Klarna plunged to the biggest annual loss in the Swedish “buy now, pay later” company’s history, but claimed it was on track to return to profit as it cut credit losses at the end of the year.
The privately held Swedish fintech, whose valuation was slashed from $46bn in 2021 to $6.7bn in June 2022, made an annual net loss of SKr10.4bn ($1bn), a 47 per cent increase compared with 2021.
But in the fourth quarter, it more than halved its net losses from SKr4.6bn a year earlier to SKr1.9bn in 2022. Credit losses were SKr1.4bn in the fourth quarter, an improvement of 18 per cent on the same period in 2021.
“We are making concrete progress towards profitability, simultaneously driving growth well ahead of ecommerce and reducing credit losses and costs,” said Sebastian Siemiatkowski, Klarna’s chief executive.
Klarna became a symbol of the exuberance of the fintech boom, becoming Europe’s highest valued private company as online shopping boomed during the Covid-19 pandemic, before it was humbled by an 85 per cent cut in its valuation and a 10 per cent reduction of its workforce.
Siemiatkowski told the Financial Times in November that he expected the company to start making profits again by August or September this year, although he warned it could make a full-year loss in 2023. It last made an annual profit in 2018, a quarterly profit in the second quarter of 2019 and a monthly profit in August 2020.