Klarna’s global CEO Sebastian Siemiatkowski has resigned as a director of his company’s loss-making Australian arm following a clean-out of the local board.
Siemiatkowski and two other directors – Knut Frangsmyr and Professor Bruce Cowley – who signed off on the disastrous 2021 financial accounts of Klarna Australia Pty Ltd are clearing the decks for new blood to take over the board.
As previously reported in Banking Day, Klarna Australia Pty Ltd reported a net loss of A$56 million in the 12 months to the end of December last year, leaving its balance sheet with a net asset deficiency of $70 million.
Klarna’s local business has struggled to dent the market dominance of Afterpay and Zip in the buy now pay later market and is continuing to trade only with the explicit financial support of its Swedish parent.
In 2021 Klarna Australia Pty Ltd generated top-line revenue slightly above $3 million even though more than $27 million was spent on marketing and advertising.
Klarna has also been promoted to Commonwealth Bank customers via the bank’s internet and mobile distribution channels.
Responsibility for turning around the local subsidiary’s performance now rests with a two-member board that took control of the business on 10 November.
According to ASIC records, Klarna’s Aussie arm is now overseen by global chief operating officer, Camilla Giesecke, who is based in Stockholm.
The other director is Sydney-based Katrina Ang, who is currently also a director of Stocard Australia, a digital loyalty card management service that is also wholly owned by Klarna.
Before joining Klarna’s operation in Australia, Ang worked in senior marketing roles at Zip and Westfield.
Klarna’s investors, which include CBA and venture capital funds such as SoftBank and Sequoia, will be hoping that the local BNPL business can match the performance of Stocard.
Accounts lodged with the corporate regulator show that the Stocard subsidiary was cashflow positive last year and turned a bottom line profit of $180,000.
Stocard also generated revenue of $5.7 million, which was much more than the Klarna-branded BNPL business.
The marketing budget for Stocard in Australia was less than $83,000 in 2021.