Klarna appears to have finally cracked the US market

The Swedish BNPL giant has reported strong momentum in the US, with a 71% YoY increase in gross merchandise value, while improving credit loss rates by 37%.

The firm now counts 34 million consumers in the US, 8 million monthly active app users and 30 million downloads.

Klarna is forecasting that it will hit profitability on a monthly basis next year despite a doubling of losses in its most recent third quarter.

Klarna’s Q3 losses climbed to $200 million from July to September, compared to $106 million in the comparable period last year.

The income statement makes for stark reading, coming after a year of painful restructuring which has seen the firm’s valuation slashed and the enforced sacking of 10% of staff.

Despite the numbers, CEO Sebastian Siemiatkowski maintains an upbeat tone, insisting the firm has made “huge progress” towards hitting profitability “which we expect to hit on a monthly basis in the second half of 2023”.

“We’re thrilled at the growth and momentum we’ve achieved in the US, and are confident in our path towards profitability,”

Klarna has moved to diversify its business from one which relies solely on credit to the creation of new shopping channels linking customers to merchants. As a result, the firm’s marketing revenue is its fastest growing earner.

In the US, almost half of its top retailers have partnered with Klarna for consumer acquisition and marketing than for payments, says David Sandstrom, CMO, Klarna.

“At Klarna, we understand that in today’s fast-paced retail environment, simply offering consumers great products is no longer enough,” he says. “Retailers need partners to help them cut through the noise and connect with consumers in new, exciting ways. That’s where Klarna comes in.”