Klarna cuts 10% of its workforce and causes the split payment market to worry


After growing rapidly during the health crisis, split payment is now on the decline. Klarna has announced the loss of 700 jobs and the near future does not look bright for players in the sector.

The party is over in the split payment market. The Swedish fintech Klarna, a world reference in the field, announced at the beginning of the week the elimination of approximately 10% of its workforce worldwide, or 700 jobs. To justify this decision, the boss of the company, Sebastian Siemiatkowski, put forward “a tragic and unnecessary war, a change in consumer sentiment, a sharp rise in inflation, a very volatile stock market and a probable recession”in a message sent to employees.

This cut in the workforce contrasts with the euphoria that still reigned on the market in 2021. Last year, Klarna had also made an impression by completing a funding round of 639 million dollars which had propelled its valuation to 46 billion. Things have changed a lot since then.

A lower valuation in the event of new fundraising?

If the Swedish fintech is currently seeking to raise an additional $1 billion, this new operation would be based on a valuation of $30 billion, or nearly 30% less compared to the previous valuation, according to the wall street journal.

Klarna is not the only player in the sector to experience difficult times. Affirm, one of its competitors, has seen its market capitalization drop by 75% since the start of the year. It now stands at $7.2 billion.

The horizon is darkening for split payment players

The prospects for the split payment market are no longer as bright as during the health crisis, when the strong growth of e-commerce directly fueled that of the sector. In addition, the rise in key rates, which will increase the cost of small loans, and the greater reluctance of investors due to an uncertain economic climate and the fall in technology stocks in recent months, will not help matters. of Klarna et al.

As the latter are very cash-hungry to finance their development, investors are also likely to question the viability of their economic model and their ability to be profitable. For now, Klarna is far from the mark with operating losses of $748 million in 2021, compared to $150 million in 2020.

To date, the company claims to have 147 million buyers and 400,000 merchant partners worldwide. In France, where it landed in June 2021, Klarna claims 1.3 million active users in France and 2,200 partner merchants.



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