Klarna has posted its first quarterly profit in four years as it makes an “early step” towards an eventual IPO.
The Swedish buy now, pay later giant’s third-quarter profits reached SEK 90m in the three months to the end of September, up from a loss of SEK 2.1bn in the same period a year earlier.
Credit losses at the fintech almost halved to SEK 800m and its quarterly revenues increased by 30% to SEK 6bn.
It comes after news emerged that Klarna is in the process of setting up a UK holding company, in what the company told Sky News is an “early step on a journey towards an eventual IPO”.
At the fintech’s last trading update in August, CEO Sebastian Siemiatkowski said the company had reached its three criteria for being ready to list: establishing the business in the US; achieving a sustainable business model; and significant growth potential.
It’s a sharp turn of fate for the fintech, which has been cutting costs to get on top of losses. Klarna lost its crown as Europe’s most valuable private tech company after an 85% valuation drop last year. It also made two rounds of staff cuts, cutting more than 700 jobs.
In the last month, Klarna has also made two rounds of “outsourcing” of its customer services and operations staff to other companies, according to company documents seen by Sifted.
Klarna last posted a full-year profit in 2018.