Today, we're excited to launch our report on Klarna: The $31B Snapchat of Personal Banking. We’d love for you to read it and let us know what you think.
Klarna is the world’s leading Buy-Now-Pay-Later (“BNPL”) provider, with $53B of GMV in 2020 to AfterPay’s $11B and Affirm’s $4.6B. And after raising at a $31B valuation earlier this year, they have regained their title as Europe’s most valuable company.
The U.S, which saw $750B in ecommerce spending last year, is the natural next step for Klarna to maintain its growth. But to win the U.S, Klarna will need to unseat PayPal, a behemoth with 54% retailer market share, 350M+ user accounts, a $300B+ market cap, and as of last year, their own BNPL program.
Some key points from our report:
In Klarna’s home markets, BNPL is replacing credit cards and driving increased frequency of usage. 23% of all ecommerce transactions in Sweden use BNPL, and Klarna cohorts buy more every year: 10x in year 2, 14x in year 3, and 20x in year 7, with the earliest adopters buying as often as 27x per year.
However, the BNPL space is becoming increasingly crowded. Two quarters after launching their own BNPL product, PayPal has surpassed Afterpay and Affirm—scale-wise, 54% of websites accept PayPal, compared with only 1.2% for Klarna.
To overcome the competitive pressure, Klarna is repositioning itself from B2B to direct-to-consumer (“D2C”). With their brand, investment in product, and alignment with ecommerce, Klarna aims to become a destination app for Gen Z and millennials and become the default consumer e-commerce portal.
Check out the report for our full analysis, and let us know what you think!