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Klarna to raise fresh cash at slashed $6.5B valuation
- spaceman_2020 4y ago> But if completed, it would represent a huge discount on the company’s valuation when investors led by an arm of SoftBank Group Corp. Why is it that SoftBank somehow always manages to buy the top?
- toomuchtodo 4y agoExuberance + deep pockets. When you are unconstrained, it is easy to be less judicious about investments. I very much enjoyed Matt Levine's take on how exuberant Masayoshi Son is. https://www.bloomberg.com/opinion/newsletters/2019-10-23/money-stuff-how-do-you-like-we-now https://www.bloomberg.com/opinion/newsletters/2019-10-23/mon...
- imtringued 4y agoBut deep pockets would suggest that you have more.momey to spend on negotiations. A one billion investment justifies spending a million on the negotiations.
- malthaus 4y agoSoftBank will end up being the reverse Berkshire Hathaway: Started (accidently) with a lot of money, consistently investing at the top, or in failed hype-projects, in things they didn't understand and end up mostly being negative signalling
- hn_throwaway_99 4y agoMy thought exactly. If it were possible to short private companies I would just look for whenever SoftBank leads a round at a nutso valuation.
- tempsy 4y agolol plenty of frothy public cos you could have shorted down 80-90% since beginning of the year don’t need to find private ones…
- paulpauper 4y agohow does it still exist and have money left after so many huge failures
- puranjay 4y agoIt mad wild, wild money through a massive single investment: Alibaba. Its been searching for the next Alibaba since.
- missedthecue 4y agoI've thought about this too and I think it's because their strategy is structurally flawed. Their focus is on new/newish tech companies, but they don't make $3 million investments. They want to make $3 billion investments. But when you're buying stakes that size in companies that aren't yet mature, you're almost necessarily going to be chronically overpaying. There just aren't many 4 year old companies that actually have real upside when you're buying in at a $100b or $200b valuation. When you're making investments that big, you've got to go back to value investing like Warren Buffett or the Norwegian Sovereign Fund. That's the only place to sustainably put billions to work. And you'll have to accept the 8% annual returns that come with it.
- im3w1l 4y agoIf you have that kind of money and you want to invest in newish tech, then you have to accept the fact that your investments will move the market and make that work in your favor. Retail can buy a share here and there but you cannot. So how to make it work in your favor? Ask yourself "who can make productive use of this much money? who needs this much money to even be viable?" And it will be really capital intensive moon-shot type stuff. Self driving cars for instance, but that might already be overcrowded now. AGI in general too, that's kind of a more uncertain bet. Europe needs a shitton of energy investment now, both for geopolitical reasons but also to charge all the electric cars they will start buying soon. Building those nukes or solar+batteries can easily absorb hundreds of billions of dollars. Then there is medicine and biotech but that might take a lot of savvy to capture the value you create by spending on r&d. But like nanobots and brain coprocessors and immortality and stuff that is something we will eventually build and it's not that out of reach. Might wanna figure out some intermediary profitable goals. In summary take a long hard look at what Musk is doing. Except maybe his twitter persona. Edit: Might wanna take a look at Gosplan too. After all a sufficiently rich investor is indistinguishable from a plan economy planning committee.
- stewartmcgown 4y agoMusk is a textbook fraudster who is pioneering fake ideas, especially going to Mars. The maths provided by SpaceX for the Starship just do not translate into good astrophysics.
- blueyes 4y agoI met Masa personally a couple times, and used to know several people in his inner circle. The reason why Softbank buys at the top is because they do not have good internal filters to judge technology. "Masa invests in cr*p," one of them said. They want the prestige of investing in the best tech companies, and to them, that often translates as "the most overvalued startups with the most media attention." Their LPs know even less about tech than they do, so who's going to stop them? For these reasons, Softbank is incapable of making contrarian bets on undervalued companies, and always puts money behind the startups that have already raised too much, too soon.
- ilrwbwrkhv 4y agoKlarna and affirm are the next gen of bullshit companies. Like Uber and WeWork before it. Absolutely massive scams fed with easy money and dumping on the next fool.
- tootie 4y agoThey're all real business with real value. I blame the VCs who kept feeding them endless amounts of capital when they were clearly hitting a ceiling of how much value they could generate.
- hef19898 4y agoWhich is said for Klarna, because there seems to be an actual market for what they do. Using cheap VC money ruined a perfectly fine market opportunity, and a chance to build a sustainable business. Well, I think we will see a lot more of those in the next months.
- eurasiantiger 4y agoKlarna is notorious for privacy violations. For a good while it was possible to pretty much doxx any of their users just by entering some of their details in any Klarna-enabled online store. If my memory serves, they may even have had a ”which of these similarly named persons are you” dropdown at some point…
- hef19898 4y agoOh dear... Never really bought through them, just saw them all over the internet as a payment option...
- solarkraft 4y agoI once checked them out (or a provider they had bought, might be "Sofort") when all other options seemed worse. IIRC I would have had to log into my bank account through them, giving them my login data and letting them read all of my transactions (data they use to gauge trustworthiness, I think). I was shocked that that's legal and amused to find out it probably isn't. (Disclaimer: Highly anecdotal, it was multiple years ago)
- syspec 4y agoThat's just $36M per month for 18 months!
