Klarna said it's hoping to become profitable again next year

Klarna’s Cutting Down In Hopes Of Turning A Profit Soon

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Your Daily Brief For March 29th

Buy-now-pay-later (BNPL) firm **Klarna** is still shedding cash, but it said on Wednesday that it’s getting closer to turning a profit.

**What does this mean?**

Klarna was the darling of Europe’s tech startup space not long ago, showered with praise and funding alike – but how the mighty have fallen. The global economy’s hit a rut now, and capricious investors have fixed their attention on companies that can actually turn a profit. And Klarna doesn’t, which could be why the firm’s valuation plunged from $46 billion to $7 billion in July. Since then, Klarna’s been proving skeptics right, racking up a $200 million loss last quarter, twice the sum at the same time last year. Now, though, Klarna’s determined to turn things around: the firm bid farewell to 10% of its staff back in May, and it’s tightening up the conditions of the loans it offers. With a little luck, it’s hoping those moves will see it turning a profit again within a year.



**Why should I care?**

***Zooming in:*** *Grand ambitions.*

Cutting costs is just one way Klarna’s trying to make up ground. The other is by tapping into revenue streams beyond the BNPL space it sprang from. Case in point: the firm recently [rolled](https://techcrunch.com/2022/11/14/a-credible-alternative-to-google-and-amazon-klarna-brings-its-price-comparison-tool-to-europe/) out a new price-comparison tool, built on its $1 billion purchase of **PriceRunner** last year. That’s one step in the firm’s plans to turn Klarna into a one-stop-shop for online bargains, rivaling similar services offered by **Google** and **Amazon**.

***Zooming out:*** *Inflation steps off the gas.*

Inflation has doled out nothing but suffering to most firms, but it’s probably been kind enough to Klarna: after all, quick online loans can be handy for hard-up shoppers waiting on their next paycheck. But now there are signs that inflation’s easing in Europe, [falling](https://www.reuters.com/markets/europe/euro-zone-inflation-drops-bolstering-hopes-smaller-ecb-hike-2022-11-30/) to a lower-than-expected 10% in November versus the same time last year – the first time the metric’s decreased in a full 17 months.



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Klarna’s Cutting Down In Hopes Of Turning A Profit Soon

Klarna’s Cutting Down In Hopes Of Turning A Profit Soon

BECOME A SMARTER INVESTOR

Your Daily Brief For March 29th

The Economy’s Walking A Tightrope: Here’s How To Prepare For Both A Crash And A Soft Landing