The founder of Klarna has likened the scale of his ambition to that of Elon Musk while hinting that he would favour listing his booming credit business in the US rather than Europe.
In a pre-recorded interview for The Times and The Sunday Times Tech Summit today, Sebastian Siemiatkowski, set out how he wanted to do for retail banking what the Tesla founder was doing in automobiles.
“We’re in the midst of trying to disrupt the massive retail banking space, which is worth a couple of trillion dollars, similar to what Elon has done in respect of the car industry,” he said.
But that was not going to happen overnight, he said, which was why it was important Klarna had supportive, patient long-term investors. They were more likely to be found in the US, he suggested.
“I do think the appreciation and willingness to value companies that are long term versus companies that focus on quarterly returns is different and seems to be maybe stronger in the US market,” he said.
Advertisement
Siemiatkowski, 40, has built Klarna, which offers “buy now, pay later” (BNPL) credit, into a business with 90 million customrs including 15 million in the UK. In a capital-raising led by SoftBank this summer, it was valued at $45.6 billion, making it one of the most valuable privately owned tech-enabled businesses, or unicorns, in Europe.
He applauded the longer-term focus of investors which has led to colossal valuations for sometimes quite small and lossmaking businesses today. “I think it’s healthy, I think it is good for society, I think it is good for the world.”
Siemiatkowski also said it had been “a mistake” for Klarna to focus so much on its “buy now, pay later” offering in the UK, one of its biggest markets. “If you look at Klarna in Europe half of our volume is ‘pay now’, so people pay immediately the full amount rather than buy now, pay later. But in the UK we started with the ‘buy now, pay later’ product and that’s what we are mostly associated with.”
The “buy now, pay later” services offered by Klarna and rivals like Clearpay, Laybuy and Openpay have started to make a dent credit card use. “If ten years from now, less people use credit cards and more people use debit cards but occasionally use BNPL to solve specific problems, I think that’s a better place,” he said.
He conceded that Klarna had made mistakes in the past. Debt charities have accused the industry of failing to make clear to borrowers they were entering credit agreements, while the Financial Conduct Authority is preparing to regulate the industry in the UK.
Advertisement
Klarna is launching a new browser expansion for British customers today so that those shopping via a desktop PC are offered the same full service as those using smartphones.
In March Siemiatkowski said he expected to float in “one to two years”.
