Buy now pay later (BNPL) firm Klarna has seen its net losses almost quadruple after it has been beset by a raft of challenges including high credit losses.
According to Finextra, the company saw the losses climb in the first half of this year which were also driven by increased employee costs and investment in market expansion.
Klarna CEO Sebastian Siemiatkowski said in a letter to shareholders that the firm has been ‘operating in a very different environment’ in the first half of this year following the fallout from Russia’s invasion of Ukraine, the economic downturn and a ‘huge shift in investor sentiment’.
The company’s first half revenue was $852m, up 24% on the first half of last year – driven largely by US growth. Net losses, however, were $581m – up from $141m in 2021.
Klarna said the losses were caused by rising credit losses and the cost of integrating recently acquired price comparison site PriceRunner.
In May, the Klarna said it would cut 10% of staff due to rising employee costs, however, the effect of this has not been seen yet.
Siemiatkowski added, “We’ve had a few years now where growth has been really heavily prioritised by investors. Now, understandably, they want to see profitability.”
Klarna recently launched a new feature for UK consumers that will let them see their full online order history, regardless of whether they are purchased using Klarna.
The feature extends its all-in-one shopping app with automatic purchase history and delivery tracking for all online orders
It hopes the feature will help UK consumers save time and manage their online purchases more conveniently by automatically consolidating crucial purchase information in the Klarna app.
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