Introduction
The Klarna pitch deck was prepared for the Claremont McKenna College Investment Fund as a TMT allocation focused on global fintech and digital payments. Klarna is a leading Buy Now, Pay Later (BNPL) and payments platform that enables consumers to split purchases into short-duration installments while providing merchants with immediate settlement, traffic acquisition, and checkout conversion tools.
Our investment thesis hinges on Klarna’s evolution from a pure BNPL provider into a diversified, AI-enabled payments and financing platform, alongside a favorable macro backdrop of declining interest rates and rising digital commerce penetration. While investor sentiment has been weighed down by concerns over rising credit provisions and regulatory scrutiny, we believe these risks are overstated and fail to reflect Klarna’s strategic shift toward Fair Financing, shorter loan durations, and AI-driven underwriting that has materially reduced delinquency rates and stabilized write-offs as a percentage of GMV.
To grow revenue, we modeled Klarna’s GMV expansion in line with global BNPL adoption trends and consumer spending recovery, while holding merchant take rates relatively stable due to Klarna’s strong pricing power and dominant checkout placement. Importantly, Klarna’s revenue mix is shifting toward higher-margin merchant fees, advertising, and interest income from Fair Financing products, supported by a rapidly expanding merchant network and daily user engagement. Additionally, Klarna’s aggressive use of AI has driven substantial operating leverage, with operating expenses declining even as revenue compounds at a double-digit rate.
Our valuation assumes continued market share gains versus peers such as Affirm and PayPal, normalization of credit loss perceptions, and a closing of the EV/Sales mispricing gap as Klarna demonstrates sustainable profitability and pre-IPO regulatory readiness. We view Klarna as a structurally advantaged platform positioned to benefit disproportionately from both easing financial conditions and long-term shifts in consumer payment behavior.
