(Finance) – Klarnathe Swedish fintech startup and Europe’s highest rated fintech startup, announced that it will lay off about 10% of its 7,000 employees, as inflation and the war in Ukraine worsened the company’s performance. Klarna is the most prominent company in the “buy now, pay later” sector: it is a rapidly growing market, whose translation is “buy now and pay later” and which deals with providing short-term financing thanks to which consumers can make purchases by paying them in installments.
The company has registered a lost of SEK 7.09 billion (about $ 675 million) in 2021 and SEK 2.57 billion (about $ 245 million) in the first quarter of 2022. Klarna said today that the world has changed since the company defined its business plans in the fall of 2021.
“Since then, we have witnessed a tragic and unnecessary war in Ukraine, a change in consumer sentimenta sharp rise in inflation, a highly volatile stock market and a likely recession, “said Sebastian Siemiatkowski, chief executive and co-founder of Klarna.
Klarna is looking to raise about $ 1 billion in a new round of financing, according to the Wall Street Journal. However, the Swedish company, valued at nearly $ 46 billion in June 2021, could get one significantly lower rating after the new round, about 30 billion dollars according to rumors gathered by Bloomberg. The rise in interest rates would in fact be affecting the valuation of the company’s debt and equity.