Company type | Private |
---|---|
Industry | Finance |
Founded | 2005 |
Founders |
|
Headquarters | Stockholm, Sweden |
Key people |
|
Revenue | US$1.9 billion (2022) |
Total assets | US$11.9 billion (2022) |
Total equity | US$1.2 billion (2022) |
Number of employees | 5,441 (2022) |
Website | klarna |
Footnotes /references [1] [2] |
Klarna Bank AB, commonly referred to as Klarna, is a Swedish fintech company that provides online financial services. The company provides payment processing services for the e-commerce industry, managing store claims and customer payments. [3] The company is a "buy now, pay later" service provider. [4]
The company has more than 5,000 employees, most of them working at the headquarters in Stockholm and Berlin. In 2021, the company handled about US$80 billion in online sales. [1] As of 2011 [update] , about 40% of all e-commerce sales in Sweden went through Klarna. [5] In 2021, the company was Europe's most valuable private tech company, at a $45.6 billion valuation. However, their valuation was cut to $6.7 billion in 2022 after struggling to attract additional outside investment. [6] [7] [8] [9]
The three founders Sebastian Siemiatkowski, Niklas Adalberth and Victor Jacobsson founded Klarna in 2005 after participating in the Stockholm School of Economics annual entrepreneurship competition. [10] [11] [12] angel investor Jane Walerud, invested in their company and connected them with a team of programmers. [13]
In 2007, venture capital firm Investment AB Öresund invested in the company. [14] Three years later, Klarna started providing services in Norway, Finland Denmark, Germany and the Netherlands. They also received an investment from Sequoia Capital, [15] and increased their revenue by over 80% to US$54 million (~400 million SEK). [16] In 2011, British newspaper The Telegraph listed Klarna as one of Europe's 100 most promising young tech companies. [17]
In 2011, growth equity firm General Atlantic led a $155 million investment round joined by DST Global, and General Atlantic's managing director Anton Levy joined the board of directors. [18] [19] In May 2011, Klarna acquired Israeli company Analyzd, which provided risk management and fraud prevention services
In 2013, Klarna and German SOFORT AG merged to become Klarna Group. [20]
Klarna launched in the United States in September 2015, [21] and the US has become its principal focus for future growth, after securing exclusive partnerships with luxury department store Macy's. [22] [23] [3] [24] That year, Minister of Enterprise and Innovation Mikael Damberg dubbed Klarna one of Sweden's "five unicorns", by which he meant startup companies that had succeeded in growing and attracting international investments. The other four companies were Spotify, Mojang, Skype, and King. [25]
In September 2018, Klarna acquired Close Brothers Retail Finance from the UK Close Brothers Group. [26] [27]
In 2019, Klarna raised $460 million with plans to expand its operations the US, with participation from Dragoneer Investment Group, Commonwealth Bank of Australia, HMI Capital, Merian Chysalis Investment Company Limited and others. [28] This funding round valued the company at $5.5 billion, making Klarna the largest fintech start-up in Europe. [29] In 2020, Klarna acquired Nuji, a marketplace for fashion and lifestyle goods. [30]
In 2020, Ant Financial, the payment affiliate of Chinese e-commerce company Alibaba, invested in Klarna as part of a partnership between the two firms. [31]
In June 2021, Klarna raised $639 million in a fundraising round led by SoftBank Group's Vision Fund 2, increasing the company's valuation to $45.6 billion. [32]
In November 2021, Klarna launched its physical card, which enabled users to make purchases in interest-free installments. [33] In January 2022, Klarna launched their physical card in the UK. [34] The card had a wait list of 400,000 users as of January 2022 [update] . [35]
In March 2022, Klarna acquired PriceRunner, a company that provides price comparisons on products. [36]
In May 2022, Klarna laid off roughly 10% of its workforce. [37] [38]
In June 2022, Klarna announced a partnership deal with card issuer Marqeta to bring physical Visa cards to the US. [39]
In July 2022, Klarna raised $800 million in funding at a valuation of $6.7 billion. Their valuation dropped 85% in one year, in line with decreasing valuations of unprofitable technology companies. [8] Klarna lost $580 million between January and July 2022. [40] In September of that year, Klarna announced plans to lay off an additional 100 employees. The announcement came after budget revisions due to its drop in valuation and announced losses.
