Klarna Returns to Profitability and Sees Growth in the US
Global payments giant Klarna has made a remarkable turnaround after a challenging year in 2022. Despite facing triple losses in the first half of last year, resulting in an overall loss of $1 billion and a reduced valuation, Klarna has now achieved profitability in the first half of 2023. Furthermore, the company has significantly reduced its second-quarter losses by 76% compared to the same period last year, from €320 million to €76 million.
Formerly known as a ‘buy now, pay later’ giant, Klarna has repositioned itself as an ‘AI-powered payments network and shopping assistant.’ This strategic pivot has proven successful, with a 17% year-over-year increase in revenue in Q2. The company’s retail revenue also saw significant growth, expanding by 23% as new partnerships, including Airbnb and Selfridges, joined the platform.
Klarna CEO Sebastian Siemiatkowski expressed his confidence in the company’s business model and its ability to weather economic challenges, stating, ‘Today’s results clearly rebut the misconceptions around Klarna’s business model, evidencing that it is incredibly agile and sustainable as we support our healthy consumer base in making sound financial decisions. Despite the volatile environment, we have done exactly what we set out to do.’
Klarna has been focused on the US market, and this emphasis has paid off with three consecutive quarters of gross profit. Siemiatkowski mentioned on X/Twitter that the company is on track to achieve $100 million in revenue within a year. Additionally, Klarna has embraced artificial intelligence, adopting OpenAI’s API for 2,500 of its employees and deploying ChatGPT Enterprise. Siemiatkowski has been a strong advocate of ChatGPT, and Klarna developed a plugin with the platform earlier this year to enhance its capabilities as a shopping assistant and overall company performance.