Klarna boss Sebastian Siemiatkowski slams media following funding round
Buy now pay later big hitter Klarna yesterday announced a $800 million financing round, valuing it at $6.7 billion.
This featured new investors including Mubadala, the sovereign wealth fund of the United Arab Emirates, and the Canada Pension Plan Investment Board, in addition to existing backers such as Sequoia and Commonwealth Bank of Australia.
Sounds great until you take in to account that, in June 2021, the company was valued at $45.6 billion after closing on a $639 million round of funding, making it the highest valued private FinTech in Europe at that time. Ouch!
Michael Moritz, Chair at Klarna and a partner at Sequoia, blamed “investors suddenly voting in the opposite manner to the way they voted for the past few years”.
He predicted that “after investors emerge from their bunkers, the stocks of Klarna and other first-rate companies will receive the attention they deserve”.
Co-founder and CEO, Sebastian Siemiatkowski, meanwhile took to Twitter to flag that the funding was secured “during the worst stock downturn and challenging macro in decades”.
“We are not immune to public peers being down 75-90% and hence our valuation is down on par,” he added.
He also threw out “some facts that the media might omit in reporting on this”.
He tweeted: “Klarna has been profitable for its first 14 years of existence. 2017 = 14% EBT.”
“Our established markets currently generate 1 bn in gross profit per year. 2. Since 2019 we have invested to become US market leaders with 30 m users, 60% brand aware. and 30 of top 100 US sites.”
And there was more: “As investor sentiment shifts it is time to return to profitability. But now we are doing so on a global platform, 150 m users, over 20 markets and 400 k partners.”
“We don't do pref shares only common stock. Other private startups fundraise and valuations are not comparable.”
“But let's be honest, it is odd,” he continued.
“Seeing Klarna valued slightly more than mid 2019... OK better than PayPal same value as at the end of 2017 ...but odd considering all the things achieved, how much larger and better we are now. What does not kill you makes you stronger...”
Siemiatkowski concluded: “We are after the world's largest profit pool; credit cards & retail banks.”
“We will make sure more money stays in consumers' pockets. Offer healthier interest-free financial services. This 440 b opportunity is as real now as 6 m ago. Only difference; we added 7 m. customers since then.”
So, yeah, stick that in your pipe and smoke it, all you media peeps who have been doubting Klarna of late.
What do you think? Is it wise for Siemiatkowski to come out fighting, or is he asking for trouble by taking on his critics via a social media platform when his company is under severe pressure?
Let us know in the comments section below.
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