PYMNTS MonitorEdge May 2024

Klarna Says AI Tools Reduced Operating Expenses 11% in Q1

Klarna reported Thursday (May 30) that it achieved both accelerated revenue growth and lower operating expenses during the first quarter, with the latter driven by its deployment of artificial intelligence (AI) tools.

The company saw a 29% increase in total revenue in the first quarter, up from the 13% rise it saw in the same quarter a year earlier, Klarna said in a financial update released Thursday.

“This surge is driven by our expanding presence in the U.S., where we continue to onboard major retailers,” Klarna said in the update. “As the preferred choice for consumers’ everyday spending, commerce thrives on the Klarna network.”

In the U.S., the company’s total revenue increased by 38% year over year, according to the update. The U.S. is Klarna’s biggest market in terms of revenue.

Key partnerships include Uber, Uber Eats, Expedia.com and Hotels.com, the update said.

Klarna also reduced its operating expenses by 11% during the quarter. The company attributed this to efficiencies delivered by its deployment of AI tools. Ninety percent of its employees now use AI in their daily work.

“This internal AI revolution is further propelled by Kiki, Klarna’s bespoke internal AI assistant, which has adeptly responded to over 250,000 inquiries,” the company said in the update.

During the first quarter, Klarna launched several new product innovations aimed at promoting the company as “an everyday spending partner,” per the update.

These include the introduction of the Klarna Card in the U.S., a consumer-facing AI assistant that has already engaged with 4 million customers, a “Sign-in With Klarna” feature that simplifies online shopping and a Klarna Plus subscription service that has already drawn 70,000 sign-ups, according to the update.

“With several new products set to launch in the coming months, we’re preparing for a truly exciting year ahead,” Sebastian Siemiatkowski, CEO and co-founder of Klarna, said in the release.

It was reported in February that Klarna may go public via a possible $20 billion initial public offering later this year. Bloomberg reported in February that the Swedish FinTech company once crowned as Europe’s most valuable startup was in discussion with banks for the potential IPO, though the talks were ongoing and the valuation and timing could change.