Klarna Seems To Have Cracked The US Market At Last

Klarna has been trying for a long time to break into the American market. It looks like it’s finally happening. The US is now its biggest source of revenue worldwide.

The Swedish BNPL powerhouse recorded a 71% YoY growth in gross merchandise value and 37% lower credit loss rates in the US.

In the US, the company now has 34 million customers, 8 million monthly active app users, and 30 million downloads.

Klarna thinks that it will start making money every month next year, even though its losses doubled in its most recent third quarter.

Klarna’s Q3 losses increased from $106 million in July to September to $200 million in July to September.

The income statement is hard to read because it comes after a year of painful restructuring, during which the firm’s value dropped and 10% of its staff was fired.

CEO Sebastian Siemiatkowski insists the firm has made “great progress” toward profitability, which they hope to hit on a monthly basis in the second half of 2023.

“We’re thrilled at the growth and momentum we’ve achieved in the US, and are confident in our path towards profitability.”

Klarna has changed its business model from one that only relies on credit to one that creates new shopping channels. These connect customers with merchants. So, the company’s marketing income is the one that is growing the fastest.

David Sandstrom, CMO of Klarna, says that in the US, almost half of the top retailers have teamed up with Klarna more for customer acquisition and marketing than for payments.

“At Klarna, we understand that in today’s fast-paced retail environment, simply offering consumers great products is no longer enough,” he says. “Retailers need partners to help them cut through the noise and connect with consumers in new, exciting ways. That’s where Klarna comes in.”