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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, Inc.|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.<ref>{{Cite web |last=Son |first=Hugh |date=24 January 2024 |title=Klarna to debut $7.99 monthly plan as buy now, pay later firm seeks new revenue sources ahead of IPO |url=https://www.cnbc.com/2024/01/24/klarna-to-debut-7point99-monthly-plan-ahead-of-ipo.html |access-date=24 January 2024 |website=CNBC |language=en}}</ref><ref>{{Cite web |last=Woodward |first=Kevin |title=Eye on BNPL: Klarna Debuts a Subscription Service; PublicSquare Enlists Credova |url=https://www.digitaltransactions.net/eye-on-bnpl-klarna-debuts-a-subscription-service-public-square-enlists-credova-for-bnpl/ |access-date=24 January 2024 |website=Digital Transactions |language=en-US}}</ref><ref>{{Cite web |last=Forristal |first=Lauren |date=24 January 2024 |title=Klarna introduces $7.99 'Klarna Plus' subscription plan as it approaches an IPO |url=https://techcrunch.com/2024/01/24/klarna-introduces-7-99-klarna-plus-subscription-plan-as-it-approaches-an-ipo/ |access-date=24 January 2024 |website=TechCrunch |language=en-US}}</ref>
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, Inc.|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.<ref>{{Cite web |last=Son |first=Hugh |date=24 January 2024 |title=Klarna to debut $7.99 monthly plan as buy now, pay later firm seeks new revenue sources ahead of IPO |url=https://www.cnbc.com/2024/01/24/klarna-to-debut-7point99-monthly-plan-ahead-of-ipo.html |access-date=24 January 2024 |website=CNBC |language=en}}</ref><ref>{{Cite web |last=Woodward |first=Kevin |title=Eye on BNPL: Klarna Debuts a Subscription Service; PublicSquare Enlists Credova |url=https://www.digitaltransactions.net/eye-on-bnpl-klarna-debuts-a-subscription-service-public-square-enlists-credova-for-bnpl/ |access-date=24 January 2024 |website=Digital Transactions |language=en-US}}</ref><ref>{{Cite web |last=Forristal |first=Lauren |date=24 January 2024 |title=Klarna introduces $7.99 'Klarna Plus' subscription plan as it approaches an IPO |url=https://techcrunch.com/2024/01/24/klarna-introduces-7-99-klarna-plus-subscription-plan-as-it-approaches-an-ipo/ |access-date=24 January 2024 |website=TechCrunch |language=en-US}}</ref>


In Feb of 2024, Klarna announced that AI replaced 700 employees at the company, about 10% of the workforce at the time.<ref>{{cite web | last=Karlsson | first=Johannes | title=Klarnas vd: AI-assistent ska lyfta vinsten med 400 mkr i år | website=Dagens industri | date=2024-02-27 | url=https://www.di.se/digital/klarnas-vd-ai-assistent-ska-lyfta-vinsten-med-400-mkr-i-ar/ | language=sv | access-date=2024-02-27}}</ref><ref>{{cite web | last=Zara | first=Christopher | title=Klarna says its OpenAI virtual assistant does the work of 700 humans | website=Fast Company | date=2024-02-27 | url=https://www.fastcompany.com/91039401/klarna-ai-virtual-assistant-does-the-work-of-700-humans-after-layoffs | access-date=2024-02-27}}</ref>
In Feb of 2024, Klarna announced that [[artificial intelligence|AI]] replaced 700 employees at the company, about 10% of the workforce at the time.<ref>{{cite web | last=Karlsson | first=Johannes | title=Klarnas vd: AI-assistent ska lyfta vinsten med 400 mkr i år | website=Dagens industri | date=2024-02-27 | url=https://www.di.se/digital/klarnas-vd-ai-assistent-ska-lyfta-vinsten-med-400-mkr-i-ar/ | language=sv | access-date=2024-02-27}}</ref><ref>{{cite web | last=Zara | first=Christopher | title=Klarna says its OpenAI virtual assistant does the work of 700 humans | website=Fast Company | date=2024-02-27 | url=https://www.fastcompany.com/91039401/klarna-ai-virtual-assistant-does-the-work-of-700-humans-after-layoffs | access-date=2024-02-27}}</ref>


