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Klarna reports first ever losses in 2019

Swedish ‘buy now pay later’ FinTech Klarna has seen red numbers for the first time ever, reporting operating income losses of SEK1.1 billion (£88 million) compared to a growth of SEK161 million (£13 million) in 2018.

The losses have been attributed to its expansion into UK and US markets and represent the 15-year-old company’s first time in the red.

The company also hit 7 million customers in the UK, with year-on-year global volumes and revenue increasing by 32 per cent and 31 per cent respectively while the volume processed now amounts to over SEK322 billion (£25.8 billion).

Last year the company entered an agreement to receive $300 million from the Sydney Commonwealth Bank (CBA) as part of its initiative to launch in Australia, which it completed in January this year, in exchange for a 5.5 per cent stake.

In a note to its shareholders, Sebastian Siemiatkowski, the CEO and Co-Founder of Klarna, said: “While we share many impressive business metrics in this report from 2019, the reality is Klarna must continually evolve, we cannot be complacent. By nature people are generally creatures of least resistance, we defer to the road most travelled, the path best paved.

“However, if we at Klarna want to deliver above the industry status quo, build a global brand and drive change in the paradigm of retail, payments and banking, we need to actively seek out complexity, dare to be different and set ourselves ambitious goals on the solutions we bring.

“We, therefore, will continue to make necessary investments in talent, products and the platform to further strengthen our capabilities across all markets and parallelity in execution,” he said.

Klarna, which is now the joint-largest FinTech in Europe, has partnerships with 200,000 merchants across 17 markets, including Asos, H&M and Expedia.

‘Buy now pay later’ services have become the fastest-growing online payment method in the UK, growing twice as quickly as bank transfers and more than three times the rate of annual growth in digital wallets, according to a global payment report from Worldpay.

The report also predicted that the UK’s eCommerce market is set to be worth £319.8 billion by 2023.

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