- arberx 4y agoAll these fintechs are completely overvalued. Chime is the most notable in my eyes
- rvz 4y agoKlarna is absolutely over-hyped, overvalued and a glorified bank and a complete scam. It also seems that an investor unloaded their shares worth $7.6m a year ago [0][1][2] at a $48B valuation to get retail sucked in and investing at that valuation on a crowdfunding platform. Fast forward today, those 6,971 new investors have lost money as Klarna is on a series of downrounds; now at $6.5B. Now that is what I call a magnificent exit scam that Crowdcube has done, which retail once again loses and becomes the bag holders. [0] https://www.crowdcube.com/cubex/klarna https://www.crowdcube.com/cubex/klarna [1] https://milled.com/navia/klarna-pitch-is-launching-tomorrow-M8Nu5U_wMFBssK4b https://milled.com/navia/klarna-pitch-is-launching-tomorrow-... [2] https://www.thetimes.co.uk/article/online-investment-platform-crowdcube-secures-allocation-of-stock-in-fintech-firm-klarna-cct7phr0w https://www.thetimes.co.uk/article/online-investment-platfor...
- dmitriid 4y agoSomething tells me you're confusing an actual business (Klarna) with someone offloading shares through Crowdcube.
- rvz 4y agoNope. They are both scams. One being a platform for larger investors facilitating and dumping on retail and a debt collector masquerading as a 'friendly' interest-free and financing platform for consumers with soft credit checks. So yes, both are scams.
- greatgib 4y agoHopefully, the investment round in Crowdcube was cancelled as they had "issues issuing the share in a timely manner". So Crowdcube users were saved by chance!
- deleted 4y ago[deleted]
- palcu 4y agoI tried getting into the Crowdcube investment round, but after they got the allocations, the whole deal fell through and I was refunded. Needless to say I’m pretty happy they didn’t take my money in the end.
- firstSpeaker 4y agoThey had a valuation of ~ $17B not long ago. Does it mean more layoffs? I hope not.
- neonate 4y agohttps://archive.ph/RrXG4 https://archive.ph/RrXG4
- tempsy 4y agoWow Affirm’s stock has literally gone down more than 90% in 7 months or so. Crazy.
- paulpauper 4y agoi can affirm that. was $170
- spaceman_2020 4y agoDon't look at Peloton's charts. Most of these make BTC look like a safe haven
- whymauri 4y agoPeloton feels like the 2020's GoPro
- l8nite 4y agoYea. My equity has been dismal. The benefits are fantastic though.
- parkingrift 4y agoBuy now, pay later would never have left the drawing board if interest rates weren’t artificially low for so long. Who wouldn’t want to to take a 0% interest loan in a bull market? All the investors burned by BNPL nonsense have the Federal Reserve to thank. Making winners and losers every day. But it’s a free market still, because it sounds cool to say it muh man!
- thsijustin 4y agoAll while admitting they don’t know anything: Powell was recently quoted as saying "We understand better how little we understand about inflation.” The authority and respect the last generation commands needs a real challenge. Substantive change and not just chanting “disrupt” while playing the same game. Their figurative identities should not be sacrosanct.
- throwaway45631 4y agoWe need a new word for de-unicorned startups. I‘m visualizing a unicorn that after a second look turned out to be a mule with litter stuck on his head…
- moogly 4y agoWhy not just "ass"?
- tschellenbach 4y agoWell that's one way to wipe out your common stock holders. Later rounds probably have some sort of down round protection. So this is probably terrible for founders and employees.
- bogomipz 4y agoA year ago this company raised $639 million. Additionally, the article states the company makes it's money from fees paid by retailers: >"Instead of charging consumers interest, Klarna takes a fee from the retailers." This suggests they're not subsidizing their customers with VC money in the same way that cheap Uber rides did. Can anyone say why they are they trying to raise more money almost exactly a year after raising the kind of money they did? Are they simply trying to squirrel away some rainy day money or did they burn through most of that $639 million already? If the latter why is this such a capital heavy business if the model is based on retailers paying fees to the company?
- Nextgrid 4y agoIt's probably still a "growth & engagement" operation where most of the money is pissed away in marketing and building an engineering playground to solicit further funding rounds.
- throwaway65471 4y agoThis is a good question and even as an employee i do not know. The company made a few acquisitions (google them), then there was the huge USA launch where they spent lot of marketing money (super bowl ad, chicago bulls etc.) They also started a lot of projects / markets to see what works. The sad part is, unlike silicon valley the employee salaries were still quite low, they do not discuss plans with the employees, they only hire juniors and management does not share any numbers / overall plans with the employees. Even after last round of layoffs we were told that all is good. Now, we hear that company is seeking fresh funding after raising more than half a billion last year!
- imartin2k 4y agoIf you want to keep track of how the Klarna story evolves - and also other startup & tech news from Sweden - I allow myself to recommend my free newsletter http://www.swedishtechweekly.com http://www.swedishtechweekly.com. I apologize for the spammy nature of this comment, but I know some of you will actually appreciate this one.
- neinnonyet2 4y agoAnybody get tired of reading the opinions of what must be 13 year olds pretending to know something about multi-billion dollar business valuations? X happened and I knew all along it was obviously going to happen.