Klarna - Swedish born 'Buy Now, Pay Later' Giant

SME Fintech Opportunity in the Developing Countries

Klarna: Swedish born ‘Buy Now, Pay Later’ Giant by Sam Ghosh 4th February 2021
Klarna - Products and Channels Klarna - Growth Klarna - Finances
Klarna - The Company

Klarna - The Company Klarna - Products and Channels Klarna - Growth Klarna - Finances
Founding 2005 in Stockholm, Sweden
Valuation US$ 10.6 Billion as of September 2020
Business Consumer Credit, Merchant Solutions and Banking
Total Funds Raised US$ 2.1 Billion in 22 rounds
Annual Gross Merchandise
Volume
US$35 Billion in FY 2019 @1SEK=US$0.105
Net Operating Revenue US$753 million in FY 2019 @1SEK=US$0.105
Investors Sequoia Capital, Ant Group, Blackrock, Bonnier Ventures, Silver Lake, H&M, Merian Chrysalis, HMI Capital,
Northzone, TCV, Macy’s, etc.
Global Presence 17 Countries including Sweden, Norway, Finland, Denmark, Switzerland, Germany, Austria, the Netherlands,
Great Britain, and the USA.

Klarna - The Company: Founders
Victor Jacobsson
Co-founder
Stockholm School of Economics
Sebastian Siemiątkowski
Co-founder and CEO
Niklas Adalberth
Co-founder

Klarna - The Company: History
2005 2006-2008 2009

2010 2011 2012

2013 2014 2015

2016 2017 2018

2019 2020 Present Day

Klarna - The Company: Corporate Structure (2019)

Klarna - The Company: Corporate Structure (2019)
Qualified Shareholders
Funds advised by Sequoia Capital 22%
Brightfolk A/S 12%
Kool Investment LP 12%
Victor Jacobsson 11%
Board Members
Jon Kamaluddin, chairman of the Board
Sebastian Siemiątkowski, CEO and Board member
Andrew Young
Mikael Walther
Sarah McPhee
Sir Michael Moritz

Klarna - Products and Channels

Klarna - Products and Channels:
Products Channels
For
Consumers
Pay Later
Financing
Pay Now
For
Merchants
Banking
Klarna
Checkout
Express
Checkout
In-Store
Point of Sale
Savings
Accounts
Time Deposit
Klarna Apps Klarna Card
Loyalty
Program
Klarna.com

Klarna - Products and Channels: Products: for Consumers: Pay Later
Pay in 3
UK: Payment in 3 interest-free monthly installments. The first payment is
made at the point of purchase
Australia: 4 payments, paid every 2 weeks.
Pay in 4

Klarna - Products and Channels: Products: for Consumers: Pay Later..
Pay in X Days
UK: Payment in 30 Days. Interest-Free.

Klarna - Products and Channels: Products: for Consumers: Financing
Slice it
UK: Credit for 6-36 months. Interest payable.

Klarna - Products and Channels: Products: for Consumers: Pay Now
Pay Now
Germany: Payment using instant bank transfer (no registration), direct debit, or credit
cards.

Klarna - Products and Channels: Products: for Merchants: Klarna Checkout
Klarna Checkout
Austria: Klarna charges 1.99% + 0.35 EUR per transaction - no entry fee.

Klarna - Products and Channels: Products: for Merchants: Express Checkout
Klarna Instant Shopping: Express Checkout
Sweden: Instant Shopping is a buy button that enables checkout from anywhere with 2
clicks.
USA: Pricing

Klarna - Products and Channels: Products: for Merchants: In-Store
In-Store
Sweden: A payment link is sent to the customer via SMS, email, or by the customer
scanning a QR code with their mobile phone. The customer chooses payment options
and completes the purchase in the same way as with a regular online purchase.
Confirmation is sent to you and the customer, who can also see and manage the
purchase in the Klarna app.
USA Pricing: Transaction Fee: 0.30 USD + Variable fee up to 3.29%

Klarna - Products and Channels: Products: for Merchants: Point of Sale
Point of Sale
Sweden: Enables payment In-Store, Over the Phone, or on the run.

Klarna - Products and Channels: Products: Banking: Savings Accounts
Savings Accounts (Sweden)

Klarna - Products and Channels: Products: Banking: Time Deposit
Time Deposits (Germany)

Klarna - Products and Channels: Channels: Klarna Apps
Available for Android and Apple products.
14 million monthly active app users as of the
end of October 2020

Klarna - Products and Channels: Channels: Klarna Card
Klarna Card
Germany: VISA Network. Immediate direct debit or pay in 14 days.

