retailers in new ways to elevate the shopping experience.”
In the US, Klarna saw its shopping volumes explode by 311 per cent year on year and saw its merchant numbers increase by 90 per cent up to the end of June 2021, with the fintech counting nearly 10,000 merchants on its platform.
Klarna also recently surpassed 20m customers stateside, taking its total customer number globally to over 90m.
The fintech’s interim annual report also revealed that there are currently 660,000 Klarna cards in use across Sweden and Germany, up 83 per cent on the year before.
Klarna has long been supportive of tighter regulation, and continued to voice its support of the Woolard Review, yet took aim at its more traditional rivals.
In the report, Siemiatkowski called the traditional credit market “unsustainable” and asserted that “credit cards drive economic inequalities,”—for a company in a sector that is currently under intense regulatory scrutiny, it’s certainly a hard line to take.
Last month the fintech acquired Swedish software-as-a-service platform APPRL, before that it was German digital wallet fintech Stocard for around €110m and before that London and New York-based social shopping platform Hero.