Klarna at $2.26B/yr

TL;DR: Sacra estimates that Klarna generated $2.26B in revenue in 2023, up 22%, as they become a neobank, moving away from the quickly-commodifying buy-now-pay-later (BNPL) market and angling to compete directly with big banks. For more, check out our full Klarna report and dataset.

Key points via Sacra AI:

Sacra estimates that Klarna generated $2.26B in revenue in 2023, up 22%, while processing $96B in gross merchandise volume (GMV), up 17% year-over-year, with the United States as their biggest market, making Klarna the most successful European fintech to penetrate the U.S. market—typically the graveyard of international fintechs. Compare to buy-now-pay-later competitors like PayPal (NASDAQ: PYPL) at $29.8B in revenue, up 8%, Affirm (NASDAQ: AFRM) at $1.59B in revenue, up 18%, and Afterpay (acquired by Block for $29B) at $1.04B in revenue, up 28%.
As incumbent banks like Chase launch their own BNPL products, with Chase recently shutting off all third-party BNPL services for their 149M U.S. credit cards, Klarna’s key unfair advantage is their existing relationships with 550,000 merchants rewards—which can allow them to offer superior rewards for consumers and better economics for merchants. Klarna's network of already-integrated merchants solves the cold start problem, while the ability to pay by fee-free debit through their app incentivizes merchants to offer Klarna—as a direct payment, not BNPL—and allows them to offer consumers up to 10% cash back rewards (double Chase's ~5% on select categories).
To escape BNPL’s commoditization, Klarna is expanding into both sides of the transaction, building a D2C shopping destination app (now at $10B in annual GMV) and now, with their EU banking license in hand, a neobank (35% of GMV in Europe is debit, not BNPL). By facilitating transactions on their own app between consumers and merchants and bypassing the card networks—with BNPL as the wedge that got them there—Klarna is now in the loop on SKU-level data on purchases, laying the groundwork for their next act as a parallel network to Visa/Mastercard.

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