Klarna thrives in Europe as competitors exit the market

Klarna has reported significant growth in the UK and Europe even as some of its competitors exit the market. Zip and Clearpay are some of the BNPL providers that have left the European market, citing a harsh economic environment. The report comes amid the firm’s optimism on returning to profitability by the coming months.

Klarna’s expansion in Europe

Klarna has expanded significantly in the broader European market, securing about 100 million customers and partnering with over 470,000 businesses. In the UK, it has 18 million customers and 31,000 businesses as part of its network.

In the second quarter of 2023, its GMV grew by 14% in Europe and 26% in the UK year-on-year. This refers to the value of goods sold via its platform.

Klarna’s CEO, Sebastian Siemiatkowski stated, “While other, smaller players dial back their commitment or leave the region altogether, we’re doubling down, further strengthening our position In Europe, as well as the US”.

The BNPL company’s steady uptake across the European continent comes a few months after it reported a significant decline in losses. As a result, it is optimistic that it will return to profitability before the end of 2023.

Klarna reported a decline in net losses in the first quarter of 2023 at 1.3 billion Swedish kronor. During this period, its revenue surged by 13% to 4.9 billion kronor as its credit losses declined by over a third. In addition to its effective use of cost-cutting measures and enhanced services, its efficient expansion in the US market has also contributed to the recorded rise in revenues.