By John Reynolds on Monday 28 February 2022
The Swedish buy now, pay later giant’s net losses of £560m compared to losses of £110m the year previous.
Losses at Klarna swelled by more than five-fold in 2021 to £560m (7.1bn Swedish crowns) as it was hit by costs of entering new markets and bolstering its product offering last year.
The Swedish buy now, pay later giant’s net losses compare to losses of 1.4bn Swedish crowns (£110m) the year previous.
Operating losses rose to £520m (6.6bn Swedish crowns) compared to £130m (1.63bn Swedish crowns) in 2020.
Klarna, valued at £34.1bn and Europe’s most valuable fintech, said its operating expenses in 2020 included entering five new markets and expanding its shopping app in other markets.
But the buy now, payer later giant underscored the rude health of its business by highlighting that it now had more than 100m customers globally.
In 2021, gross merchandise volume (GMV)- the total volume of sales through its payment platform- surged by 42 per cent to $80bn (£59bn).
It said its rewards programme, which it's launching in the UK later this year, now has 4 million members in the US and Australia.
CEO Sebastian Siemiatkowski also urged Klarna customers to pay upfront by using Klarna’s instant payment function, Klarna Pay Now, amid criticism from some quarters that buy now, pay later can lure people into getting into debt.
Siemiatkowski said: “Let’s set the record straight once and for all. Consumers should first and foremost pay with money they have. Period. This is why we are continuing to expand our Pay Now option.”
But Siemiatkowski said using the buy now, payer later option can make sense for online purchases.
He added: “The opportunity to touch and feel before you pay, the ability to avoid having to wait for your money back while retailers’ process returns are just two great examples of where credit makes sense.”
Klarna said that 99 per cent of its lending was repaid.
It added: “Credit cards have functioned as a massive redistribution of wealth by either entirely excluding low income households or charging them high APRs.
“High income households have been given free interest options in combination with aggressive cashback and loyalty points systems effectively working as a redistribution of wealth from the poor to the rich.”