Interview with Sebastian Siemiatkowski, CEO of Klarna Bank AB.

6th April 2018  

U-Start Team carried out an exclusive interview with Sebastian Siemiatkowski, CEO of Klarna Bank AB.

In 2005, Sebastian Siemiatkowski co-founded Klarna in order to provide safe and smooth online payments. He currently serves as its Chief Executive Officer. Over the past decade, he has overseen the company’s rapid growth across Europe and more recently into North America. Klarna is a now fully licensed bank with 60mn consumer and 70,000 merchant user base. Sebastian has received multiple awards for his leadership, including runner-up in the 2015 global EY Entrepreneur of the Year award, Leader of the Year by Adecco, and European Entrepreneur of the Year Award by TechTour. He holds a master’s degree from the Stockholm School of Economics.


Could you tell us a little bit about your career?

I started my professional life trying out a number of different things, including traveling around the world without flying, but it was while I was studying at the Stockholm School of Economics the idea of Klarna was born. Since then there has not really been much room for anything else than Klarna, which is great, as I have had the privilege to grow along with the company.

What are Klarna Bank's business model and services? 

Klarna offers innovative payment solutions that make shopping as smooth as possible. We build value-adding relationships with merchants by increasing conversion, average order value and sales while creating a superior consumer experience. We offer a number of different payment types including direct payments, pay after delivery options and installments plans which enables consumers to pay when and how they prefer.

Tell us about the early days of Klarna Bank, what sparked the idea?

The initial business idea, offering consumers to pay after receiving the goods, actually has some of its roots in the mail order catalogue. We introduced this offering to the market at a time when consumers were hesitant to shop online as it was widely regarded as unsafe, complicated and frustrating. Separating the payment from the purchase solved for that, and invoked trust for the consumer, as you wouldn’t pay for the goods until you knew you wanted to keep them Since then, our product offering has developed as e-commerce has become so popular and widely used.  The growth in different types of digital payments has been enormous, Fintech’s have been a hugely disruptive and positive force in changing the retail payments industry across the globe. What has not changed though is that consumers and merchants want simple, safe and smooth online payments which is as relevant today as it was back when we founded the company.

Today Klarna Bank is one of Europe's largest bank, provides payment solutions to 60 million consumers across 70,000 merchants in 18 countries. What do you think are the secret ingredients to Klarna Bank's success?

The importance of talented and committed people who work towards the same goal is unbelievably powerful. As the entire banking value chain is being challenged, the payments sector has seen possibly the greatest transformation. Klarna has played a role in accelerating that change but now as a consumer-oriented, product driven and technology intensive bank, we will have the competitive edge and tools to truly change traditional retail banking. The next generation of banks emerging know how to meet evolving consumer needs, drive efficiencies and deploy agile solutions. The opportunities to have real impact and bring tangible benefits to the consumer, businesses and society are great. It is a very exciting prospect. We can't get comfortable, we need to keep challenging ourselves to stay innovative and continually evolve our product offering.

You recently received a banking license from the Swedish Supervisor Authority, this will obviously open up for new opportunities, how are you planning on capitalizing on that?

The banking licence gives us possibilities to expand our product portfolio and offer even better services to our customers. We will continue to do what we do best, offer innovative consumer centric financial products focusing on making payments as smooth as possible.

You recently entered the UK market, what are your thoughts on Brexit in relation to Klarna Bank's services and expansion plans?

Since the terms and conditions of the UK leaving the EU are still to be negotiated we will have to wait and see before we can conclude on its impact on our business in the UK. We have benefitted hugely from EU Single Market but complexity does not daunt us and we will solve for this. We are seeing some very strong growth trajectory in the UK and major merchants partnerships, it's a vibrant e-commerce market.

What advice would you give to an entrepreneur you wish you would have known at the beginning of Klarna Bank?

Don’t give up. Persevere. We were told many times that our idea would not succeed but we believed in it and here we are today. Don’t underestimate the value of good advice along the journey. 

As the CEO of Klarna Bank what have been the greatest challenges you have had to face until now and how did you overcome them?  

I think the greatest challenge has actually been to keep up with the growth of the company product, market and staff wise. It sounds like a luxury problem but it has been challenging at times to keep everyone and everything moving in the same direction. 

Fintech is becoming an even more aggressive sector in Europe, what will be the next big trend in the Fintech market according to you?

I am not sure one single thing but certainly can see number of things on horizon and it’s exciting. Form factors of payments in all contexts will evolve. Personalisation and omnichannel, we are already at this point but they will just grow and grow. Overall, how AI will be leveraged is such exciting prospect.

Klarna Bank is one of Europe’s few tech unicorns, what factors do you think play a role in why many European unicorns come from the Nordic? 

It’s true that Sweden and the Nordics have produced a number of unicorns and very proud to be part of that club. There is a strong start-up environment and encouraging entrepreneurship. With regard to Sweden, I strongly believe the strong educational system has been instrumental but also smaller things like general access to the internet and home computers policies were key enabler. Swedish companies also tend to develop with an international outlook from early on in order to scale and grow.