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Net losses at Swedish payments provider Klarna quadrupled in a bruising first half in which the valuation of Europe’s most valuable private technology plummeted.

The payments company reported a net loss of SKr 6.2 billion ($580 million) from SKr 1.4 billion a year earlier. He attributed the deteriorating figures to rising personnel costs, investments in the integration of Swedish shopping comparison service PriceRunner and rising credit losses. He blamed the higher credit losses on difficulties in signing up new customers with limited credit histories.

Revenue was up 24% year-on-year, driven by growing markets, including the United States, where Klarna has racked up 30 million users, one-fifth of its global total. It has also spread to countries like Canada, the Czech Republic and Greece.

“Klarna operated in a very different environment in the first half of 2022,” said Sebastian Siemiatkowski, CEO and Co-Founder.

Klarna’s difficulties reflect challenges facing the broader buy now, pay later industry as falling consumer spending and increased regulatory scrutiny hit popular credit products, which allow consumers to defer or split payments into multiple instalments.

The value of Klarna shares fell in July to $7 billion. The group has raised $800 million from investors including Sequoia and Mubadala, the sovereign wealth fund of the United Arab Emirates.

Klarna was valued at $46 billion as recently as June last year, following a $639 million funding round led by Japan’s SoftBank, the investment group behind of a disastrous bet on the office sharing group WeWork.

The company cut its workforce by 10% in May, as Siemiatkowski said it would focus on “short-term profitability”. Klarna has not been profitable since 2019.

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