Klarna - Products and Channels: Channels: Loyalty Program
Klarna Vibe
USA: Vibe is Klarna’s rewards club that lets you earn vibes when you shop
with Klarna. $1 spent equals 1 vibe.

Klarna - Growth

Klarna - Growth: Customer Acquisition
2020 Growth (Jan-Sep 2020)
End Customer ~90 million
Registered Merchant 200K+
Number of transaction
per day
1 million+
Presence 17 Countries
Market Share 10% of E-commerce Market Share in Northern Europe
End Customer Growth 21 million new customers globally
Registered Merchant 57K new retail partners.

Klarna - Growth: Customer Acquisition: Registered Merchants

Klarna - Growth: Gross Merchandise Volume (GMV)
2019 GMV 332 Billion Swedish Krona (US$35 Billion @1SEK=US$0.105)
2019 GMV Growth 32%
2020 GMV 330 Billion SEK or US$35 Billion (@1SEK=US$0.105) for the period January to September 2020
2020 GMV Growth 43% from the same period (Jan-Sep) in 2019.

Klarna - Growth: Reach: Klarna.com (Data: Similarweb)
Monthly Visits 21.7M in Dec 2020 (19.6M in Nov 2020, 16.9M in Oct 2020)
11.9M Unique Visitors in Dec 2020.
Device Share Desktop: 33%, Mobile: 67%
Marketing Channels Direct: 60.6%, Organic Search: 20.6%, Referrals: 11.3%..
Traffic Share by Country Germany: 37%, Sweden: 17%, United States: 12%, United Kingdom: 9%, Norway: 7%
Demography 66% of visitors are in the 18-45 age group. An equal share of male-female.

Klarna - Growth: Reach: Klarna | Shop now. Pay later Apple App Store: USA (Data: Similarweb)
Monthly Active Users 1.364 million in Dec 2020 up from 996K in Nov 2020.
Monthly Downloads 734.9K in Dec 2020 (718.5K in Nov 2020, 486.9K in Oct 2020)

Klarna - Growth: Reach: Klarna | Shop now. Pay later Google Play: USA (Data: Similarweb)
Monthly Active Users 1.096 million in Dec 2020. (219K daily active users)
Monthly Downloads 887K in Dec 2020 (1000K in Nov 2020, 789.1K in Oct 2020)

Klarna - Growth: Reach: Klarna | Point of Sale Google Play (Data: Similarweb)
Global Daily Active Users 59
Global Downloads 1.6K in Dec 2020

Klarna - Growth: Reach: Klarna Card
Cards Issued 500K out of which 30K issued in Jan-Sep 2020
Usage 2020 (Jan-Sep): volume growth of 174% through the Klarna card

Klarna - Growth: Reach: Klarna Loyalty Program Vibe
Members 500K as of November 2020

Klarna - Growth: Reach: Banking
Savings Accounts
(Sweden)
Launched in July 2020. 20K customers as of September 2020

Klarna - Finances

Klarna - Finances: Revenue (till 2019)
Klarna’s Net Operating Revenue grew by a CAGR of 29% during 2015-2019. 2019 Net Operating Revenue stood at US$753
million.
Klarna is actively expanding out of Europe especially in the USA - we can see that the revenue share of ‘Other’ locations is
increasing.

Klarna - Finances: Revenue (till 2019)
Klarna’s primary revenue sources are Interest Income from the consumers and Commission Income from the merchants.
In 2019, interest income constituted 37% and commission income 54% of net revenue. Interest income grew by 38% and
commission income grew by 32% respectively in 2019 from 2018.

Klarna - Finances: Net Income (till 2019)
Although the revenue of Klarna is growing rapidly, Klarna
recorded a net loss of more than US$90 million in 2019 -
the first time in its 15 years of operations.
The loss is attributed to the establishment of an engineering
hub in Berlin and expansion in the USA.

Klarna - Finances: 2020 (Jan-Sep) Compared to the same period in 2019
Net Operating Income saw a 37% YoY increase primarily driven by 42% growth in Commission Income which constitutes more
than 70% of the operating income.

Klarna - Finances: 2020 (Jan-Sep) Compared to the same period in 2019
While Net Operating Income grew 37% YoY, Operating Expenses and credit losses increased by 41% and 35% respectively
resulting in a 65% growth in operating losses.

Thank You
PS:
They have Snoop Dogg.
Disclaimer:
Some of the images used in this document are property of
Klarna Bank AB and used under the Fair Use doctrine.
Data provided and used here are from publicly available
sources. The author does not guarantee the accuracy of the
information mentioned in this document.
This document is not an investment prospectus and does not
constitute in any way advice for investment-related decisions.

Klarna - Swedish born 'Buy Now, Pay Later' Giant

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