STOCKHOLM (Reuters) - Swedish online lender Klarna, which is backed by rapper Snoop Dogg, reported its first annual loss on Wednesday after a year of expansion in the United States and Europe.
This is the first year in which Klarna has posted a loss since it was set-up in 2005, making it an outlier among tech companies which often lose money for years.
Klarna, which was Europe’s most richly valued financial technology company until it was matched by British banking app Revolut, launched a U.S. shopping app in 2019 and opened a tech hub in Berlin, which employs 500 staff.
Klarna’s 2019 operating loss was 1.1 billion Swedish crowns ($113 million), against a 160 million profit for 2018 for the ‘buy now, pay later’ digital bank.
The loss was due to investment, particularly in the United States, and were flagged to investors when Klarna raised $460 million in August, spokeswoman Aoife Houlihan said.
“We aren’t worried at all by these results,” Houlihan added.
Klarna was Europe’s most richly valued financial technology, or fintech, company until this week, when British banking app Revolut raised fresh funds on Tuesday, matching the Swedish company’s $5.5 billion valuation.
European fintechs have attracted 20% of venture capital funding over the last three years, more than any other technology sector, technology analysis site dealroom.co says.
Despite the loss, Klarna increased its operating revenue by 31% to 7.6 billion crowns. It said its app was downloaded 9 times more in the final quarter of 2019 than in the first quarter of 2018, as it grows its customer base.
Reporting by Colm Fulton; Editing by Alexander Smith