Klarna’s plans to go public may need to be on standby.
The Sweden-based fintech company has reportedly had a loss of $99 million in Q1 2025, according to Tip Ranks. In comparison, it saw a loss of $47 million in Q1 2024. There are several reasons for this decline. For one, customer credit losses increased by 17%, totaling $136 million, according to its Q1 report. However a spokesperson told The Tab this statistic was to be expected.
“Bear in mind that we made 13% more loans than a year ago so, all else being equal, you’d expect credit losses to increase by at least 13%,” the spokesperson mentioned.
Klarna And Artificial Intelligence
While Klarna replaced human roles with artificial intelligence (AI), as AFROTECH™ previously reported, this decision was driven by a desire to increase operational efficiency and reduce overhead. As a result, 700 customer service representatives were replaced with tools that leveraged OpenAI. Tip Ranks notes that this move did help the company meet its goal of lowering service costs. Additionally, AutoGPT states that the company is now earning $1 million in revenue per employee, up from $575,000 in Q1 2024. However, integrating the technology negatively impacted the user experience. Klarna is now looking to reduce its reliance on AI and rehire some customer service representatives.
Still, Klarna remains optimistic about AI, and its business model — which includes partnerships with Walmart, DoorDash, and eBay — appears to be working, with its active user base reaching 100 million (an 8% year-over-year increase) and revenue rising 13% to $701 million.
“The momentum is undeniable—and this is just Q1! Klarna has reached 100 million consumers and secured exclusive partnerships with major retailers like Walmart through OnePay, teamed up with DoorDash, and expanded our partnership with eBay to the U.S. after multiple successful European launches,” Co-Founder and CEO Sebastian Siemiatkowski said in the Q1 2025 report. “Our AI-first strategy is driving exceptional returns, we’re outpacing competitors, our merchant network is scaling rapidly, and our next-gen products are reshaping money management for millions.”
Is Klarna Shutting Down?
Klarna previously anticipated an IPO, but those plans are currently on hold due to tariffs imposed by the Trump administration, notes The Wall Street Journal. A spokesperson confirms the company’s losses are a result of the IPO rather than not receiving payment from its customers.
“The main reason we made a loss was a one-time share payment to employees related to the IPO, not credit losses. Excluding this payment, depreciation and restructuring costs, Klarna made an adjusted operating profit of $3m for the quarter,” the company told The Tab.
Will Klarna be shutting down? A spokesperson has confirmed it will not be shuttering its business — nor will it go bankrupt — and doubles down on the company being “financially healthy,” notes the outlet.
As it looks ahead, the company intends on “closely monitoring changes in the macroeconomic environment” and “remains well-positioned to adapt swiftly if required,” according to the Financial Times.
Does Klarna Help Build Credit?
Klarna will continue to operate as a financial tool that can benefit users looking to build or improve their credit. While the platform primarily performs soft credit checks, which don’t impact your credit score or appear on credit reports visible to lenders, it still encourages responsible borrowing, its website mentions. Making payments on time and maintaining a positive repayment history can help strengthen your credit over time. However, borrowing more than you can afford and accumulating a record of late payments can still negatively affect how lenders view you.
