Klarna CEO Sebastian Siemiatkowski spoke at a fintech event in London on Monday, April 4, 2022.
Chris Ratcliffe | Bloomberg by NebraskaDailyNews
LONDON – After 20 years as CEO of Krana, Sebastian Siemiatkowski is about to face his toughest test as the fintech company prepares for its debut in New York.
Siemiatkowski, 43, co-founded Klarna in 2005 with Swedish entrepreneurs Niklas Adalberth and Victor Jacobsson, with the aim of having traditional banks and credit card companies with more user-friendly online payment experience along with traditional banks and credit card companies.
Today, Klarna is synonymous with “buy now, pay later” – a payment method that allows people to purchase items and postpone payments until the end of the month, or pay off their purchases through a series of equal, interest-free monthly installments.
But while Siemiatkowski has developed Klarna into a fintech powerhouse, his entrepreneurial journey is not without challenges – from rising competition with Paypal in the face of Paypal, to a 85% drop in valuation.
Still, Siemiatkowski didn’t take on these challenges, and the outspoken co-founder wasn’t shy to challenge criticism until the IPO, which could value it at $15 billion.
“Crazy enough”
In October 2024, NebraskaDailyNews met with Siamiatkowski during a Swedish entrepreneur visit to London. For a businessman facing a roller coaster who faced a roller coaster during his two-year position as CEO, Krana’s head had a calm air for him.
“Independent of all the cycles and everything we went through with the company, any time I asked myself, I still think Krana could be the next one Google’s size, we can be a multi-billion dollar market company, or a trillion dollars,” Siemiatkowski told NebraskaDailyNews. “I’m still crazy and thought it could be achieved. ”
Klarna, once a popular era darling, worth $46 billion, has a valuation that fell 85% to $6.7 billion in 2022 as rising inflation and rising interest rates have slumped investor sentiment to high-growth technology companies.
But the company’s attempt to rebuild erodes value in the years that followed.
In addition to earning income from interest financing plans and advertising revenue, Klarna mainly makes money from IT charging fees for providing payment services.
Financials disclosed in its IPO filing that Klarna reported revenue last year was $2.8 billion, up 24% year-on-year, and net profit was $21 million, up from a net loss of $244 million in 2023.
Optimistic about AI
After the launch of OpenAI’s generalized AI ChatGPT in November 2022, Siemiatkowski quickly pivoted Klarna’s focus to embracing the technology, and especially in a way that could slash costs and enhance the firm’s profitability.
However, Siemiatkowski’s strategy and his comments on AI have also caused controversy.
Klarna has faced a freeze in 2023 when it looks like it will tighten costs. The following year, the company said its AI chatbot was Working in 700 full-time customer service jobs.
Klarna’s CEO later said in August that his company was able to reduce its overall workforce from 5,000 to 3,800, partly because it has applied AI in areas such as marketing and customer service.
He told Reuters News Agency that he added that due to the loss rather than layoffs, he added: “By not hiring at all… the company is getting smaller and smaller.”
NebraskaDailyNews asked him about AI and The frustration they causeSiemiatkowski suggested he “apologize” in response to Mark Zuckerberg’s comments about the chief executive.20 years of mistake“Responsible for the issues that he thinks his company should not be blamed.
Siemiatkowski doubled up, adding that AI “can do a lot of work that people do today – but I don’t want to be one of the tech leaders on the stage, saying, “Don’t worry, there will be new jobs because I don’t know what these new jobs are.” ”
“I just want to be transparent and honest about what I think is happening, and I would rather feel open to it because I know these people, tech leaders say when they are not in the public stage, and they are not saying the exact same thing,” he told NebraskaDailyNews in October.
The outspoken CEO
Siemiatkowski is no stranger to defending his criticism, especially when Klarna’s business model challenges short-term financing on everything from clothing to online takeaway.
Last week, Krana announced a partnership with Doordash Its flexible payment methods are available on the US Food Delivery app. However, the move has been objected by Internet users, who say it has the potential to make struggling consumers pay more debt.
A X user Posted a meme Show personal finance expert Dave Ramsey’s title: “You mean you have $11,000 of ‘Doordash debt’.”
