It wasn’t that long ago when Swedish buy now, pay later (BNPL) giant Klarna was on top of the world. In June of 2021, the company was valued at a staggering $45.6 billion, and following a $639 million fundraise, it had become the largest fintech in the European market.
In 2022, Klarna’s outlook isn’t quite so rosy. After shedding 10% of its workforce in May, it has taken another major blow in the form of a massive downgrade in its value, most recently being valuated at $6.5 billion, less than 15% of its high water mark.
According to the company’s Founder and Chief Executive Officer, Sebastian Siemiatkowski, Klarna’s recent fortunes are due to a number of factors beyond leadership’s control. “When we set our business plans for 2022 in the autumn of last year, it was a very different world than the one we are in today. Since then, we have seen a tragic and unnecessary war in Ukraine unfold, a shift in consumer sentiment, a steep increase in inflation, a highly volatile stock market, and a likely recession.”
In keeping with its reputation as a disruptor, Klarna is not giving up despite this setback. Indeed, the company has plans to rebuild, starting with another $600 million round of fundraising that it plans to complete with investors Sequoia Capital and Mubadala.
