Klarna CEO defends business despite massive losses and layoffs
Sebastian Siemiatkowski, CEO Klarna has spoken out in defense of his business model and controversial industry “buy now, Pay later”.
Klarna allows consumers to buy items they may not be able afford right now. Klarna’s 150 million customers only pay a small upfront and then pay the remainder back later.
CNBC interviewed me about “The Changing Face of Television”Squawk Box EuropeOn Friday, the Swedish entrepreneur stated that BNPL was “superior” to credit card models. Accordingly, Klarna users have an outstanding balance on average of $50. Credit card users, however, typically have a balance on average of $5,000.
Siemiatkowski stated that his company is more resilient to recession than traditional credit card companies. The fintech posted a $748 million loss last year, and announced last month that it had made a profit of $1. laying off around 10% of its 6,500 staffIn an effort to lower costs
Klarna will also soon compete with them. AppleIn the BNPL industry after the iPhone maker announced this weekIt is. plans to enter the market with a new product called Apple Pay Later.
This makes BNPL players look like PayPal, AffirmKlarna and Klarna are in an awkward position. Apple is a $2 trillion business and world’s second-largest manufacturer of smartphones. This could lead to clients leaving such services. Affirm shares have fallen 17% this week due to the news.
Siemiatkowski spoke out about Apple’s entry to the market, saying that “It’s a final massive embracement for what I consider a far healthier form of credit.”