- Klarna has grown rapidly over the past year, which has helped boost its user base and gross merchandise volume (GMV), but it has racked up losses along the way.
- Despite losses of over 300%, Klarna’s GMV grew 42% year-over-year and reached 147 million active consumers.
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By the numbers: Sweden-based Klarna, buy now, pay later (BNPL) reported a 42% year-over-year (YoY) increase in gross merchandise volume (GMV) for 2021. GMV growth slowed slightly from 2020s 46% year-over-year increase.
Klarna’s active consumer base reached 147 million in 2021, up from 87 million the previous year.
BNPL’s losses swelled by around 304% year-on-year in 2021 from 50% year-on-year in 2020, according to Insider Intelligence calculations.
How we got here: Klarna grew rapidly over the past year, which helped boost its user base and GMV, but it racked up losses along the way.
- Klarna entered five new markets in 2021, including France. It has also increased its presence in major markets such as the UK, opening a new office in London and the construction of its Manchester site. The expansion helped Klarna reach new customers, but likely contributed to its losses.
- He also embarked on a wave of acquisitions. Business takeover – retail technology company herodiscount shopping platform stockardand influencer marketing startup APPRL— let Klarna improve its merchant offerings and drive customer engagement.
Overview: BNPL suppliers adopt divergent strategies to grow and compete.
- Acquisitions. On Sunday, Australian company BNPL Zip agreed to to acquire US-based Sezzle in AUD$491 ($368.5m) deal – advancing Zip’s global position acquisition frenzy. And earlier this year, titan Block payments (formerly Square) bought Afterpay, the Australian BNPL giant. Consolidation can help incumbents minimize competition, build capacity and expand their global footprint.
- Partnerships. In 2020, many BNPL companies focused on creating partnerships with large retail brands to increase their visibility and attract users. In 2021, there has been a greater focus on creating partnerships with major payment providers: last year, Sezzle associates with Discover, both zipper and After-payment entered into agreements with Adyen and Affirm attached with Verifone. These partnerships help vendors distribute their solutions to a wider base of merchants and customers.
- Great apps. BNPL players love Klarna, To assert, and PayPal (which offers interest-free installments) have launched cool apps to become one-stop shops for purchases and payments. This could help increase app engagement and user spend.
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