Sweden's Klarna dips to first loss after US expansion | Financial News – London South East


By Colm Fulton

STOCKHOLM, Feb 26 (Reuters) – Swedish online lender Klarna,
which is backed by rapper Snoop Dogg, reported its first annual
loss on Wednesday after a year of expansion in the United States
and Europe.

This is the first year in which Klarna has posted a loss
since it was set-up in 2005, making it an outlier among tech
companies which often lose money for years.

Klarna, which was Europe’s most richly valued financial
technology company until it was matched by British banking app
Revolut, launched a U.S. shopping app in 2019 and opened a tech
hub in Berlin, which employs 500 staff.

The company, which links up customers with retailers like
H&M and ASOS through its online lending
platform, said it now adds a new merchant every seven minutes.

Klarna’s 2019 operating loss was 1.1 billion Swedish crowns
($113 million), against a 160 million profit for 2018 for the
‘buy now, pay later’ digital bank.

The loss was due to investment, particularly in the United
States, and were flagged to investors when Klarna raised $460
million in August, spokeswoman Aoife Houlihan said.

“We aren’t worried at all by these results,” Houlihan added.

Klarna was Europe’s most richly valued financial technology,
or fintech, company until this week, when British banking app
Revolut raised fresh funds on Tuesday, matching the Swedish
company’s $5.5 billion valuation.

European fintechs have attracted 20% of venture capital
funding over the last three years, more than any other
technology sector, technology analysis site dealroom.co says.

Despite the loss, Klarna increased its operating revenue by
31% to 7.6 billion crowns. It said its app was downloaded 9
times more in the final quarter of 2019 than in the first
quarter of 2018, as it grows its customer base.
($1 = 9.7253 Swedish crowns)

(Reporting by Colm Fulton;
Editing by Alexander Smith)



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