By
Tolu Ajiboye
February 9th, 2024
Klarna now has over 90 million active users spread across more than 17 countries and processes 2 million transactions daily.
Swedish fintech company Klarna has reported a geometric increase in the transaction volume being conducted via its platform. This was included in the report for the April-June quarter. Reportedly, this happened as the platform now has 20 million users in the United States. This is significant growth from the 17 million users it had in April 2021, and 9 million users just over 15 months ago.
The company which is yet to be listed on the stock market saw its gross merchandise volume grow from $12 billion to $20 billion in about a year.
Klarna and Growing Transaction Volume on Its Platform
Klarna is one of the largest providers of the “buy-now-pay-later” service made popular since the COVID-19 pandemic. It sells itself as an alternative to credit cards, allowing individuals to shop online from its merchant partners and make payments in installments. These merchant partners number up to 7,500 retailers and include Amazon, Nike, and Sephora.
Klarna has two interest-free payment plans allowing users to pay up for your purchase in four equal payments spread across six weeks or within 30days. For larger purchases, it offers paid financing options in the form of a credit facility to you with payback lasting between 6-36 months. It makes its money by charging merchants a particular fee for every transaction completed by a a customer. In return, merchants that use the service often experience an increase in their sales.
The company had in June raised $639 million in a funding drive led by SoftBank. This brought the company valuation to about $45.6 billion, and effectively cemented the company’s status as Europe’s fintech unicorn. It also made it the second-biggest fintech start-up valuation with Stripe topping the chart.
According to the just-released quarter report, Klarna enjoyed growth in all its key markets including France, Germany, Spain, and the United States. This is despite regulatory concerns in certain countries like the United Kingdom. The U.K government had declared that the BNPL industry would enjoy increased scrutiny and stricter regulations from the country’s Financial Conduct Authority (FCA) for stricter regulation.
In response to the regulatory clampdown, Klarna CEO and co-founder Sebastian Siemiatkowski stated:
“We’re on the right side of this… There’s a lot of misconceptions in the UK but when we get the chance to sit down with UK politicians, they get convinced and then they switch sides.”
Klarna now has over 90 million active users spread across more than 17 countries and processes 2 million transactions daily. The company, which competes with Affirm and Afterpay is pursuing a public listing on the stock market. This should happen later in the year or 2022.