Klarna reports major gains—and losses—for 2021 as it refines its growth strategy

By the numbers: Sweden-based buy now, pay later (BNPL) firm Klarna reported a 42% year-over-year (YoY) increase in gross merchandise volume (GMV) for 2021. GMV growth decelerated slightly from 2020’s 46% YoY increase.

  • Klarna’s active consumer base hit 147 million in 2021, up from 87 million the year before.
  • The BNPL firm’s losses swelled approximately 304% YoY in 2021 versus 50% YoY in 2020, according to Insider Intelligence calculations.

How we got here: Klarna expanded rapidly last year, which helped bolster its user base and GMV—but it racked up losses along the way.

  • Klarna entered five new markets in 2021, including France. It also grew its footprint in major markets like the UK, opening a new office in London and building out its Manchester location. Expansion helped Klarna reach new customers but likely contributed to its losses.
  • It also went on an acquisition spree. Buying up companies—retail tech firm Hero, discount shopping platform Stocard, and influencer marketing startup APPRL—let Klarna improve its merchant offerings and boost customer engagement.

The bigger picture: BNPL providers are taking divergent strategies to grow and compete.

  • Acquisitions. On Sunday, Australia-based BNPL firm Zip agreed to acquire US-based Sezzle in a deal worth AUD 491 ($368.5 million)—advancing Zip’s global acquisition spree. And earlier this year, payments titan Block (formerly Square) bought Australia-based BNPL giant Afterpay. Consolidation can help incumbents minimize competition, strengthen their capabilities, and expand their global footprint.
  • Partnerships. In 2020, many BNPL firms focused on forging partnerships with major retail brands to increase their visibility and attract users. In 2021, there was greater emphasis on building partnerships with major payment providers: Last year, Sezzle teamed up with Discover, both Zip and Afterpay struck deals with Adyen, and Affirm tied up with Verifone. These partnerships help providers distribute their solutions to a wider base of merchants and customers.
  • Super apps. BNPL players like Klarna, Affirm, and PayPal (which offers interest-free installments) have launched super apps to become consumers’ one-stop shops for shopping and payments. This might help increase app engagement and user spending.

Related content: Check out our recent report coverage to learn more about emerging BNPL trends.