Klarna sees losses balloon after expansion

Klarna paid the price for its widespread expansion after it watched its losses soar in its fourth quarter of 2021.

The fintech giant reported net losses of $470 million compared with the $77.6 million in the same period in 2020.

“We are now serving more than 100m active customers across the world,” chief executive Sebastian Siemiatkowski said.

“On a percentage basis, we’re also seeing much lower losses per transaction volume.”

Klarna, which was valued at $46 billion last year, said that the losses were “entirely explained by Klarna’s growth, expansion to new markets and massive inflow of new customers”.

READ MORE: Klarna launches UK rewards programme

The Swedish-based company said that it saw a 70% year-on-year increase in active customers to 147 million in 2021.

Revenues rose 31 per cent to $411.5 million in the fourth quarter.

Klarna gives consumers the ability to stretch payments over interest-free instalments and also offers a number of other short-term interest-free credit options.

The buy now, pay later (BNPL) sector soared during the pandemic, with analysts believing that the UK market doubled in value to reach £5.7 billion in 2021.

There have been whispers of an upcoming initial public offering (IPO) however they have yet to be confirmed, with Siemiatkowski claiming that the current state of the market makes him “nervous” about listing, especially in the UK.

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