Since September 2022, Klarna offers savings accounts and deposits to Spanish customers through Raisin Bank . [41]
In October 2022, the company launched a new "Klarna Creator" application for retailers and influencers to collaborate on brand campaigns and to track their earnings. [42]
In January 2024, the company announced a plan for a monthly subscription plan ahead of an anticipated initial public offering later in the year. Users of the service, called Klarna Plus, would earn double the amount of usual reward points, attain access to a selection of discounts from partners like Nike and Instacart, and see service feeds waived when using the Klarna One Time Card. The fee would be $7.99 each month, as opposed to typical fees of $1 or $2 when using the service outside the network at retailers like Walmart or Costco. The company's Chief Marketing Officer, David Sandstrom, said there were also plans for a high-yield savings account in the US, with potential for subscribers to earn a higher rate than non-users. [43] [44] [45]
In February 2024, Klarna announced that AI replaced 700 employees at the company, about 10% of the workforce at the time. [46] [47]
In the UK, Klarna operates in the rapidly growing post-payment sector which has been criticised for encouraging consumers to get themselves into unserviceable levels of debt. [48] In February 2021, the UK Government announced that the sector would be subject to regulation from the UK's Financial Conduct Authority. [49]
In Sweden a large number of complaints regarding Klarna were sent to the Swedish Consumer Agency in 2014. Many customers had received reminder fees and threats about debt collection without having received a proper invoice. It was speculated if this was an unethical business model since the company made money on these reminder fees and Klarna also had a subsidiary dedicated to debt collection. The Swedish Consumer Agency also found a reason to investigate how Klarna added credit fees for partial payments. [50] The year before the co-founder Niklas Adalberth said in a presentation during the startup conference Arctic15 that: "That is one of our revenue streams [...] the best customer is the one that doesn't pay directly but actually [gets] a reminder and then also debt collection because we are able to add the legal fees." [51]
In Germany, the District Court of Bremerhaven ruled in 2022 that Klarna could not demand a flat rate of €1.20 for a reminder by e-mail because Klarna had not submitted any corresponding costs. [52] [53]
In February 2020, Der Spiegel reported that Klarna's autofill feature allowed anyone to extract personal information, such as phone number, postal address and date of birth, only based on the email address and postal code of a customer. [54]
In October 2020, Klarna mistakenly sent a marketing email to people who had never disclosed their contact information to Klarna. This triggered an investigation by the Information Commissioner's Office in the UK. [55]
For a brief period in May 2021, users could view the information of other users using their own login information. Klarna claims that user information was exposed randomly, and that these exposures only contained non-sensitive data. However, users claimed that they were able to view addresses, phone numbers, and payment details of other people. [56] [57]
Identity thieves have used Klarna to commit fraud. They exploited Klarna's buy now, pay later scheme to make purchases with a small upfront payment on a stolen account, flip those goods at a much higher price, and then evade making payments. [58] [59] [60] The company stated that its fraud checks and controls are as strict as those of banks. [59]
In March 2022, the Swedish Authority for Privacy Protection (Integritetsskyddsmyndigheten) fined Klarna 7.5 million kr for inadequacies in its privacy notice and handling of personal data. Klarna stated it would appeal the decision for further clarification on the guidelines. [61] [62]
In May 2022, Siemiatkowski revealed it would be laying off more than 10% of its employees. A former employee described the layoffs as "chaotic". When Siemiatkowski posted a list of the fired employees on LinkedIn, several users described his post as "tone deaf". [63]
Block, Inc. is a U.S. public company founded by Jack Dorsey and Jim McKelvey in 2009. It is a financial technology conglomerate, reportedly serving 56 million users and 4 million businesses, with an annual payment processing volume of US$228 billion as of 2023.
Stripe, Inc. is an Irish-American multinational financial services and software as a service (SaaS) company dual-headquartered in South San Francisco, California, United States and Dublin, Ireland. The company primarily offers payment-processing software and application programming interfaces for e-commerce websites and mobile applications.
NerdWallet is an American personal finance company, founded in 2009 by Tim Chen and Jacob Gibson. It has a website and app that earns money by promoting financial products to its users.
SoFi Technologies, Inc. is an American online personal finance company and online bank. Based in San Francisco, SoFi provides financial products including student loan refinancing, mortgages, personal loans, credit card, investing, and banking through both mobile app and desktop interfaces.
