Klarna CEO touts ‘solid’ US sales as fintech targets listing
KLARNA Bank, one of the largest providers of buy now, pay later services around the world, said US consumers are not showing signs of pulling back on their spending even in the face of high prices and borrowing costs.
The Stockholm-based fintech – which partners with over half of the top 100 retailers in the US – is doubling down on its business in the US and now expects that division to hit US$1 billion in revenue “pretty soon”, chief executive officer Sebastian Siemiatkowski said in an interview with Bloomberg Television.
The firm is enjoying “solid sales in the US”, Siemiatkowski said. “In 2019, our US business was non-existent, today it’s the largest part of our business both in revenue and number of customers.”
His comments come even as some investors fret that US consumers have spent through much of the savings they amassed during the pandemic, leaving them to finance their purchases with credit cards and other forms of debt.
A string of recent earnings results have shown Americans are pulling back on travel and deferring big home renovations, with retailers from Home Depot to Wayfair signalling a weakening spending environment. A bullish report from Walmart added to concerns that consumers are increasingly hunting for bargains when they shop for necessities.
Still, some data shows US consumers are holding up. US retail sales accelerated in July by the most since early 2023, Commerce Department data showed on Thursday (Aug 15).
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Klarna earlier this week said it was adding retail-banking services in the US and across much of Europe, expanding beyond its signature buy-now, pay-later offering as the fintech prepares for an initial public offering in the US.
The move will mean Klarna has to rely less on outside banks and payment networks like Visa and Mastercard, Siemiatkowski said. That should help Klarna shave down its payment costs and improve its cost of funding, he said.
Klarna has previously considered seeking a valuation of around US$20 billion in its upcoming listing in the US, Bloomberg News reported earlier this year.
While that would be an increase from the US$6.7 billion valuation it received in a 2022 funding round, it is a far cry from the US$45.6 billion valuation it received from investors before rising interest rates forced them to reconsider backing online lending platforms. BLOOMBERG
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