Klarna scraps off its open banking brand - Klarna Kosma

Klarna, a Swedish buy now, pay later (BNPL) giant is scrapping off its open banking brand - Klarna Kosma. This comes less than 18 months since its launch.

Klarna Kosma’s closure

The Swedish BNPL giant, Klarna launched Klarna Kosma in April 2022 as a brand and business unit and represented a “major strategic move”. The brand has been offering fintechs, financial institutions and merchants with connectivity to build FS apps and services. Through one API, it has been able to offer straightforward and secure access to 15,000 banks in 24 countries. It also encompassed other products like account-to-account payments.

Klarna has indicated that the decision to ditch the brand is a marketing move. It has not resulted in any job cuts and the business will now be part of the broader Klarna corporate brand.

Klarna’s solid outlook

In May, Klarna indicated that it expects to return to profitability between August and September 2023. For the period between 2020 and 2021, the BNPL giant focused on growth. It has since shifted its focus to profitability via enhanced services and cost-cutting measures.

In April, S&P Global gave the company a credit rating of BBB/A-3 with a solid outlook. This was a sign of its “ability to defend its robust e-commerce position in its key markets, rebuild profitability and maintain a strong capital buffer”.

Besides, its net losses in the last three months of 2022 were at 1.9 billion Swedish kronor compared to 4.6 billion kronor during a similar period in the previous year. Granted, the quarterly results showed that it recorded its largest annual loss in 2022. Indeed, the tough period saw its valuation drop by 85% to $6.7 billion in addition to significant job cuts.