== Controversy ==
== Controversy ==

Revision as of 17:39, 27 February 2024

Klarna
Company typePrivate
IndustryFinance
Founded2005; 19 years ago (2005)
Founders
  • Sebastian Siemiatkowski
  • Niklas Adalberth
  • Victor Jacobsson
HeadquartersStockholm, Sweden
Key people
RevenueUS$1.9 billion (2022)
Total assetsUS$11.9 billion (2022)
Total equityUS$1.2 billion (2022)
Number of employees
5,441 (2022)
Websiteklarna.com
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, 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]

History

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 [de] 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 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.[26] This funding round valued the company at $5.5 billion, making Klarna the largest fintech start-up in Europe.[27] In 2020, Klarna acquired Nuji, a marketplace for fashion and lifestyle goods.[28]

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.[29]

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.[30]

In November 2021, Klarna launched its physical card, which enabled users to make purchases in interest-free installments. [31] In January 2022, Klarna launched their physical card in the UK. [32] The card had a wait list of 400,000 users as of January 2022.[33]

In March 2022, Klarna acquired PriceRunner, a company that provides price comparisons on products.[34]

In May 2022, Klarna laid off roughly 10% of its workforce.[35][36]

In June 2022, Klarna announced a partnership deal with card issuer Marqeta to bring physical Visa cards to the US.[37]

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.[38] 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 [es; de].[39]

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.[40]

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.[41][42][43]

In Feb of 2024, Klarna announced that AI replaced 700 employees at the company, about 10% of the workforce at the time.[44][45]

Controversy

Regulation

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.[46] In February 2021, the UK Government announced that the sector would be subject to regulation from the UK's Financial Conduct Authority.[47]

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.[48] 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."[49]

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.[50][51]

Privacy

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.[52]

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. [53]

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.[54][55]

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.[56][57][58] The company stated that its fraud checks and controls are as strict as those of banks.[57]

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.[59][60]

Layoffs

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".[61]

