Klarna: Kreditor's Erlang Engine, a $46B to $6.7B Drop and an AI Bot

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Klarna started in 2005 as Kreditor, founded by Stockholm School of Economics students Sebastian Siemiatkowski, Niklas Adalberth and Victor Jacobsson in the school's incubator. Online shoppers then distrusted handing card numbers to unknown sites, and merchants feared stolen cards, so Kreditor let buyers receive goods first and pay later by invoice while it took on the fraud and credit risk. Angel investor Jane Walerud put in 600,000 Swedish kronor for 10 percent and connected the founders with developers who built the system in Erlang, a language Ericsson created for telephone switches and known for near-perfect uptime. The company renamed itself Klarna in 2009 and expanded to Norway, Finland, Denmark, Germany and the Netherlands, buying Sofort for direct bank payments and Israel's Analyzd for passive behavioral biometrics, then entered the U.S. around 2015 with backing from Sequoia and General Atlantic.

A June 2021 round led by SoftBank's Vision Fund 2 valued Klarna at $46 billion, but as interest rates rose, a July 2022 raise valued it at $6.7 billion, an 85 percent drop. Klarna cut about 700 jobs in 2022, with the CEO publishing a list of affected staff on LinkedIn, and in 2024 an OpenAI-powered assistant handled two-thirds of customer chats in its first month, the work of 700 agents. Headcount fell from over 5,500 to about 2,900 by 2025. Klarna listed on the New York Stock Exchange as KLAR at $40 a share in September 2025, reporting $127.9 billion in gross merchandise volume and $3.5 billion in revenue, and has since applied for a Utah bank and announced the Klarna USD stablecoin.

• In December 2024 Sweden's Financial Supervisory Authority fined Klarna 500 million kronor over anti-money laundering deficiencies.
• A 2020 autofill bug and a 2021 app glitch exposed customer data, leading to a 7.5 million kronor privacy fine.
• The UK Advertising Standards Authority banned an Instagram influencer campaign linking deferred payments to lifting moods during COVID-19 lockdowns.
• The UK's Financial Conduct Authority will bring deferred payment credit under regulation by July 2026.
• Klarna sold its original checkout business in 2024 and partnered with Stripe, JP Morgan Payments and Apple device leasing.