In a letter to shareholders, CEO Sebastian Siemiatkowski says the firm has been “operating in a very different environment” in the first half of 2022 as it faced up to the fallout from Russia’s invasion of Ukraine, the economic downturn and a “huge shift in investor sentiment”.
First half revenue was $950 million, up 24% on H1 2021, driven largely by growth in the US. However, net losses for the period were $581 million, compared to $141 million the previous year.
The firm says the losses were caused by rising defaults on borrowing and the cost of integrating recently acquired price comparison site PriceRunner.
Employee costs also rose. In May, the company said it would cut 10% of staff but the effect of this has not yet been seen.
Klarna rode the BNPL wave during the pandemic, hitting a $46 billion valuation last summer, before crashing down this year, forced to raise funds at huge discount.
Writes Siemiatkowski: “We’ve had a few years now where growth has been really heavily prioritised by investors. Now, understandably, they want to see profitability.”,