Klarna is betting big on AI to scale its business and shape its brand as it debuts on the public market.
Chief Marketing Officer David Sandstrom told ADWEEK that AI is now embedded across workflows, and is helping drive $1 million in revenue per employee.
“When we first started with AI, it was more like a party trick,” Sandstrom said, adding that AI is now central to Klarna’s daily operations, powering everything from analyzing customer reviews to designing ad campaigns, as the company is aggressively expanding its AI capabilities.
“The ambition at Klarna to lead AI and AI development is bigger than ever,” Sandstrom said.
Klarna started trading publicly on the New York Stock Exchange on Wednesday, climbing nearly 15% in its debut and valuing the payments firm at nearly $20 billion.
Founded nearly 20 years ago, Klarna earns revenue by taking a small cut of transactions processed through its payment tools, and from interest on longer-term loans and late fees.
Klarna only entered the U.S. in 2019 but has since built a customer base of 111 million, with buy now, pay later and other financial products offered through roughly 790,000 merchants, according to its SEC filings. Over the 12 months ended June 30, the company handled $112 billion in transactions.
Klarna reported a Q2 loss of $53 million, up from an $18 million loss a year ago, while revenue grew 20% to $823 million.
AI at the core
Sandstrom told ADWEEK that Klarna’s overall marketing strategy will continue to use AI.
The fintech firm has leaned heavily on the technology to cut costs—trimming marketing spend by 12% last year while reducing reliance on agencies—a trend Sandstrom says has only accelerated. Use of AI-driven content production in its marketing team has increased asset output by 600%, Sandstrom said.
Klarna has also signed a deal with Google to use its Nano Banana, Gemini, and Veo 3 tools. Sandstrom said AI is now embedded in daily work, from analyzing customer reviews to designing ad campaigns. The company has continued hiring AI-focused roles like prompt engineers even as other fintechs scale back. Sandstrom said the company is developing an AI-powered shopping assistant that can find products and complete purchases on behalf of users.
“The more convinced about AI the less we’re measuring the impact of it,” he said.
Market challenges persist
But Klarna’s public market debut comes as its core installment payments business faces pressure. In the U.S., it trails Affirm by about $4 billion in payment volume, according to EMARKETER.
“The Swedish fintech’s critical mistake stateside was its delay in issuing a BNPL-enabled debit card,” said Katherine Smith, payments analyst at EMARKETER. Affirm launched its “buy now, pay later” debit card two years ago, which helped cement its lead in the U.S. market. The card has been central to Affirm’s in-store push, where spending jumped 187% in the fourth quarter of 2024. Klarna only began piloting its own card in June. The company said it had signed up 685,000 U.S. customers for the Klarna Card since July.
Internationally, Klarna remains the stronger player, reporting $25.3 billion in gross merchandise volume—more than double Affirm’s $10.4 billion. It has also scored partnerships with Walmart, DoorDash and eBay, giving it reach Affirm has struggled to replicate.
Still, Smith said card-linked installment plans from traditional banks are an even bigger threat. Credit card issuers like American Express, Chase, and Citi can offer richer rewards than fintechs, which operate on thinner margins. Klarna has tried to counter with cash-back offers and a partnership with rewards startup Nift, but those perks pale in comparison, she added.
Sandstrom said Klarna is carving out a different path, positioning itself with a more consumer-friendly brand that resonates with women, in contrast to what he described as the “male, transactional” approach of rival fintechs.
link