FILE PHOTO: A smartphone displays a Klarna logo in this illustration taken January 6, 2020. REUTERS/Dado Ruvic/Illustration
STOCKHOLM (Reuters) -Swedish payments group Klarna Bank reported on Thursday a much smaller six-month operating loss than a year earlier and said it had reached profitability on a monthly basis ahead of target.
The January-June operating loss at the privately held (BNPL) fintech, which last made a full-year profit in 2018, was 2.01 billion crowns ($185 million) against a year-earlier loss of 6.17 billion.
"We posted a small profit in May," CEO Sebastian Siemiatkowski told Reuters. "We feel very confident that we'll be posting a profitable quarter very soon and then eventually also a full profitable year."
Klarna allows shoppers to buy online through its merchant partners and settle their dues in instalments using its “buy now, pay later” (BNPL) service.
In May, it said it was on track to reach profitability on a monthly basis in the second half of the year.
Last year, business conditions deteriorated as soaring inflation and the war in Ukraine hit consumer confidence, prompting it to cut staff and sending its valuation tumbling.
Siemiatkowski said in the interview that Klarna had no need in the foreseeable future to raise more funds.
Klarna last raised funds in 2022 at a valuation of $6.7 billion, down around 85% from the $46 billion price tag it attracted in 2021. Since then the company has reined in costs to become profitable and fight rampant inflation.
Klarna Bank is a unit of Klarna Holdings, which has attracted investment from the likes of Sequoia, Permira and Silver Lake.
Siemiatkowski said Klarna, whose biggest market by revenue is the U.S., now has more than 30 million users.
In the second quarter, gross merchandise volume (GMV) - the value of goods purchased through Klarna - was up 14%, and revenue growth was 17%.
($1 = 10.8520 Swedish crowns)
(Reporting by Supantha Mukherjee, writing by Anna Ringstrom, editing by Terje Solsvik; Editing by Sharon Singleton)