Siemiatkowski Go to X In defending the move, it is said that Krana “provides many payment methods”, including the ability to pay immediately or postpone payments until the end of the month, in addition to monthly installments.
“Doordash offers a lot of products!” Klarna’s boss responded to the criticism on X. “I know we’re known for our 4-point salary. But you can also use a credit card on Doordash.”
In 2022, the outspoken entrepreneur stressed that his company was “superior” and “extremely recession” after the company abandoned 10% of its workforce.
As Klarna approaches the stock market debut, investors may take a closer look at his track record and whether he remains the right person to lead the company for a long time.
Lena Hackelöer, CEO of Stockholm-based Fintech startup Brite Payments, is a man who works under the leadership of Siemiatkowski, who worked for the company for seven years between 2010 and 2017, working in various marketing functions.
She expressed admiration for Klarna’s co-founder and delayed the proposal to advise leadership not to dominate business in a pandemic era.
“I never thought about how they were already mismanaged, and that’s how they reported it,” Hackelöer told NebraskaDailyNews in a November interview. “I think they’re just focusing on growth because that’s the direction that investors give.”
Roller Coaster Riding
Siemiatkowski admits that the journey to build Krana is not always optimistic.
Asked about the biggest challenge he faces as CEO, Siemiatkowski said for him, in 2022, Klarna’s workforce is the toughest thing he has ever done.
“It’s very difficult because I don’t predict that investor sentiment will change, people will go from evaluating companies like ours and then going to a company that’s so low,” he said.
“It’s obviously difficult because you’ll realize, ‘Well, s —, I’m going to have to make changes. Go on, go on, I need to protect consumers, they are stakeholders of the companies, employees, investors, I need (I need (I need (I need (I) what I do right to all voters,” Siemiatkowski, “Go on.”
Klarna is synonymous with the “buy now, pay later” trend, which is to make purchases and postpone payments until the end of the month or pay free monthly installments.
Nikolas Kokovlis | Parenting | NebraskaDailyNews
“But unfortunately, this will affect smaller groups, which happens to be 10% of our employees.”
Like other tech companies, Klarna grew significantly during the pandemic on the 19th. The company increased its total value of its total merchandise sales or all sales processed through its platform in 2020 46% year-on-year was $53 billion.
I think anyone who is a little sensible, that’s not something you’re lit, right? This was a difficult decision. It makes you cry. I cried.
Sebastian Siemiatkowski
CEO of Krana
The company also landed hundreds of new employees to capitalize on and expand opportunities for wider acceleration in adoption of e-commerce adoption from government lockdowns on consumer behavior and the then wider acceleration of adoption of e-commerce adoption.
“I think anyone who is a little sane, that’s not an easy thing for you, right?” Krana’s CEO said, referring to layoffs. “It’s a tough decision. It makes you cry. I’m crying.”
However, Siemiatkowski insisted on his decision to fire the workers: “I feel that I have an obligation to the voters, everyone, all stakeholders, the company, and I think it was a necessary decision at the time.”
The road to IPO
Now, Klarna’s CEO faces his biggest test to date – he co-founded his business in public two years ago.
“IPOs are risky for companies because the stock price can fluctuate quickly,” Nalin Patel, director of EMEA Private Capital Research at PitchBook, told NebraskaDailyNews via email. “They can also arrange costly and lengthy attitudes with investment banks.”
Krana earlier this month Submitted its prospectus to be listed on the New York Stock Exchange. The company has not yet determined when it will go public and has not priced stocks.
If successful, the result could pop up the net assets of Simiatkovsky and other shareholders, including Sequoia Capital, Silver Lake, Mubadala Investment Company and the Canadian Pension Plan Investment Commission.
Sequoia is a single shareholder of Klarna, owning 22% of the shares. Siemiatkowski is the second largest, with 7% of its business.
Positive IPO results will also increase the value of shares of Krana employees and potentially boost morale after a few years of turbulence for the company.
“This is finding a balance of fair value for existing investors looking to cash out and new investors seeking shares at fair prices. Overvaluation of the company could lead to a decline in its valuation in the future. While undervalued this funding, it could mean that the money on the table has been left on the table, but the exiting people.”
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