Robinhood Markets, Inc. is an American financial services company headquartered in Menlo Park, California. It operates an electronic trading platform that facilitates commission-free trades of stocks, exchange-traded funds and cryptocurrencies as well as individual retirement accounts via a mobile app introduced in March 2015. Robinhood is a FINRA-regulated broker-dealer, registered with the U.S. Securities and Exchange Commission, and is a member of the Securities Investor Protection Corporation. The company's revenue comes from three main sources: interest earned on customers' cash balances, selling order information to high-frequency traders and margin lending. As of December 2023, Robinhood had 23.4 million funded accounts and 10.9 million monthly active users. In April 2022, Robinhood rolled out a cryptocurrency wallet to more than 2 million users.
Paytm is an Indian multinational financial technology company, that specializes in digital payments and financial services, based in Noida, India. Paytm was founded in 2010 by Vijay Shekhar Sharma under One97 Communications. The company offers mobile payment services to consumers and enables merchants to receive payments through QR code payment, Payment Soundbox, Android-based-payment terminal, and online payment gateway. In partnership with financial institutions, Paytm also offers financial services such as microcredit and buy now, pay later to its consumers and merchants.
Ant Group, formerly known as Ant Financial, is an affiliate company of the Chinese conglomerate Alibaba Group. The group owns the world's largest mobile (digital) payment platform Alipay, which serves over 1.3 billion users and 80 million merchants, with total payment volume (TPV) reaching CN¥118 trillion in June 2020. It is the second largest financial services corporation in the world, behind Visa. In March 2019, The Wall Street Journal reported that Ant's flagship Tianhong Yu'e Bao money-market fund was the largest in the world, with over 588 million users, or more than a third of China's population, contributing cash to it.
Revolut is a global neobank and financial technology company that offers banking services for retail customers and businesses. Headquartered in London, it was founded in 2015 by Nikolay Storonsky and Vlad Yatsenko. It offers products including banking services, currency exchange, debit and credit cards virtual cards, Apple Pay, interest-bearing "vaults", personal loans and BNPL, stock trading, crypto, commodities, human resources and other services.
Financial technology is an industry composed of companies that use technology to offer financial services. These companies operate in insurance, asset management and payment, and numerous other industries. FinTech has emerged as a relatively new industry in India in the past few years. The Indian market has witnessed massive investments in various sectors adopting FinTech, which has been driven partly by the robust and effective government reforms that are pushing the country towards a digital economy. It has also been aided by the growing internet and smartphone penetration, leading to the adoption of digital technologies and the rise of FinTech in the country
PhonePe is an Indian multinational digital payments and financial services company headquartered in Bengaluru, Karnataka, India. PhonePe was founded in December 2015, by Sameer Nigam, Rahul Chari and Burzin Engineer. The PhonePe app, based on the Unified Payments Interface (UPI), went live in August 2016.
Plaid is a financial services company based in San Francisco, California. The company builds a data transfer network that powers fintech and digital finance products.
Nium is a Singapore-headquartered cross-border payments company. Initially founded by Prajit Nanu and Michael Bermingham, and launched as consumer-remittance platform Instarem in 2014. In 2016, the company introduced its B2B payments platform and rebranded as Nium in 2019, subsequently elevating Pratik Gandhi to co-founder in 2021.
Zeta is a next-gen banking tech company by founders Bhavin Turakhia and Ramki Gaddipati in 2015. The company provides credit and debit card issuer processing, BNPL, core banking and "mobile experiences". Zeta provides its products to banks and fintechs globally.
Curve is a payment card that aggregates multiple payment cards through its accompanying mobile app, allowing a user to make payments and withdrawals from a single card. It lets you "switch the bank card you paid with after each transaction is complete." Curve named this feature "Back in time".
Affirm Holdings, Inc. is an American public company founded by PayPal co-founder Max Levchin in 2012. It is a fintech company with a buy now, pay later service for online and in-store shopping. Affirm leads the U.S. buy now, pay later sector, reporting over 17 million users and US$20.2 billion annual GMV as of 2023.
Pine Labs is an Indian company that provides financing and retail transaction technology, founded in 1998. The company has a valuation of over US$5 billion.
CRED is an Indian fintech company, based in Bangalore. Founded in 2018 by Kunal Shah, it is a reward-based credit card payments app. Cred also lets users make house rent payments and provides short-term credit lines. Cred has received criticism for being overvalued and lacking a sound monetization strategy.
Current is a New York City-based financial services and software development company (FinTech). It provides mobile banking services through its partner bank, Choice Financial Group, Member FDIC.
Zilch Technology Ltd., known as Zilch, is a direct-to-consumer ad-subsidised payments network. Headquartered in London, Zilch combines payments and advertising to offer customers flexible payment solutions for online and in-store transactions, with the vision "to eliminate the cost of consumer credit. For good".