We see a lot of eCommerce websites these days and Klarna is one of them. Klarna is one of the biggest and leading financial technology company in Europe since the last decade. Their model of business “buy now and pay later” attracts millions of transactions per day.
If we see back in the history of the company then we can say that they have a lot of controversies on their plate because of their business model. But at this time company is a giant and it seems like they are doing great in the market too.
This new business model was launched by three friends Sebastian Siemiatkowski, Niklas Adalberth, and Victor Jacobsson in 2005. They introduced their business model in a competition at the Stockholm School of Economics. Their idea was to provide a platform that helps both retailers and consumers. Three friends got the last place in that competition but they didn’t quit and as they pushed ahead the result was Klarna.
Although they got the last place in the competition, they were able to win investments from some big names. After proving itself the company expanded into 14 countries in 14 years and currently, they have a staff of around 2,500 members.
It was the time whey company was crowned as the biggest financial technology giant in Europe which is owned privately.
As I said, previously that company is also famous for its controversial business model. In 2019 they had some tough encounters with authorities. Also in 2019, Mr. Siemiatkowski was summoned to meet the consumer rights minister of native Sweden because of the allegations on the company that how do they handle personal data of users.
This fintech giant “Klarna” allows the consumers of the UK to buy a product and pay the bill after 30 days. All consumers have to do is to provide their name, date of birth, mobile number, and billing and email addresses.
This model helps the consumers to buy a product first hand and check it in real life if it is what they excepted or something else which they don’t want to keep or simply it is not good enough as it was supposed to be, as they didn’t pay any money yet so they get to return it without any fear of loss of money, and if they like the product then they can pay in between of the set period. If a consumer does not pay in time then the company sends them reminders and sometimes they also refer consumers who do not pay in time to debt collection authorities.
The company that failed in a competition is now worth 11 billion dollars even after facing stiff competition company still has the attraction of investors.