No more growth-at-all-costs mentality. Klarna still isn’t generating profits. It suffered a pre-tax loss of about SEK 6.2 billion ($722.2 million) in H1, nearly triple H1 2021’s losses. But Klarna’s struggle to turn a profit isn’t necessarily cause for alarm: It boasts a growing engaged customer base that suggests it has no trouble attracting users. Losses were partly fueled by its aggressive growth. But Klarna knows it needs to get its finances in better shape: It laid off 10% of staff, about 700 people, in May.
Klarna raised money, but its valuation plummeted. Klarna raised $800 million at a $6.7 billion valuation in July, a sharp drop from the $46 billion high it reached in June 2021. The funding haul highlighted Klarna’s ability to raise cash to fuel growth, but also laid bare the harsher funding picture. Intensifying competition among BNPL firms and incoming regulation in the UK and US also likely contributed to Klarna’s lower valuation.
Dive deeper: Check out our US Buy Now, Pay Later Feature Demand Report 2022 for analysis on the 49 BNPL features that consumers want most.
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