The fintech perfect storm has been brewing for some time now. Beyond the financing crisis for the entire ecosystem –which continues to affect Spain for the moment–, the questioning of some business models has set the trend. Especially the technological ones that came to change the conception of money and traditional banking. Klarna, one of the most pampered startups in Europe, and Bnext, a Spanish fintech, represent the situation. One of them is trying to find a financial solution, the other attacks alternative business models to get out of trouble.
Bnext had been reporting problems for some time. Almost gone from the field of play, each move brought the business one step closer to the abyss. With a release of tokenshand in hand with Bit2Me, fintech pointed to a huge need for capital. Just a few days ago, they announced something that the financial technology world had been avoiding: account maintenance fees. They had to make the business profitable above all else, and it was copying one of the most hated characteristics of traditional banking. Later, Bnext was known to be in active search for partners. One that would buy out most of the company’s capital and allow them some oxygen.
The problem? It’s not the best time to look for a higher bidder, or negotiate with the power at hand, and less so for a fintech sector that has been showing a certain saturation for some time and that has great players. Klarna, which also needed capital a few months ago, ran into precisely this problem.
The case of Klarna, in any case, is much more complex than that of the Spanish experience. The Swedish fintech business plays in a highly reviled sector: buy now and pay later. The deferred payments of a lifetime, but brought to the digital world. The operation, the same as always. Klarna was one of those that led a market that gradually found many rivals. SeQuora, Banco Santander with Zinia, Stripe itself or SlightPay among many others have succeeded in a business that has come into conflict with the crisis.
New business models: the Klarna idea
2022 has not been the year for buy-now-pay-later fintech. In just a few days, Klarna’s valuation plummeted. It lost 86% of its valuation, going from 46,000 million to 6,700. It was a hard blow for a startup that had always enjoyed the favor of capital. The $800 million funding round that the fintech was forced to raise to stay in business, were the toughest in its short life.
It was one of the first signs that something was not going well in the future for the fintech sector. After years of good business in the financial sphere – the low rates were very attractive to clients – the hangover was coming. Which translated into the worst for the economy: uncertainty. It also put a problem on the table: would technology companies be able to survive without private financing? Fed for years with unlimited capital, sooner or later the sector would have to face the harsh reality. The boom years are inevitably approaching those of consolidation in a sector that has yet to be reorganized.
It was not a fall that passed by. In just a few weeks, Klarna of the technological hub project that he had planned for Spain. He also saw his business model questioned in an inflation crisis. Accompanied by the energy crisis and the war in Ukraine. Finally, she did what hundreds of companies in the technology sector have been doing in 2022: fire part of their workforce. 10% of Klarna went to the street overnight. 700 employees that seen the figures of Twitter with almost 3,000 casualties or the 11,000 of Facebook seem few.
Now as a price comparator
Still, Klarna is still trying to save the company’s furniture. With “buy now, pay later” hit hard by investor fears of a debt crisis, fintech has gone into a completely different sector. Specifically that of the search engines and offer comparators.
At the moment, and as announced Bloomberg, Klarna will launch its search tool in the United Kingdom and several Nordic countries, after launching it in the United States, with the aim of diversifying the sources of income. Also to amortize the purchase that the fintech made last year of PriceRunner for 125 million dollars. An acquisition that now represents the pillar of the restructuring that Klarna has been facing for some time. But that, nevertheless, you will find great rivals to take into account in Google or Amazon.