Klarna shows that BNPL growth is not cheap – Marketingwithanoy

The tech world has been touch busy the past few days so forgive me for missing Klarna dropping its 2021 financial results last week. We will remedy that inattention today.

Klarna is an interesting company. It is incredibly well funded, richly valued and despite remaining a private company, it regularly reports its earnings. This means we can see how it performs and learn a lot about the larger buy now, pay later (BNPL) market that is inundated with startup activity and venture dollars.

The Exchange explores startups, markets and money.

Read it every morning on Marketingwithanoy+ or get The Exchange’s newsletter every Saturday.

In other words, the mega-unicorn offers us a window into a market filled with smaller companies yearning for both niche and mass-market BNPL adoption.

And what does Klarna’s revenue tell us? Two things: first, that the BNPL market continues to grow, with consumers eager to transact more and more with the spending model. And second, that growth in BNPL land is not cheap; Klarna’s operating costs are increasing rapidly and the company’s profitability is suffering.

Let’s talk about it!

Inside’s Klarna’s 2021

In 2021, Klarna had sales (“total net operating income”) of SEK 13.75 billion, resulting in an operating loss of SEK 6.58 billion and a net loss of SEK 7.09 billion. In U.S. dollars at current exchange rates, these numbers translate into revenue of $1.375 billion, an operating loss of $658 million and a net loss of $709 million.

Klarna had booked a turnover result of 10.0 billion kronor in 2020 and a net loss of 1.376 billion krone. So Klarna grew about 36% in sales last year, but net losses multiplied by about 5.

Leave a comment