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Klarna preps for IPO after narrowing losses

Buy now, pay later giant Klarna reports its fifth straight annual net loss while moving forward for an anticipated IPO later this year.

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Klarna preps for IPO after narrowing losses

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The Swedish firm reported a net loss of SKr2.5bn ($241mn) for 2023, narrower than its SKr10.4bn loss in 2022. Revenues rose 22 per cent to SKr23.5bn.

The bare figures mask an improving turnaround at Klarna, which booked its biggest ever year in terms of Gross Merchandise Value, while at the same time improving adjusted operating result by 95% over the year.

Klarna now manages 2.5M transactions per day. This adds up to a 22% increase in revenue, to Skr23.5B for the year.

Sebastian Siemiatkowski, CEO of Klarna, says the firm made a conscious decision to invest in growth in the peak shopping season of Q4 as it continues its quest for annual profitability.

"Our GMV was in touching distance of Skr1 trillion and we saw a 95% improvement in adjusted operating result. We celebrated our first month and then first quarter of profitability in four years, and in the US we delivered Skr1.4B gross profit propelling the entire business forward. November followed as our most successful sales month ever, with GMV surpassing SEK 100 billion and exceeding the total for all of 2015."

The US, now Klarna’s largest market by revenue, delivered Skr1.4B gross profit and 2023 was the first full year of gross profit in the US since Klarna entered the market in 2015.

Siemiatkowski says cost efficiencies drove a "massive improvement" in operating results. The firm managed to cuts 31% of costs from its sales and marketing activities after letting go of 1200 staff during 2023.

Siemiatkowski in January said that it was "very likely" that Klarna will launch a stock market listing in the US "quite soon". Bloomberg is reporting that the company is pressing ahead with plans at a valuation of $20 billion, more than half of the $46 billion price tag it attracted at the height of the fintech boom years in 2021.

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