(Bloomberg) — The value of transactions enabled by Klarna Bank AB’s payment options rose 42% to $80 billion in 2021, as the company’s U.S. expansion continues to boost demand.
Europe’s most valuable startup reported total net operating income of 13.75 billion Swedish kronor ($1.46 billion), up 38% from 2020, according to an emailed statement Monday. The firm said it now carries out around 2 million transactions a day and acquisitions mean it has more than 147 million global active users.
The U.S. continues to be Klarna’s fastest growing market, propelled by a 71% annual growth in U.S. consumers to 25 million. Klarna said it now partners with 30 of the top 100 U.S. retail brands.
The company is targeting half a billion users over the next few years, Sebastian Siemiatkowski, chief executive officer and co-founder, said in a phone interview. Although Europe and North America remain the priority, Klarna is considering Asian and South American expansion.
“We’re adding a lot of new markets,” he said. “Every market that we’ve added so far, we’ve seen tremendous interest in growth.”
But along with growth came credit losses almost doubling to 4.6 billion Swedish kronor ($487 million), up from 2.5 billion kronor in 2020, according to the company’s annual report. The rise was “a direct result of our expansion and the increased volume of new consumers, rather than a deterioration of the portfolio,” Klarna said in an investor presentation.
Klarna said about 40% of its transaction volume is now via its ‘Pay Now’ option, instead of the buy now, pay later feature it pioneered that allows customers to spread the cost with installments.
Ukraine Conflict
Siemiatkowski said Klarna currently had no consumers situated in Ukraine or Russia, but the company was following the situation closely.
“There’s tons of internal discussions on different supporting actions,” said Siemiatkowski, whose grandparents lived through invasions of Poland by Nazi Germany and the Soviet Union and whose parents emigrated to Sweden in the early 1980s.
“I’m extremely concerned and worried,” he said. “Not from an angle of Klarna, but just from democracy and the democratic countries in the world.”
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