Klarna's Valuation Slashed by $39 Billion Amid Fintech Rout (bloomberg.com) 18
Klarna Bank's valuation has been slashed to $6.7 billion in its latest funding round, in a dramatic reversal for one of Europe's most high-profile startups. From a report: The buy-now-pay-later giant said it raised $800 million from new and existing investors, according to a statement Monday. Its new valuation is down from the $45.6 billion it achieved in June 2021, with Klarna reducing its ambitions several times during the latest talks with investors. Once one of the world's most valuable startups, Klarna was discussing valuations as high as $60 billion as recently as February. That was before the war in Ukraine and rising rates helped to spark a market-wide collapse.
South Park (Score:2)
Annnnd it's gone.
In all seriousness, I have never heard of this company before. If they have a sound business plan then good for them and their investors/shareholders. Otherwise, I hope they know what they are doing.
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The headline is kind of funny, too. $39B is meaningless out of context. If Tesla or Apple lost $39B of value, well, whatever. But for these people it's like an 80% loss of value. It's probably still overvalued.
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Probably doesn't help that Apple announced a similar BNPL scheme for Apple Pay. You can turn pretty much any purchase into a BNPL one.
Re:South Park (Score:5, Informative)
The easiest way to illustrate how evil it is is this - imagine you use it to buy $100 groceries every week. Klarna says, pay it back in 4 installments of $25 every 2 weeks. Great! But if you spend $100 on groceries the next week, now suddenly you're paying $25 every weeks since you have the first debt and now the second. Add another week and it's $50 one week and $25. Add another and it's $50 each week. And so on. Throw in some other purchases on random dates and any day could become "screw you where's my money?" since if you miss a single installment you're hit with fees and interest from the initial purchase. And chances are if you miss one payment you're going to miss more.
It's toxic and evil and unsurprisingly people are racking up huge debts. As bad as a regular credit card is, at least you know when the statement comes and how long and how much you need to pay on it.
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Yes, that is how this works. You bought something, you now have to pay it off. It is irrelevant if you are already paying off something else, you still bought something new which needs paid off.
It's toxic and evil and unsurprisingly people are racking up huge debts.
The
Re:South Park (Score:5, Insightful)
Interest rates are capped by regulation - among other regulatory policies - precisely because "dont like it dont use it" results in a society in which the people who are not responsible enough for themselves are irresponsible to such a degree that if we were not responsible *for them* in the form of consumer protection law, they would detrimentally impact the economy we have an interest in seeing operate efficiently. Sure, I suppose it annoys the libertarians who really can't handle a world that involves relationships between human beings or people not "getting what they deserve", but developed societies and their general wills recognize this and create rules accordingly so as not to cut off the nose to spite the face.
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The perhaps people should either a) stop using this service or b) stop buying things.
When people like you go into the "personal responsibility" schtick it just pathetic form of victim blaming and tacit acknowledgment that this company is del
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A) How is Klarma luring people into doing something they wouldn't already do? Are you saying stores which offer credit cards are luring people into spending then soaking them with interest fees? Let me guess, the next thing you'll be accusing Klarma of doing is entrapment.
B) BNPL has been going on for longer than I've been around. Are you going to complain about al
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The point of Klarna is to lure people into spending and then soak them in repayments knowing they'll miss some and incur penalties. A) How is Klarma luring people into doing something they wouldn't already do? Are you saying stores which offer credit cards are luring people into spending then soaking them with interest fees? Let me guess, the next thing you'll be accusing Klarma of doing is entrapment.
Deceptive advertising targeting those that traditional lenders would consider too much of a risk to extend lines of credit to. Then setting them up on minimum repayments to ensure that the debt isn't cleared until it is legally forced to. They are specifically using non-traditional means to target young people (I.E. TikTok and "influencers). The UK first pulled them up on this in late 2020.
Klarna are simply the online equivalent of a loan shark.
Further more they are trying to skirt regulations on resp
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Speaking of UK regulators, this BNPL wave reminds me in a way of those shitty payday lenders which ran rampant in the UK until the regulators ca
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Re:South Park (Score:5, Interesting)
What you mentioned is just the tip of the iceberg.
They have a history of dark patterns [wikipedia.org] in their UI to lead people into payment plans, over other options. The government here in Sweden plugged the loophole in the legislation, but did not deter Klarna from re-introducing the practice when expanding into other countries that didn't have legislation against it.
They have a reputation for not sending out bills and notices in time, or not at all, thus making it difficult for people to pay them in time before incurring late-fees. They have even bragged about it [youtube.com] at "Fintech" conferences.
They have a history of not adhering to GDPR requests. ... and you can find a lot more if you look.
Myself, I have their domains blocked in my web browser, so that I won't be able to purchase anything from online stores that use them as payment processor.
Too bad they weren't wiped out (Score:3)
Klarna is a company that the world doesn't need, and it'd be nice to see them wiped out.
Does anyone actually enjoy working in Fintech ? (Score:2)
Writing code to move numbers about seems like a very dull way to earn a living.
Re: Does anyone actually enjoy working in Fintech (Score:2)
Yes, I think it's an exiting field where it's possible, thanks to tech, to finally hit some of the big banks and take revenue from them, be it by taking their customers, or their money when they buy you. I think it's one of the most exciting areas in tech, and I love the high regulatory barriers to entry, keeps the idiots away!