Klarna still loss-making but profitability gets closer

By

Sandra Halliday

Published
Mar 1, 2023

Klarna — the Swedish buy now, pay later payments giant — has posted another loss but also said it’s edging closer to profitability.

The company reported operating losses 43% lower at SEK3.51 billion (£279 million) for the last three months of 2022.

But for the full year, the net loss widened from SEK7.1 billion to SEK10.4 billion.

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The company, which cut a large number of jobs last year, is a favourite option for fashion firms and recently unveiled Paris Hilton as the global face of its new campaign.

Looking again at Q4, it said net losses reduced to SEK1.9bn from SEK 4.6 billion in the previous Q4, and credit losses fell 18% to SEK1.4 billion.

The gross merchandise volume (GMV) of its loans rose 22%, to SEK242bn as BNPL proved ever more popular and it now has 150 million consumers using its services globally.

The US became its largest market revenue-wise in December (overtaking Germany) with GMV up 71% year on year.

Co-founder and CEO Sebastian Siemiatkowski said that the GMV rise was a sign of its strategy working.

The company has also just announced that it’s to introduce late payment charges to UK customers in order to curb loan defaults.

From the middle of this month, it will begin charging fees of up to £5 to customers who miss payments. Fees will be capped at 25% of the order value with no more than two fees per order.

The company has also been under pressure with some critics saying that its no-fee approach is encouraging irresponsible spending.