Steve's ITK

By Steve O'Hear

Steve's ITK: Smoooth-talking

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Steve's ITK

December 13 · Issue #66 · View online

Steve's In The Know: Thoughts from a European tech insider.


Opening thought: Making sense of Klarna
Over the last twelve months, the head of comms at European venture capital firm Atomico has been quite fond of ‘reminding’ me that I had previously turned down the opportunity to interview Sebastian Siemiatkowski, the founder of European ‘buy now, play later’ sensation Klarna.
The offer was first made in August 2019, shortly after the Swedish company closed a $460 million funding round, giving it a $5.5 billion valuation. ‘The company isn’t that interesting to me at this time,’ I allegedly replied, giving him the typical journalistic brush off.
In retrospect, a more apt response would have been to tell the Aussie spin doctor to come back once Klarna’s valuation had doubled. Because that’s exactly what happened, only this time it was me who did the asking.
The resulting piece – an opus, if you will – saw me spend around 2.5 hours talking to the Klarna founder, after we ran out of time during our original allotted hour. It was a robust conversation and hopefully without any of the star-struck pretence of access journalism sometimes on display when billionaire tech founders are profiled.
In fact, it would be wrong to call the 8,000 word article a profile of Siemiatkowski, although it definitely ventures into profile territory. More accurate, the in-depth interview – along with cameo roles from Skype and Atomico founder Niklas Zennström, and financial campaigner Alice Tapper – serves as the narrative device to delve into Klarna’s history and business model, the ethics of a company that offers easy credit, and Klarna’s challenger banking future.
There are also plenty of startup learnings, and, of course, at least one bonafide scoop:
  • Siemiatkowski confronts criticisms head on, including that Klarna makes it too easy to get into debt, and that buy now, pay later needs to be regulated
  • We discuss Klarna’s business model and the balancing act required to win over consumers and keep merchants onside
  • We also learn how, under Siemiatkowski’s watch and as the company began to scale, Klarna missed the next big opportunity in fintech, instead being usurped by Adyen and Stripe
  • The Klarna founder also shares where he believes the puck is skating next as the company ventures further into the world of retail banking after gaining a bank license in 2017
  • And, told publicly for the first time, Siemiatkowski reveals how he once sought out PayPal co-founder Max Levchin as an advisor – including an infamous breakfast meeting in San Francisco – only to learn shortly afterwards that he had started Affirm, one of Klarna’s most direct U.S. competitors. Ouch.
To read the full feature, aptly titled ‘Making sense of Klarna,’ you’ll need to have an Extra Crunch subscription, which is only £5 for the first month. I know paywalls aren’t for everyone but if you want to support the journalism I do, this is by far the best way. And if you need any more encouragement, TechCrunch Editor-in-Chief Matthew Panzarino called the piece an ‘absolute banger’ and the definitive Klarna feature (he may be a little biased, of course!).
Bonus: Which European VC has been spending lockdown in Ibiza?
Things I wrote recently
Cleo, the AI-powered ‘financial assistant’, raises $44M Series B led by EQT Ventures
Papercup, the UK startup using AI for realistic-sounding voice translation, raises £8M funding
Google quietly acquires Dataform, the UK startup helping businesses manage data warehouses
Making sense of Klarna
Outfund, the revenue-based finance provider for online businesses, raises £37M
Getsafe, the European digital-first insurance startup, scores $30M Series B
Monzo, the UK challenger bank, picks up additional £60M in funding
Voi, the European ‘micromobility’ rental company, raises $160M additional equity and debt funding
Primer, the fintech helping merchants consolidate the payments stack, raises £14M Series A
Closing thought: A scale-up tale of two pandemics
My final gig of the year was to moderate a panel for Atomico’s ‘State of European Tech Report’ event. This saw me interview two founders – Klarna’s Siemiatkowski again, and Omio founder Naren Shaam – in order to tease out the most valuable lessons they learned this year during the pandemic and any advice they would give to younger founders today. It was a smart lineup: Klarna has had a ‘good’ pandemic as e-commerce has gone gangbusters, while Omio was hit badly by the global halt in travel but still managed to raise $100 million in additional funding. Both were relatively candid about their experiences.
Overall, the virtual event was a stellar debut from the team at Atomico, and not just because I was asked to take part! It also proved a long-held theory of mine: some conferences don’t need to be nearly as bad as they are. Just pick the right people and put them with the right topics and the right moderators. It sounds easy, but obviously it isn’t.
What I Learned in 2020: A Founder’s Perspective
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