Klarna, Affirm show how expensive fintech growth can be

Now equal in value with Affirm, what can we learn from the Swedish giant's first half of the year?

Just how lucrative is the buy now, pay later (BNPL) market? New data from Klarna and recent earnings results from Affirm make it clear that building a global business in the fintech space is far from inexpensive.

The two companies, Affirm American and Klarna Swedish, are among the most valuable players in the BNPL market today. Both recently reported financial results.

Today we’re looking at Affirm’s earnings for the second calendar quarter of 2022 and Klarna’s for the first half of the same year and asking ourselves what we can glean from each dataset. (And, listen, this is a bit of a slog. If you want to trust our math and skip the currency conversions, just scroll on down to the “Why does BNPL lose so much money?” section.)

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Keep in mind that Klarna was recently repriced all the way down to $6.7 billion in its latest funding round. Today before the opening bell, per Yahoo Finance, Affirm was worth $6.74 billion. The two companies temporarily sporting the same valuation means that we have a firmer foundation to compare them than we usually might. We’ll first talk about their results individually and then in contrast to one another and their shared value.