Klarna’s Losses Double Amid Rising US Consumer Strain
Hey FinTech Fanatic!
Swedish BNPL giant Klarna reported a Q1 net loss of $99M, more than double last year’s $47M, as loan defaults surged, a red flag tied to weakening U.S. consumer health.
Credit losses reached $136 million (up 17% YoY), driven by declining consumer confidence and macroeconomic pressure, including Trump-era trade tensions that have fueled inflation fears. Klarna’s deep U.S. push, via partnerships with Walmart, DoorDash, and eBay, now exposes it to American economic risks, prompting the FinTech to pause its planned NY IPO.
Still, Klarna is leaning into flexibility: “83% of our loan book refreshes within three months,” the company said, allowing it to react swiftly to market shifts.
Despite the loss, revenues rose 13% year-over-year (YoY) to $701 million, with 99 million active users. Klarna also cut costs by investing heavily in AI, even using an AI-generated avatar as its CEO to present earnings. Over the past two years, it has reduced headcount by 39%, with customer service costs down 12% year-over-year.
However, rising funding costs (+15% YoY to $130M) remain a concern as Klarna navigates rapid growth amid economic turbulence.
Read more global FinTech industry updates below 👇 and I'll be back with more tomorrow!
Cheers,
P.S.: Before diving into today's news, I wanted to highlight a great opportunity for FinTech Marketeers: Mollie, one of the most exciting FinTechs (and my neighbors here in Amsterdam), is hiring. I can highly recommend applying here. You'll be in great hands with Jacqueline Rutgers 😉
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PAYMENTS NEWS
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DIGITAL BANKING NEWS
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BLOCKCHAIN/CRYPTO NEWS
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PARTNERSHIPS
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DONEDEAL FUNDING NEWS
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M&A
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