Due to rising interest rates and inflation, lenders are more reluctant to invest in technology companies. If tech startups are raising money at all, they need to make it an often lower valuation.
The Swedish fintech company Klarna by CEO and co-founder Sebastian Siemiatkowski, on the other hand, is doing really well. The group, which allows users to pay for their redemption in online stores later or in the long run, so that its valuation fall by 85 percent.
Lots of air in appreciation Klarna
The company has for years been considered the largest on the continental Europe Unicorn, or the highest rated private startup. During a money round last summer, lenders valued the company at $ 45 billion and in February, Klarna was even worth $ 60 billion.
Too much air, it turns out, because this week it turned out that there were only 6.7 billion left of the sky-high valuation. This shocking figure emerged when Klarna announced a $ 800 million investment.
CEO Klarna reacts horribly
Sebastian Siemiatkowski was quick to put the blame on the media. In a twitter thread drew in the Trump card by pointing to a number of “facts that the media could omit from the coverage.”
Siemiatkowski then came, not surprisingly, with a flurry of positive numbers about Klarna. It was not that bad at all, he would say.
Still, Siemiatkowski could not hide that it felt ‘strange’ that Klarna was suddenly almost back to its valuation of 2019, where the company was 5.5 billion. ‘What does not kill you makes you stronger‘, the 40-year-old entrepreneur quarreled.
Child of migrants
Siemiatkowski’s fighting spirit is probably due to his parents, who in 1981 immigrated to Sweden from communist Poland. His father studied for a doctorate in his own country before eventually becoming a taxi driver in Sweden. His mother was an academic but had to retire early due to back problems.
I wanted to use my potential because I saw that my parents had failed
“I’m sure something in me said I just wanted to reach my potential when I saw that my parents had not been successful,” Siemiatkowski said in 2020.
Reads business books as a 12-year-old
Siemiatkowski grew up in Uppsala, a city north of Stockholm. In his childhood, he was constantly encouraged by his parents to get the best out of himself. Siemiatkowski took it in stride and tried hard in school. While most 12-year-olds read comics, Siemiatkowski studied business books by Virgin entrepreneur Richard Branson at that age.
In 2000, he moved to Stockholm to study economics at the Stockholm School of Economics. At the time, Siemiatkowski baked burgers at Burger King, like a side job. He talked to his colleague Niklas Adalberth, who also turned out to study at the Stockholm School of Economics. Together with Adalberth and fellow student Victor Jacobsson, he founded Klarna in 2005.
Idea for Klarna during sabbaticals
The idea for buy now, pay laterstartup came to Siemiatkowski when he took a sabbatical as a 23-year-old to gain experience with a debtor firm. He got to know all kinds of e-commerce entrepreneurs and quickly saw an opportunity in the market.
The advance of e-commerce in Sweden did not go so smoothly because the Swedes were suspicious. “People thought, what if I do not receive it, what protection do I have then?” said Siemiatkowski. “It was their payslip they gave for something they had not seen.”
Investors said: forget it. This is never going to work.
If only he could pre-finance that amount, then customers would only have to pay for the product later. Wouldn’t that be a good idea, Siemiatkowski wondered. Adalberth and Jacobsson thought so.
But when they presented the idea to investors during a pitch day, they got no response. “They said, forget it. It’s never going to work,” Siemiatkowski said.
Then he decided to drive around all of Sweden in an old Volvo to present his plan to e-commerce entrepreneurs. They turned out to be ‘very open’ to the idea, which Siemiatkowski immediately got a first trio of customers with.
The three decided to work full time at their startup for six months to see if the idea had any chance of succeeding. The work area had no air conditioning, but that did not stop her. On hot days, they just worked in their underwear.
They could not sustain their almost nudist existence for a long time, for Klarna quickly became so successful that twenty people worked in the office. Completing his master’s degree in economics was no longer an option for Siemiatkowski. It made his parents unhappy. When he told his parents about Klarna, they primarily wanted to know when he would finally finish his studies.
Insufficient appreciation from parents
Siemiatkowski still feels he is not getting enough appreciation from his parents, he sighed in 2020. ‘To some extent, I am still looking for the recognition that I will never get from them. So I have to learn to be happy myself ‘.
It will be a little consolation for Siemiatkowski that his startup has grown into one of the most successful technology companies ever from Sweden. Klarna has so far raised $ 4.5 billion from investors, including rapper Snoop Dogg. More than 147,000 people use Klarna’s software, and Siemiatkowski has 5,000 people working for them.
In his public appearances, Siemiatkowski seems to rock star entrepreneur– wants to convey a feeling. The blonde entrepreneur poses for photos in fashionable jackets and suits, allowing him to continue as an actor or singer. Or, as Elle magazine puts it, he looks like a “Disney version of a tech entrepreneurial prince.”
You have to say no to many things. I do not watch Netflix or HBO.
Because of her entrepreneurial existence and parenthood, Siemiatkowski lives a far from quiet life. “You have to prioritize,” he said in 2018. “You have to say no to many things. I do not watch Netflix or HBO, even though I watched Game of Thrones. I spend time with my friends and family and I work. That is the life I have chosen ‘.
It is likely that the ‘work’ factor will prevail in the near future. That nearly 90 percent lower valuation is something a contentious person that Siemiatkowski will not accept. He wants to move forward. It is true,’what does not kill you makes you stronger‘.