BNPL giant Klarna announced that its losses have tripled in the first six months of 2022, reporting losses of $581M. Its revenue rose by 24% over the same period.

Why should we care?
Klarna’s CEO, Sebastian Siemiatkowski, seemed unwilling to take responsibility for Klarna’s shifting fortunes, mentioning investor demands as the main reason for the BNPL platform’s concerning balance sheet. “We’ve had a few years now where growth has been really heavily prioritized by investors,” he said. “Now, understandably, they want to see profitability.” As chief executive, Siemiatkowski did have the agency to prepare for a downturn and anticipate a change in investor priorities, but didn’t do so. Instead, the Sweden-based fintech has had to cut 10% of its staff and scramble to scrap its rapid-expansion strategies, hoping to recover from its tanked valuation, which now stands at $6.7B, down from $45.6B a year ago. Despite this sudden pivot, Klarna continued to emphasize growth in its earnings report, suggesting it hasn’t fully learned to prioritize profit over growth; it eyes the US as a promising opportunity for eventual profit, with volumes increasing there 109% year-over-year, with 30 million users. The US market remains a loss leader, but established markets like Germany and Sweden remain profitable, suggesting Klarna could do well sticking to its European guns, rather than gambling on new markets—as well as its own future.