Klarna and Affirm Report Successful Quarter

Welcome back to The Interchange, where we take a look at the hottest fintech news of the previous week. If you want to receive The Interchange directly in your inbox every Sunday, head here to sign up! Due to the U.S. holiday, this is an abbreviated edition.

Buy now, pay later comeback

Both Klarna and Affirm, known for their buy now, pay later businesses, unveiled their quarterly results this week, and the numbers did not disappoint.

Affirm reported that its fiscal first-quarter revenue grew 37% year over year to $497 million as gross merchandise volume increased 28% to $5.6 billion during the same period. This news led to a substantial stock boost, with shares climbing to $27.16 on November 9. However, the stock saw a slight decline on November 10, trading just over $22 that afternoon.

Meanwhile, Klarna reported revenue of 6 billion Krona ($549.9 million), up about 30% from 4.6 billion Krona ($421.6 million) in the third quarter of 2022. The company also reported an operating result of 130 million Krona ($11.9 million), a significant improvement from the 2.12 billion Krona ($192.6 million) loss a year ago.

Both companies also reported reduced delinquencies, indicating lower losses from missed payments. This is positive news for both companies and the industry as a whole.

Klarna also confirmed its move toward an initial public offering, a topic covered in detail by Alex and the team. They discussed the potential implications of successful IPOs in raising capital. Read more.

Weekly News

Reporter Annie Njanja provided an update on Flutterwave, following the company’s legal challenges in Kenya. A court ruling cleared Flutterwave of accusations by the Kenyan government, and Annie breaks down the details.

Mary Ann and Alex Wilhelm discussed positive developments in the fintech industry on Equity, focusing on recent mega-rounds and Klarna’s strong third-quarter results. They also shared insights from Simon Taylor.

Additionally, other companies reported positive third-quarter results:

  • Dave’s third-quarter net loss improved by 47%, with a 6% increase in monthly transacting members to 1.9 million.
  • Flywire’s third-quarter revenue grew by 29.5% year over year, achieving record highs in revenue and adjusted EBITDA.
  • Payoneer reported a record revenue of $208 million for the quarter and saw 5% growth in active ideal customer profiles year over year.
  • Robinhood’s total net revenue increased by 29% year over year to $467 million, with over 1.3 million customer subscriptions, including 100,000 new subscriptions added in the third quarter.

Furthermore, several fintech companies are focused on providing credit opportunities for young individuals. For example, Greenlight and Step have launched initiatives to help children and teenagers build credit and financial awareness. Step’s CEO, CJ MacDonald, announced the launch of Step Black, a rewards card designed to build credit without accumulating debt.

Other items of interest:

CFPB proposes oversight of Big Tech digital wallets

Banks look to fintechs to stave off threat from Big Tech 

Arc debuts international treasury product

Visa launches global AI advisory practice focused on generative systems

Belvo introduces bank debit service for Mexican businesses

Bluevine rolls out high-yield interest rate for SMBs

PayByPhone has been acquired by Fleetcor, and it was acquired by Volkswagen in 2016.

Funding and M&A

As seen on TechCrunch

Enable, a platform for managing B2B rebates, achieves $1B valuation

Volante secures $66M for payment technology targeted at legacy financial businesses

Mogul Club raises $3.6M to make real estate investing more accessible

Seen elsewhere

Holdings denies report on deal to acquire Melio

Andreessen Horowitz co-leads $60 Million AI fintech investment

Valor Capital eyes $500M for two new funds

Singapore-based fintech LXA lands $10M in latest funding round

Image Credits: Bryce Durbin

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