With a current valuation of $ 45.6 billion, Klarna It is one of the most valued private fintech companies in the world. It is the leading global bank in payment and purchase financial services, connecting more than 90 million users with 250,000 merchants around the world. It arrived in Spain in July 2020, it has just reached one million users and already has 300 associated brands. Klarna offers consumers to buy and pay in installments without interest and assumes the financial cost of the operation. In Spain, specifically, the option ‘Pay in 3’ is available, which fragment the amount of a purchase in three installments without interest. The business model is based on the commissions it charges the brands it works with (a fixed rate and another variable, depending on the annual volume of sales).
He founded the startup in 2005 when he was just 23 years old. Did you expect to get that far?
When you are a child and you play in a soccer team, you do not imagine arriving one day at a big club, but you dream about it. Obviously at the beginning it was a crazy idea to get to where we are, although that was the goal. We start from an idea, that traditionally banks make a lot of money with loans. It depends on the bank, but they usually have strategies to make you ask for more money than you need and charge more interest. We try to create a free model for the consumer where brands pay a fee. The merchant also wins because their sales increase.
How did the business expand?
We started in Sweden, very focused on markets where the credit card is used a lot. We grew up in northern Europe, in German-speaking countries, in the Netherlands… We started to grow and I thought we should slow down. Internal procedures began to be more complicated, more bureaucratic. That is why we spend some time thinking about how to change our culture, our way of working, our technological systems… We have changed many things and in the last three years we have managed to benefit from these changes. Internally, we had to take risks, we meditated on everything and now people’s passion and energy is greater. Everything has changed for the better and the result is that we are in 20 markets and growing. Returning to the similarities with football, in the company you have a team that you must train, motivate …
Why the bet on Spain?
It is a large market and a long-term bet. One of our ambitions is to be the first bank in the European Union to offer services in all European countries, on the same platform. Another reason why Spain was very attractive to us is that it has a history of great fashion companies. We are privileged to work with brands such as Zara, Mango, Desigual and even smaller ones. We are in a globalized world and we can help these companies in other markets. We care about helping local businesses become national.
They have reached one million users in Spain. What is the next goal?
The goal is for all Spaniards to use Klarna. When? That is another matter. Hopefully soon. We already work with 300 brands in Spain. They are very often fashion brands, but we cover all categories.
They have chosen Madrid to open a ‘hub’. What does the Spanish capital contribute?
The company is growing fast and we are looking to bring in talent. And here in Spain, and particularly in Madrid, there is a lot. What’s more, we believe a lot in the Spanish market. We work locally, and we are already in several Spanish cities. On the other hand, we work with many engineers from all over the world and Madrid is a wonderful place to live, it is easy to convince them to work here. In the ‘hub’ 50 people are already operational and 10 are joining each week, so we hope to reach 500 workers in a short time.
What is the role of ‘fintech’ in the traditional banking market?
Traditional banking puts the money to perform to achieve the greatest benefit in the shortest possible time while risking little. But the sector is transforming with technology, which is becoming increasingly important. The challenge for banks is how it becomes a sufficiently agile software company. I think that in the end all banks are going to have to be ‘fintech’. It is a very good time for ‘fintech’ to continue growing, they have a lot of potential. And at the same time it is interesting to see that thanks to them the banking system is more efficient and reduces costs.
What advice would you give to anyone who wants to start a business?
I think if you really have a passion for something and you work really hard to get it, you get it. In my school a few years ago 7% of young people wanted to start a business, now it is 70%, which is wonderful. Keep in mind that this job is not for everyone, but if you work hard, you get it. The first seven years I worked an average of eight hours a day, 365 days a year. It was very intense, but I learned a lot.