- Klarna’s Sebastian Siemiatkowski and Victor Jacobsson are billionaires after a fund raise in March.
- The pandemic has led to a boom for “buy now, pay later” firms like Klarna.
- With the Klarna cofounders, five BNPL founders have become billionaires in a year.
- Visit Business Insider’s homepage for more stories.
When Swedish fintech darling Klarna raised $1 billion in March at a valuation of $31 billion, it propelled two of its cofounders to billionaire status. CEO Sebastian Siemiatkowski and former CFO Victor Jacobsson are worth $2.2 billion and $2.7 billion respectively, per Forbes.
Klarna, founded in 2005, is one of the top “buy now, pay later” firms, which allow customers to make online purchases in installments. It has 90 million customers worldwide and topped 11 million users in the US in November. It has added a slew of brick-and-mortar partnerships during the pandemic, including a five-year contract with Macy’s inked in October.
Five founders in the BNPL space have reached billionaire status during the pandemic. Many BNPL firms have thrived during the pandemic due to a boom in ecommerce and the economic recession. Consumers strapped for cash can use BNPL to purchase products, whether it’s a $1,000 Patagonia fleece or groceries, that they couldn’t afford otherwise.
An analysis conducted by Cardify.ai, which uses data from mobile rewards platform Drop, found that 21% of BNPL users did not have enough funds to cover the full price of their purchase. Before the pandemic, 61% made less than $50,000 pretax; that has since jumped to 70%, with 6% reporting no income at all. Those who lost part or all of their income increased their BNPL spending the most.
“To some degree, the threat from these guys in Seattle to the whole industry, I think, is quite fun,” Siemiatkowski, 39, told Insider in October, referring to ecommerce giant Amazon. “It’s creating this sense of urgency and a willingness to experiment and be more open.”
This past July, Afterpay cofounders Nick Molnar and Anthony Eisen became billionaires with their respective 20.5 million shares. Molnar, only 30 years old at the time, is Australia’s youngest self-made billionaire. Their stakes are each worth about 1.8 billion AUD (nearly $1.4 billion) based off Afterpay’s stock price on April 6. The Australian firm’s stock has risen more than 500% since the country began rolling lockdowns in March 2020, and it hit 5 million active shoppers in the US in May, only two years after entering the market.
In January, Max Levchin, cofounder and former CTO of PayPal, became a billionaire with the IPO of his fintech company Affirm. He owns 27.5 million shares of Affirm, according to its S-1, worth about $2 billion with a close price of $73.00 on April 6. (Affirm declined to comment on a prior version of this article.)
This isn’t Levchin’s first windfall. A member of the so-called PayPal mafia, he left that firm shortly after it sold to eBay in 2002 and a few years later founded Slide, a billings company. Google acquired Slide for a reported $182 million in 2010. Levchin was also an early investor in Yelp and owned 2.7 million shares (worth $110 million today) as of his most recent SEC filing, dated September 2016.
Affirm’s revenue for the fiscal year ending June 30 surged to $509.5 million from $264.4 million the year prior, with Peloton accounting for about 28% of its total revenue. Affirm’s S-1 acknowledged that losing Peloton as a partner would “materially and adversely” impact its financial condition and future prospects. Peloton has seen a 172% sales increase in its most recent quarter, thanks to homebound customers wanting to exercise at home. It is uncertain if this trend will last, but for now, shoppers wary of in-store browsing are boosting Peloton and Affirm’s revenue.
As for Affirm’s competitors, Levchin is confident that his firm has the best technical chops in the BNPL space.
“I believe we are the only truly engineering- and technology-first company,” he told Insider after the IPO in January. “A million transactions a year, a million transactions a day, we will be there.”
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