Swedish buy-now-pay-later startup Klarna reported nearly $1B (10.4B kroner) in full-year operating losses in 2022.
The figure represents Klarna's highest annual losses yet, 46.5% more than 2021's losses of ~$680M (7.1B kroner). Despite the widened losses, Klarna — Europe's most valuable VC-backed company — expects to return to profitability by the third quarter of this year.
- Klarna was profitable until 2019, when it started pursuing aggressive expansion in the U.S.
- Since last December, the U.S. region has been the company's largest revenue market, with over 34 million registered users. It still expects to continue driving growth in the U.S.
- The BNPL sector witnessed a slump in 2022 as users retreated amidst rising cutthroat competition, inflationary pressures, interest rates, and regulatory headwinds.
- As a result, Klarna's valuation dropped 85.3% in the year from its peak of $46B to $6.7B.
- Klarna resorted to layoffs in a bid to cut losses and shifted focus from growth to profitability.
- The fintech startup has raised $4.5B in total funding to date and is backed by Sequoia Capital, Silver Lake, Mubadala, and Canada Pension Plan Investment Board.