Last month Klarna celebrated its 10 year anniversary in the UK, with the buy now pay later (BNPL) company preparing to IPO next year.
Sebastian Siemiatkowski, Niklas Adalberth and Victor Jacobsson founded the company in 2005 in Stockholm. The company has seen immense success over that time, but it has not been a smooth road.
Today Klarna would arguably be a household name, but let's take a look at some of the top stories which marked their journey to getting there.
- Klarna and Arcadia let online shoppers buy now, pay later
Klarna entered into an agreement with then retail clothing giant Arcadia Group, who ran brands like Topshop, Miss Selfridge, and Debenhams. The Arcadia Group went into administration in 2020, but some of those brands which they sold off, like Topshop, can
still be purchased using Klarna on their new owners ASOS.
Although this move came two years after Klarna moved into the market, Arcadia Group had dominated the British retail high street at the time, giving them significant exposure.
- Visa invests in Klarna
Visa bought a stake in Klarna in 2017, giving the then newcomer a significant boost.
Siemiatkowski commented at the time: "Partnering with Visa will give us the opportunity to strengthen our global presence and product portfolio by leveraging our combined assets. We are excited about the possibilities of what we can do together."
- Klarna welcomes Snoop Dogg as new shareholder
Rap legend Snoop Dogg became a shareholder and the face of some of the brand's adverts. Snoop Dogg is no stranger to investment, but this would not be the only notable publicity moment by Klarna.
Later in 2021, American rapper
A$AP Rocky became Klarna’s CEO for the day and also in 2021, they would use a
bus to educate the British public on influencer advertisements.
- Klarna reaches $10.65 billion valuation on $650m funding round
Klarna continued to grow in 2020 despite the Covid pandemic. This valuation made Klarna one of the highest valued private fintechs in Europe.
This valuation came after a year where Klarna had launched in
Australia, acquired Italian BNPL firm
Moneymour, and
partnered with Raisin for open savings accounts in Germany.
- Klarna rapped by UK watchdog over Covid credit promotion
Despite their positive year in 2020, the company was not without upset. In December 2020, the UK's Advertising Standard Authority banned an Instagram influencer campaign for Klarna that encouraged people to use credit to 'boost their mood' during the pandemic.
- Klarna confirms mammoth $1 billion fund raise
The Swedish company saw their valuation rise to $31 billion at the beginning of 2021 following a four times oversubscribed funding round, resulting in $1 billion raised. BNPL was experiencing a worldwide boom, and Klarna was not left out.
- Klarna reports $1 billion loss
Despite their success in 2020 and 2021, 2022 saw the BNPL company reporting $1 billion in losses, 47% more than in 2021.
During the course of 2022, Klarna let go
10% of their staff. The crunch on their books was attributed to the Russian invasion of Ukraine and the economic downturn.
Siemiatkowski said at the time: "We’ve had a few years now where growth has been really heavily prioritised by investors. Now, understandably, they want to see profitability."
- Klarna lays groundwork for IPO
Despite the struggles through 2022, 2023 saw the company gearing itself up for an IPO by setting up a UK holding company. At the time, it was reported we could see their IPO in 2023, but this has yet to happen.
At the same time as this, Klarna managed to avoid a strike at its UK headquarters.
- Klarna to use AI to halve workforce
In 2024, Klarna started to become vocal about their reported success in their workforce using AI. The BNPL company reported they saw a 27% revenue rise in the first half of 2024, in part because of their AI use, leading Siemiatkowski to say they could halve
their workforce.
Earlier in 2024, they said their OpenAI powered chatbots were doing the equivalent of
700 full-time humans. I
spoke with Martin Elwin, Klarna’s head of AI about how generative AI was impacting their workforce.
- Klarna lines up banks for 2025 IPO
Finally, midway through 2024, Klarna started lining up financial advisors for a US IPO. According to the FT, Goldman Sachs, JP Morgan Chase and Morgan Stanley were vying for this listing.
2025 may prove to be an interesting year for Klarna, as they are anticipated to launch their IPO in both the UK and the US.