Three Quick thoughts on Klarna's IPO Filing
First. Klarna and Shop Pay are both examples of things that should not exist if Paypal has its eye on the ball. (eBay had similar stories with GOAT, Grailed, StockX, etc)
On the other hand, with what I believe to be at least paying attention leadership from Paypal, I worry for Klarna (it's still always going to be one of many) but I do not worry for Shop Pay (it has a structural advantage while Shopify is ascendent).
Klarna at $105B in GMV facilitated is approximately a quarter of Paypal branded checkout GMV of ~$500B (not released but popular estimates put this % at one-third of Paypal's total $1.68T TPV).
Klarna revenue growing 24% means its growth is about 4x fast fast as Paypal.
It would also put Klarna at a similar size to Shop Pay (Shop Pay was $27B in Q4), with Shop Pay growing 2x as fast as Klarna (50%).
Second. Klarna has made a lot of noise about advertising and identity. Still, it's primarily a "Pay Later" network (80%+ GMV). Advertising is 11% of revenue and growing, but not exponentially so.
Third. Sweden is still the market that stirs the drink. The company has 80%+ consumer penetration in its home country. No other country has > 40%, with Germany the closest second at 33%, followed by UK at 20.4%. The company is telling stories about how markets will behave like the more mature markets, but it's a big stretch in my mind.
The company's revenue is growing 24% y/y at $2.4B and they barely squeaked out a net profit of $21M.
