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Klarna’s profits driven by growth in Nordics and Germany

Klarna, one of Europe’s most highly valued fintech companies, reported a big jump in profits and sales last year as the online payments group had strong growth in the Nordics and Germany. 

The Swedish group posted a 27 per cent enhance in revenues to SKr4.53bn ($546m) whereas web revenue greater than tripled to SKr346m. Klarna processed about €18bn in on-line transactions final yr, a rise of 42 per cent. 

The group supplies payment products for transport and media firms in addition to more and more retailers by giving clients the choice of paying after they obtain their items in addition to taking over the credit score danger. 

Valued at $2.25bn in 2015, Klarna final June grew to become the most important European fintech to receive a banking licence with its chief government saying the corporate needed to reshape retail banking in the identical means that Ryanair had shaken up the aviation sector. 

Klarna has plenty of high-profile traders together with enterprise capital teams Sequoia Capital and Atomico in addition to Visa and personal fairness home Permira. 

The Swedish firm has made a giant push into the US and UK however progress has been sluggish in what are extremely aggressive markets. Revenues for international locations outdoors the Nordics, Germany, Austria and Switzerland elevated from SKr145m in 2016 to SKr186m final yr. 

Klarna has partnered with Asos, Topshop and JD Sports activities within the UK and Microsoft within the US as a part of its efforts to increase outdoors its northern European stronghold.

Folks near Klarna say that the corporate noticed particularly good progress on the finish of the yr due to Black Friday and Christmas however that these don’t present up in final yr’s outcomes. 

The rise in Klarna’s web revenue was flattered by a drop in provisions to do with VAT reclassification in Sweden. In 2016, the provisions minimize SKr166m from web revenue whereas they diminished it by solely SKr66m final yr. Internet revenue elevated about 50 per cent stripping out the impact of the provisions. 

Klarna plans to make use of its banking licence to supply merchandise akin to playing cards and wage accounts to its 60m clients however not mortgages or saving merchandise. 

The imaginative and prescient of Sebastian Siemiatkowski, its chief government and co-founder, is of a gaggle of fintechs difficult banks globally in particular areas akin to funds. He instructed the Monetary Occasions final yr: “We’re nonetheless transferring on the pace of a fintech, however present the belief and safety of a financial institution. That makes us an excellent uncommon animal.”

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