Sebastian Siemiatkowski is aiming to make Klarna one of the world’s big five fintech companies in its field.

“I think that few companies have such a great position to become one of the five future big ones in this space as we do,” he said.

Part of the success, Siemiatkowski says, is down to an “island-centric” company restructuring.

The Swedish buy-now-pay-later fintech company is certainly on a roll. This week, after a new $460m fundraising, the company has a post-money valuation of $5.5bn, making it the most valued private fintech companies in Europe.

That is a 250% increase in valuation since the beginning of this year, and now Klarna is starting to win over the US too. After four years in the US market — some of which have been a struggle — Klarna is now growing at approximately half a million customers a month, says Siemiatkowski.

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What is Klarna’s secret?

“There are so many things under the hood, that not necessarily are fully understood around the world, that is giving us massive advantages to really provide more value than anyone else to our customers,” Siemiatkowski says.

One example is the data collected from each transaction. Every time a consumer makes a purchase not just the amount but also the actual item is stored by the company.

“There is no other payments company out there, or Neo bank, that has access to that amount of data. That data itself allows us to provide much more value in terms of services to our customers.”

The US has in the past been heavy on credit cards and was therefore seen as a difficult market for non-card fintech companies, such as Klarna. This was also how the slow growth in the US was explained by most on-lookers.

“People have been telling us exactly that and to some degree, even I started believing them,” Siemiatkowski tells Sifted.

There is no other payments company out there, or Neo bank, that has access to that amount of data

Whilst the management at Klarna wanted to offer the UK and the US special products the team in London was of a different opinion. They were convinced that the original products of Klarna would work well in these markets. In the end, the numbers have proven them right.

“There has been a massive amount of demographic shifts in the UK and in the US the last ten years that we were unaware of. Although credit card volume has grown about twice, debit card volume has grown tenfold and 70% of millennials in the US do not have a credit card, they only have a debit card,” Siemiatkowski says.

70% of millennials in the US do not have a credit card, they only have a debit card

Siemiatkowski also believes better performance is down to a recent change in organisational structure — less top-down and more isolated islands of employees, similar to how Jeff Bezos organised Amazon many years ago.

“I think it was totally necessary and crucial. One of the most important aspects was true decentralization. And we would not have accomplished what we’ve seen the last six months without it,” Siemiatkowski says.

Staying ahead of the competition

Klarna is not the only European fintech to be trying its luck in the US — Monzo and N26 are also entering the market. But Siemiatkowski is less worried about the competition from the other Neo banks than he is interested in taking market shares from the local traditional banks.

“The size of this industry is about a trillion-dollar, it’s obscenely big and we are just seeing the transformation happening. It’s really the legacy banks that are going to see the competition, and for the neo banks, I think most of them will be successful to some degree.”

Many have argued that the new funding rounds will push Klarna either towards an IPO or a buyout within the next three years. Siemiatkowski tells Sifted that whatever happens, he believes that Klarna can continue on its own.

“For 14 years in a row, we have proven our ability to actually be a profitable company and that we have the fundamentals in place to be a standalone business.”

The size of this industry is about a trillion-dollar, it’s obscenely big and we are just seeing the transformation happening

But according to Siemiatkowski, more work needs to be done at Klarna, both in-house on the organisation and to take more market shares.

Apart from the services with the pink Klarna card that more than a 100,000 already have and with the services that Klarna has been pushing out since it became a bank in 2017, more is on its way according to Siemiatkowski.

“The changes that we did in 2016 and 2017, are now starting to bear fruit. And we can see that the consumers really like them, like our consumer app in the US which is currently adding about a half a million users every month. But the fun thing is that the company culture is really transformed. And internally, we know that there are like 100 other features coming in the next six months.”

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