See also

References

  1. ^ a b "Klarna Bank AB 2022 Annual Report" (PDF) (pdf). Klarna. Archived (PDF) from the original on 28 February 2023. Retrieved 28 February 2023.
  2. ^ Milne, Richard (1 December 2020). "Michael Moritz named chairman of Swedish fintech Klarna". Financial Times. Archived from the original on 14 July 2022. Retrieved 14 July 2022.
  3. ^ a b "About us". Klarna US. Archived from the original on 1 March 2021. Retrieved 27 September 2021.
  4. ^ Milne, Richard (5 March 2013). "A Swedish take on 'buy now, pay later'". Financial Times. Archived from the original on 27 September 2021. Retrieved 27 September 2021.
  5. ^ "E-barometern". Archived from the original on 7 August 2011. Retrieved 22 August 2011.
  6. ^ "Klarna's valuation crashes to under $7bn in tough funding round". Financial Times. 11 July 2022. Archived from the original on 11 July 2022. Retrieved 11 July 2022.
  7. ^ "Klarna sees its value slashed by 85% in latest round of fundraising". the Guardian. 11 July 2022. Archived from the original on 26 November 2022. Retrieved 26 November 2022.
  8. ^ a b Mukherjee, Supantha (11 July 2022). "Klarna raises $800 million as valuation plunges 85% in a year". Reuters. Archived from the original on 26 November 2022. Retrieved 26 November 2022.
  9. ^ "Sebastian Siemiatkowski". Forbes. Archived from the original on 26 November 2022. Retrieved 26 November 2022.
  10. ^ Stothard, Michael (13 July 2021). "Klarna: everything you need to know before you use it". Sifted EU. Archived from the original on 27 September 2021. Retrieved 27 September 2021.
  11. ^ Graham, August (2 February 2021). "Klarna – the pay later giant and Europe's biggest private fintech". Yahoo Finance. Archived from the original on 27 September 2021. Retrieved 27 September 2021.
  12. ^ Montén, Ellen (23 May 2016). "The story of how a complete coincidence led to the creation of the $2 billion fintech startup Klarna". Business Insider Nordic. Archived from the original on 20 December 2016. Retrieved 18 December 2016.
  13. ^ "Interview: from Burger King to boardroom, how Klarna became". Whiteboard. Archived from the original on 12 March 2018. Retrieved 18 December 2016.
  14. ^ Bernet, Magnus (18 March 2016). "Börs: Öresund och Creades säljer samtliga aktier i Klarna". Analysguiden (in Swedish). Aktiespararna. SIX News. Archived from the original on 27 September 2021. Retrieved 27 September 2021.
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  17. ^ "Start-Up 100: A-Z". Telegraph.co.uk. 5 April 2011. Archived from the original on 28 February 2021. Retrieved 8 April 2016.
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  25. ^ Olsson Jeffery, Miriam (24 April 2015). "Damberg om Sveriges fem enhörningar" [Damberg about Sweden's five unicorns]. Svenska Dagbladet. Archived from the original on 24 April 2016. Retrieved 15 April 2016.
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  28. ^ "Nuji | Designer Fashion & Homeware from the best online stores". Nuji. Archived from the original on 2 August 2020. Retrieved 13 July 2020.
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  34. ^ Cameron, Isabel (4 April 2022). "Klarna completes acquisition of PriceRunner –". Latest Retail Technology News From Across The Globe – Charged. Archived from the original on 7 July 2023. Retrieved 4 April 2022.
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  37. ^ PYMNTS (1 June 2022). "Klarna Intros Physical Visa Card With Marqeta". www.pymnts.com. Archived from the original on 1 June 2022. Retrieved 2 June 2022.
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  39. ^ Pina Alzugaray, Monica (20 September 2022). "Klarna lanza sus depositos y cuenta de ahorro en Raisin.es". Raisin (in Spanish). Retrieved 21 February 2024.
  40. ^ Forristal, Lauren (19 October 2022). "Klarna launches new creator features and shoppable video". TechCrunch. Archived from the original on 19 October 2022. Retrieved 19 October 2022.
  41. ^ Son, Hugh (24 January 2024). "Klarna to debut $7.99 monthly plan as buy now, pay later firm seeks new revenue sources ahead of IPO". CNBC. Retrieved 24 January 2024.
  42. ^ Woodward, Kevin. "Eye on BNPL: Klarna Debuts a Subscription Service; PublicSquare Enlists Credova". Digital Transactions. Retrieved 24 January 2024.
  43. ^ Forristal, Lauren (24 January 2024). "Klarna introduces $7.99 'Klarna Plus' subscription plan as it approaches an IPO". TechCrunch. Retrieved 24 January 2024.
  44. ^ Karlsson, Johannes (27 February 2024). "Klarnas vd: AI-assistent ska lyfta vinsten med 400 mkr i år". Dagens industri (in Swedish). Retrieved 27 February 2024.
  45. ^ Zara, Christopher (27 February 2024). "Klarna says its OpenAI virtual assistant does the work of 700 humans". Fast Company. Retrieved 27 February 2024.
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  48. ^ Carolina Neurath (1 April 2014). "Large number of complaints regarding invoices from Klarna". Svenska Dagbladet. Archived from the original on 1 May 2015. Retrieved 20 November 2021.
  49. ^ Niklas Adalberth of Klarna at Arctic15. ArcticStartup. 25 February 2013. 31 minutes in. Archived from the original on 20 November 2021. Retrieved 20 November 2021.
  50. ^ "Amtsgericht Bremerhaven vom 11. Januar 2022, 51 C 1062/21". OpenJur 2022,2608 (in German). Archived from the original on 7 March 2023. Retrieved 13 February 2022.
  51. ^ "Gerichtsurteil: Sind Mahngebühren bei Klarna zulässig?". WZ Waltroper Zeitung (in German). Archived from the original on 13 February 2022. Retrieved 13 February 2022.
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  57. ^ a b "'Criminals love buy now, pay later': How fraudsters exploit popular interest-free payment plans". CNBC. 18 November 2021. Archived from the original on 22 February 2022. Retrieved 22 February 2022.
  58. ^ "Maksufirma Klarnan kautta pystyy tilaamaan tavaraa toisen nimiin – MOT:n testi osoittaa, kuinka pahasti ruotsalaisyhtiön tietoturva vuotaa". Yle.fi (in Finnish). 13 July 2021. Archived from the original on 20 February 2022. Retrieved 20 February 2022.
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  60. ^ "Administrative fine against Klarna after investigation". 31 March 2022. Archived from the original on 25 May 2022. Retrieved 13 May 2022.
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