Buy-now pay-later giant Klarna has reported its fifth consecutive annual loss as the fintech gears up for a blockbuster IPO.
The Swedish firm, posted a net loss of 2.5bn kronor (£191m) last year, an improvement from its 10.4bn kronor (£794m) loss in 2022.
Revenue for the full year jumped 22 per cent to 23.5bn kronor (£1.8bn).
Klarna had swung to a profit in the third quarter but lost around 400m kronor (£31m) in the final three months of 2023.
Chief executive Sebastian Siemiatkowski said: “While we continue on our journey to long-term profitability, we made a conscious decision to invest in growth in the peak shopping season of Q4.”
He added that Klarna would continue to “invest wisely for growth and focus on being cost-effective on our path towards annual profitability.”
Part of Siemiatkowski’s plan to return to annual profitability for the first time since 2018 includes cutting costs.
Klarna reported today that its operating expenses fell 16 per cent to 14.5bn kronor (£1.1bn) in 2023, with the group shedding more than 1,200 staff from its 5,441-strong workforce.
Klarna was once one of Europe’s most valuable tech groups. Its valuation hit $46bn in June 2021.
However, higher interest rates have punished venture capital valuations and Klarna’s valuation fell to $6.7bn last year.
Bloomberg News reported on Tuesday the firm was in talks with banks about an IPO in New York in the third quarter of 2024, seeking a valuation of $20bn (£15.8bn).
Klarna offers around 150m active users the ability to delay or spread the cost of their purchases. The value of these purchases increased 17 per cent last year, while credit losses fell 32 per cent despite inflationary pressures on consumers.
The results follow a boardroom clash last month which saw Matthew Miller, a partner at Klarna’s largest shareholder Sequoia Capital leave the fintech’s board after trying to oust Michael Moritz as chair.
Klarna is preparing for one of the biggest public offerings of the year in a bid to boost investment and return to profitability.