(Bloomberg) -- Klarna Bank AB’s chief executive officer said he’s been frustrated by investors who are less willing to fund expansion at the Swedish buy-now-pay-later platform, which saw its valuation slashed by 85% this year.
“The consequence of the new environment is that investors price companies differently,” CEO Sebastian Siemiatkowski said in an interview at the Slush conference in Helsinki this week. “It means that money isn’t as cheap as it was a year ago. It doesn’t allow you to invest as much into the future as you’d like to.”
“We have to live with the reality that investors expect us to show a little bit more results here-and-now, rather than talking about the future,” he said.
Siemiatkowski said Klarna must focus on engaging its existing users rather than acquiring new ones in the US, currently its biggest revenue driver.
The company entered the US in 2019 and Siemiatkowski has said in the past that expansion there hurt profitability. Still, the market, which has 30 million users, remains a “top priority,” he said.
Read More: Klarna CEO Worries FTX Failure Will Lead to Regulatory Overreach
Klarna saw its valuation slashed to $6.7 billion from $45.6 billion in a fundraising round announced in July. The company is vulnerable to the tech rout that’s left investors sitting on significant losses and demanding that unprofitable investments reign in spending. The company’s model also makes it vulnerable to rising costs that might force customers to cut spending or affect their ability to repay their loans.
Siemiatkowski said last month that the company’s “painful” restructuring, where it said it would cut about 10% of its staff, was largely complete.
The company is looking for new sources of revenue, such as the product comparison tool it’s rolled out in the US, UK and the Nordics. The new service, which follows the company’s $1 billion deal for PriceRunner, will give retailers an alternative to Amazon.com Inc.’s services, he said.
Klarna aims to address reasons customers might hesitate to make a purchase, such as wondering if they can get a better deal somewhere else or if alternative products are available, Siemiatkowski said.
“We are trying to support consumers in thinking about it as a digital shopping assistant,” he said. “If you want to accelerate commerce, you want to help consumers answer these questions, so they feel comfortable in their purchase decisions.”
(Updates with additional details on product-comparison tool from eighth paragraph)
©2022 Bloomberg L.P.