Technology Klarna freezes hiring as chief bets AI can do...

Klarna freezes hiring as chief bets AI can do the job instead


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Mr Siemiatkowski argued Klarna’s loans are a fairer and more sustainable alternative to credit cards and said his ambitions for the company are much broader.

The company has a banking licence in the EU, offers bank accounts in Germany and is widely used for online payments, rather than delayed payments, in its home country.

A listing would cap an eventful and at times tumultuous few years for the business.

In 2021, a $639m investment round led by the tech investment giant SoftBank valued Klarna at $46bn, making it Europe’s most valuable start-up and turning Mr Siemiatkowski into a paper billionaire.

By July 2022, soaring interest rates meant easy money had dried up. Klarna was forced to take new funding at a $6.5bn valuation – an 85pc cut – and refocus on profitability. It announced job cuts last year, including a redundancy round that affected one in ten staff.

Mr Siemiatkowski addressed the recent challenges with the breezy matter-of-factness of someone who lives on a longer time horizon.

“I’ve gone through a few cycles with this company before. That obviously gives you at least a little bit more of ‘This too shall pass’.”

A teenage Polish immigrant to Sweden, Mr Siemiatkowski met one of his co-founders while working at Burger King and set up Klarna in Stockholm in 2005.

“I personally, have always wanted to build a $100bn, trillion dollar type of company, and I still want to do that and I still see that the opportunity is there.”

Revenues in the third quarter of the year rose 30pc to 6bn krona (£454m) and Klarna recorded an operating profit of 130m krona. Crucially, it has been signing up retailers such as Airbnb and German fashion giant Zalando, which pay Klarna a marketing fee for bringing in shoppers.

America has become the company’s largest market by customers, suggesting it is putting up a strong showing against US rivals such as Affirm and Apple, which launched a pay later service earlier this year.

The picture in Britain has been less clear. The Treasury has been consulting on draft legislation that would bring buy now, pay later providers under the gaze of the Financial Conduct Authority, meaning requirements around credit checks and marketing. However, industry sources believe the legislation has been quietly kicked into the long grass.

Mr Siemiatkowski described himself as a free marketeer but said the company supports regulation: “I’m not a big proponent of anarchy. I don’t think it’s a good way to run society.”

However, he warned against prescriptive rules, arguing that what he sees as the great evil – credit cards – end up being much worse for consumers despite being regulated.

Mr Siemiatkowski lobbied Boris Johnson on the rules, an effort that may now have been in vain, but described the current government as “very pro business… it has done a lot of smart things”.

He said: “The UK is definitely the financial centre of the world and continues to be so,” speculating that his fondness for the UK might be the result of a recent DNA test that said he was 30pc British.

In the next six months, the company aims to take its first steps towards launching a personal financial assistant, driven by AI, that can automate and suggest better financial decisions.

Mr Siemiatkowski believes this is what will drive future growth at Klarna and shake up the banking industry.

He said: “The digital assistant will be able to renegotiate your mortgage on your behalf. That means from a macro economic level, all of the excess profits that have existed in this industry are going to go away.

“If that’s the future, it means that the market will be smaller, but Klarna, if we do a good job, could participate in that transformation and take a larger market share of a smaller pie.”

Mr Siemiatkowski is not far from having run Klarna for two decades, but said he wants to have “a few more decades here”.

“I didn’t understand fully the complexity of the challenge that I took on 20 years ago,” Mr Siemiatkowski conceded. “[If I had] I would probably have chosen a slightly more simple industry.”


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