The Swedish payment service Klarna is also feeling the effects of the declining interest of investors in fast-growing and loss-making fintech companies. The company announced in Stockholm on Monday that it had secured $800 million in new financing, with a valuation of $6.7 billion. The company has lost about 85 percent of its value in a year.
A year ago, the online payment provider was valued at $46 billion.
Fintechs and crypto industry under pressure
Amid a wide-ranging stock market sell-off, valuations of fintech startups have also collapsed, some of them en masse. BNPL rival Affirm Holdings has lost more than 80 percent of its market capitalization this year alone.
Recently, for example, Austrian start-up Bitpanda – a cryptocurrency exchange – announced it would reduce its workforce from over 1,000 to a close to 700. This was blamed on a crisis in the crypto market.
Wave of layoffs: every tenth employee has to leave
To cut costs, Klarna had already announced in May that the company would cut 10 percent of its jobs. Volatile stock markets and the prospect of a likely recession also contributed to the decision. The job losses affect all parts of the company, Klarna had explained.
“Klarna’s rating is solely due to the fact that investors are suddenly voting differently than in recent years,” said Michael Moritz, partner at venture capital firm Sequoia. Sequoia, the company’s founders, Bestseller, Silver Lake and the Commonwealth Bank of Australia participated in the latest round of financing.
I’m Wayne Wickman, a professional journalist and author for Today Times Live. My specialty is covering global news and current events, offering readers a unique perspective on the world’s most pressing issues. I’m passionate about storytelling and helping people stay informed on the goings-on of our planet.