Klarna: Strong Growth Driven by Credit Offers
The Swedish payment FinTech Klarna valued at more than 2.7 billion dollars reports strong global growth in sales volume and aims for further developments in 2018. They achieved 4.53 billion Swedish krona (551 million dollars) in total operating revenues, with net earnings of 346 million (42 million dollars). These figures confirm their expertise in both consumer credit and online payment services.
Klarna’s double-digit growth is driven by increased adoption of their services by retailers. They now have 89,000 merchant customers and more than 19 million new users: +20% year over year.
This development is also owned to their deferred payment service for in-store purchases. Use levels for their “Pay Later” app increased five-fold in 2017. Klarna claims that one in three shoppers now opt for this option when available at checkout. This led UK participating merchants to record a 20% increase in annual purchase frequency. Klarna also proposes a credit feature called “Slice It”, allowing customers to spread the cost of their purchases over time (interest rates apply).
This FinTech is already established in 14 countries, and is particularly popular in Germany, as well as in the Nordic countries. They also pursue high ambitions as they want to win the US market.
Comments – Klarna: a neo-banking player in the making
Swedish payment FinTechs keep expanding their reach throughout Europe. Bambora, for instance, was bought out by Ingenico. And Klarna added Visa and Permira to their shareholders a few months ago. These partnerships allowed the Stockholm-based start-up to aim for brick-and-mortar retail outlets and expand their range of products. They have also been granted a banking licence which helped them scale up and introduce even more services, especially credit offers.
Klarna’s encouraging results for 2017 can in fact be accounted for by a surge in the European e-commerce sector, as well as by the interest paid in the payment facilities they have been making available to their end users. Merchants enjoy payment guarantees and Klarna also promises increased conversion rates.
Through relying on their banking licence, the Swedish FinTech also plans to issue credit cards and propose deposit accounts. They would even consider launching some banking services, including mortgage offers.