What does the “Klarna case” mean for N26 and Co

By Heinz Roger Dohms

No other European financial startup wanted to aim as high as Klarna’s “buy now, pay later” revolutionaries, see our giveaway a year ago -> “How Klarna became the hottest fintech in the western world”. What nobody cared about at the time: the Swedes accepted equally adventurous losses for their adventurous growth. Which was also remarkable as Klarna (founded in 2005, not 2015 …) was meanwhile a profitable company, but then the spirit of the time inspired that a player with such potential should never, ever be profitable.

How the story went on is known:

If what the Journal writes is true, then Klarna (a company that was valued at $ 46 billion last year and reportedly wanted to be valued at $ 60 billion earlier this year) is so desperate that the venture capitalists willing to invest no longer offered a $ 30 billion valuation (which was presumably the position in mid-May), but only $ 15 billion !!!

Of course, this doesn’t mean that Klarna is a worse company today than it was a year ago. But it does mean, in Klarna’s terms, that the “buy now, pay later” model could be particularly affected by the looming economic crisis (the share price of publicly traded US competitor Affirm has been around ten times since November). And in relation to the fintech industry as a whole, it means that fintechs that don’t need funding are currently the best.

In view of the German scene, there are four comments on this background:

  1. It’s good that, with the exception of Raisin, virtually all major German fintechs made breakthroughs to a greater or lesser extent last year.
  2. It should be noted, however, that some of these players (Solarisbank bought British competitor Contis for a lot of money, while Trade Republic and Scalable Capital started their tour in Southern Europe) also had pretty big plans with the money.
  3. Ironically, N26 (actually a fintech cash burn par excellence) learned to save during the Corona crisis and then last year as late as possible (in the autumn) a maximum of funding (around 1 billion euros, see our “Second Closing” scoop here) collected. The new bank of Berlin could be a relative winner of the current crisis
  4. Just a reminder: For a long time, Germany’s largest fintech failed to keep its money consumption under control and then suddenly died due to funding. This doesn’t mean that other financial startups have to do the same. But it shows the connection.

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