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Banks

Sweden's Klarna to report sales surge as U.S. growth takes off

STOCKHOLM (Reuters) - Sweden’s Klarna is on track to report a more than 40% jump in the annual value of transactions carried out on its payment platform to over $50 billion as more consumers move online during the COVID-19 pandemic, its chief executive said.

FILE PHOTO: A smartphone displays a Klarna logo in this illustration taken January 6, 2020. REUTERS/Dado Ruvic/Illustration/File Photo

The “buy now, pay later” company, whose peers include Affirm, QuadPay and AfterPay, had gross merchandise volume (GMV) of $35 billion in 2019.

In comparison, Affirm, which has a market value of $27 billion, had GMV of $4.64 billion for the year ended June 30, 2020.

Klarna has been investing heavily in the United States and that has paid off with rapid growth in the country.

“We have been adding about a million new consumers per month during the fourth quarter in the U.S. alone,” CEO Sebastian Siemiatkowski said, adding the company now had 15 million users in the United States.

Currently, Germany is the company’s biggest market by volume and revenue, but the United States is catching up fast and may take the top spot by the end of the year.

Klarna has been expanding in other regions too, including entering four new markets during the last year. Siemiatkowski said it planned to add five new markets between now and the summer, without naming them.

The company will report fourth-quarter and full-year results on Thursday.

While Klarna partnered with bitcoin exchange Safello last week, Siemiatkowski has reservations about the hype surrounding the cryptocurrency.

“I do feel it is going to end badly for a lot of consumers who will move too much of their savings into something that still is of speculative nature,” he said.

Tesla’s $1.5 billion bitcoin purchase earlier this month set the cryptocurrency soaring above $50,000 while its CEO Elon Musk have been promoting cryptocurrencies on his Twitter account.

Reporting by Supantha Mukherjee based in Stockholm. Editing by Mark Potter

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