Klarna saw losses skyrocket throughout what it called a “record second quarter” as its expanded rapidly across the US in preparation for an expected IPO.
The Swedish ‘buy now, pay later’ giant, which has now been loss making since 2019, said that operating losses grew a whopping 155 per cent from SEK 690 million (£57 million) in 2020 to SEK 1.76 billion (£147 million).
It assured investors that its credit losses often increased when it entered new markets and the share of new consumers increases, reporting a rise in credit losses from SEK 1.19 billion (£99.5 million) to SEK 1.85 billion (£154 million) during the period.
“If you’re a small bank you’ll have small losses, if you’re a big bank you can have bigger losses,” Klarna’s chief executive Sebastian Siemiatkowski told the Financial Times.
“At the same point of time that we’re growing this bank at a fast pace, then you’re going to have more losses as you’re going to have more revenues and volume.”
The bank’s relative relaxation regarding its losses makes sense, as Klarna saw GMV (gross merchandise volumes) jump from $12 billion (£8.73 billion) to $20 billion (£14.55 billion) in the second quarter.
This growth was spearheaded by a huge growth across the US, seeing GMV jump 311 per cent in the first half of 2022 and seeing 20 million Americans now use its service, up from 17 million in April 2021.
It also said that it now has 90 million global active users who make around 2 million transactions per day, having launched in France, New Zealand and Poland during the period.
Klarna’s focus on expansion has driven fresh speculation about a possible public listing, after it announced last week that it was considering an IPO.
It is understood that its chief executive Siemiatkowski could be considering listing in London, stating that it would give the bank the opportunity to write better regulations for the financial sector post-Brexit.