Klarna sees its losses quadruple despite BNPL surge

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Klarna has seen its losses quadruple despite the buy now, pay later sector’s boom, as costs increased sharply.

The Swedish fintech leader posted a pre-tax loss of 3.1 billion Swedish krona ($344 million) from January to September, a fourfold increase from the 800 million krona it lost in the same period a year ago.

The company was last valued privately at $46 billion, reported net operating income of 9.8 billion krona, up 40 per cent from last year.

The majority of the losses came from general administrative expenses, the company said, which amounted to 9.5 billion krona, up by 5.9 billion krona year-on-year.

Credit losses rose by a substantial amount, totalling 2.9 billion krona year-to-date.

READ MORE: Klarna reveals plans to release a physical Klarna Card

The BNPL provider has entered nine new markets since the start of last year according to CNBC.

“Each market entry follows a consistent financial trajectory; as volumes grow, and more customers use Klarna, market knowledge improves and credit risk decreases, making mature markets sustainably profitable,” a spokesperson said in an emailed statement.

The BNPL sector has seen a surge in demand over the past 18 months, thanks to the acceleration in ecommerce that was fuelled mainly by the pandemic.

Klarna has around 90 million users worldwide and competes with the likes of PayPal, Square, Apple and Affirm and Square.

It has aggressively expanded into the US and the UK of recent, controlling around 18 per cent of the American market.

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