Five Things to Know about BNPL Provider Klarna Ahead of Its IPO | Global News Avenue

Klarna, helps to popularize Buy now, pay later, submit Prospectus IPO Earlier this month, details about its growth over the past two decades were provided.

The company’s current buy, later compensation plan is related to Swedish consumers who can take home to purchase while paying part of the bill and agree to deduct further installments from their accounts in the coming weeks.

Since then, Klarna has expanded to 25 other countries, working with 675,000 merchants and paying from 93 million consumers. The company said it processed an average of 2.9 million transactions per day in 2024 and used a “fully automated process” to make underwriting decisions on short-term loans in seconds.

The document does not include details on how many shares Krana intends to sell, or at what price. This is what the company said.

U.S. growth has squeezed profits recently

Klarna made money in its first 14 years, but said profits were under pressure when it launched in the U.S. in 2019.

It calls 2023 a turning point because that is when it reaches the scale needed to generate positive profits in the United States. Klarna made a profit of $21 million in 2024 after reporting two years of losses. Over the past three years, Krana’s revenue has grown nearly 48%, from $1.9 billion in 2022 to $2.8 billion in 2024.

It is clear how many income streams are

Nearly 64% of revenue last year came from businessmen. Krana charges retailers transaction fees when their consumers use the service to payUber), apple(AAPL), Macy (m) and Wayfair (w). (It’s been clear lately Signature at Walmart ((WMT) and doordash (sprint) The company said. )

Merchants also pay to advertise on Klarna’s website and apps and highlight their products in users’ search results.

The company said another 12% of revenue last year involved consumer payments, such as “reminder” fees for delays. The company said consumer payments also include payments from Klarna Plus, a subscription plan of about $8 per month that comes with transactions and waive service fees.

The remaining 24% is related to interest – the interest paid by the borrower and interest earned on the investment.

Basic Payment Processing plays a smaller role in Krana

Klarna handles three types of transactions, including basic payment processing, transferring funds immediately.

About 26% Total product valueThe company said the total cost of goods sold through Krana was paid directly in 2022, but fell to 16% in 2024. Klarna said that during this period, Klarna’s “pay later” product (consumers delay payments or divide payments into installments) increased from 70% of GMV in 2022 to 79% in 2024.

During these three years, the share of GMV may carry interest on short-term loans.

Swedes use Krana for a series of purchases

The company compared its scope of operations in Sweden and the United States in its submissions, showing the role it can play in mature markets.

The company said about 82% of adults in Sweden used Klarna last year, and they made an average of 32 transactions. Their spending is fairly evenly distributed in categories including clothing and accessories, health and beauty, home and electronics, food, beverages and leisure.

In the U.S., nearly 10% of adults pay Klarna in 2024, five years after the company was founded. The company said Americans made more than five purchases on average, with 69% of their spending focused on clothing and accessories.

Krana says it has room to grow

Klarna envisions envisioning it by working with more businessmen, operating in new areas and attracting other consumers.

The company hopes to establish two revenue streams. Klarna, owns a bank license in Sweden. Want to enhance its retail banking business, Hold $9.5 billion in deposits for consumers by the end of 2024.

Klarna also hopes to expand its advertising business, which brought in $180 million, accounting for more than 6% of all revenue last year.