“We want Clarne to be the manager of the bank in the old style – in the age of digital technology,” – says the boss.

For millions of young online shoppers, the lexicon includes the verb “to Klarna,” which means buy now, pay later.

The Swedish tech company is one of a select group of companies, including Hoover and Google, whose names have become synonymous with their products and services.

However, for Sebastian Siemiatkowski, the 40-year-old founder of Klarna, it is a double-edged sword, as his firm has also become a lightning rod for criticism of the industry.

Solution: Sebastian Semyatkovsky says the London float is now more likely

Regardless of the rights and mistakes, Klarna is indeed a very large business, valued in a recent round of funding at $ 46.6 billion – or £ 35.5 billion, which is much more than Barclays, just over £ 26 billion. And this despite the fact that Klarna loses.

Semyatkovsky’s 7 percent stake in the company, which he founded in 2005 at the age of 23 with two friends, is worth more than $ 3 billion. This gave him, his wife Nina and their three children a life that would have been fantastic if he had come as an “immigrant child” from Poland with his parents, who divorced when he was eight.

“We didn’t go hungry, but sometimes there weren’t many,” he said.

“My dad was an alcoholic and a drug addict, and it ended, unfortunately, very badly. I myself had a problem with alcohol. I have been sober for ten years, I am a sober alcoholic, ”he says.

“My father committed suicide because of an illness that was obviously a very difficult experience, but my mother is still alive. She took care of us, the two kids, and she had back problems, she was pretty sick. People are impressed with my work, but they should be impressed with her work. ”

He says that subconsciously parents’ quarrels about money aroused interest in business. As a teenager, he buried his head in books by entrepreneurs such as Sir Richard Branson and Ingvar Kamprad, the founder of Ikea.

Eureka’s moment for Clarna came to him a year after working at the Stockholm School of Economics, when he got a job selling factoring and receivables to small firms.

He realized that businesses have problems with e-commerce payments, and this has led to the idea that the old-fashioned catalog installment method can be applied to online retail.

He created Klarna with two co-founders, Victor Jacobson and Niklas Adalbert, but is the only one of three still working for the company.

“A few weeks ago I found an old letter written by my co-founder. It’s like, “Hey, I’m sitting here, really late at 11:00 pm… and I think if it really works?” What if we expand into Europe and the rest of the world? What if we start to compete with the banks for real and give them a hard time? Wouldn’t that be weird? ‘

“I don’t think I got an answer, probably they thought I was crazy.”

It turned out not so crazy – the company now has 5,000 employees and it operates in 20 countries, it has 147 million customers and 400,000 retailers. Among the security guards are Sequoia Capital, one of the major players in Silicon Valley, as well as SoftBank of Japan and the British private investment house Permira.

Its expansion had a price: losses rose to 6.58 billion Swedish kronor ($ 688 million) last year from 1.63 billion earlier as it “significantly accelerated” its global spread.

He believes the UK has huge potential in post-Brexit technology. “You will create a financial center that will be the best in the world, and Brexit will help you with that. There are so many [EU] legislation that is not justified, it was prescriptive and was poorly written. ”

It is planned that in the next few years it will be implemented. So will it be in London or New York?

“I am very, very impressed with what I see in Britain on many levels,” he says. The U.S. tech market, Nasdaq, has a “deeper pool of investors who understand technology,” he says, but he praises the UK government’s efforts to make the city more attractive to tech entrepreneurs.

“I don’t know where we end up on the list, but it’s more likely to be London than two years ago.” His goal for the next few years, he said, is to move away from buying now, pay later and take on big banks.

“They focused their innovations on pocket money, not on helping customers, because there just wasn’t enough competition.

At some point in the future you will wake up and your computer financial assistant system will say, “I’ve analyzed your mortgage and I can save you so much every month” – the only thing you need to do is say yes.

“We want to be this digital assistant. This goes back to the original bank manager who took care of your finances and helped you. Somewhere along the line it went wrong. We want it back. It may sound utopian, but I’m definitely going to push Clarn in that direction. ”

Some are not convinced. “Klarna is unprofitable, but it is valued more than Barclays – it does not add up,” said one senior financial official. “Some of their users are conducting multiple purchase transactions now, paying later on the go with various companies. People are accumulating debts, and this is a scandal. ”

Klarna has certainly grown in the UK with 16 million customers and 20,000 traders.

The most famous product is “Buy Now, Pay Later” where customers pay for their purchases in three installments, although it also offers a “pay now” product and the ability to pay the full amount within 30 days.

No interest and fees – Klarna earns money by charging merchants.

Semyatkovsky’s arguments that Clarn is the responsible face of the loan, not everyone is convinced. Buy now, pay later, has angered some campaign participants, including Labor MP Stella Crisis, who called it “the next Wonga waiting to happen”, referring to a payday lender that went bankrupt in 2018.

Klarna’s products are currently not regulated by city observers, the situation, according to Semyatkovsky, is not ideal. “I believe in competition, but I’m not an anarchist. In our industry, we believe that the fact that it is completely unregulated can lead to negative results for consumers.

He claims that Klarna’s bad debt losses are “about 30 percent lower than the standards of the credit card industry.” For me, this is one of the proofs that we lend more responsibly. ”

He adds: “In the UK, losses have fallen over the last few years, and the total problem debt is less than 1 per cent.”

But surely Klarna encourages people to shop more or buy more expensive items than they could?

“Usually we expect the average order value to grow by about 40 percent and conversions by 20 percent more, which is 20 percent more sales,” he says, which is, in other words, “yes.”

Semyatkovsky is unlikely to win over critics who say his products are a social threat. If he can really bring back the manager of the old-style bank, albeit in digital form, then Clarne could just shake up the big banks on the street – although there will be a lot of pitfalls along the way.

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“We want Clarne to be the manager of the bank in the old style – in the age of digital technology,” – says the boss.

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