The CEO of Revolut would like to buy Klarna. He will fight it instead

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Revolut Ltd. boss Nikolay Storonsky has his eyes on the booming ‘Buy Now, Pay Later’ industry as he plans to compete with Swedish startup Klarna.

“Which business would I like to buy? For any budget? the UK fintech CEO said in an onstage interview with Bloomberg News at this week’s AI summit in London. “Maybe I would buy Klarna, it’s a good deal.”

While Storonsky only engaged in a few fancy mergers and acquisitions, his intentions towards the so-called BNPL marketplace are serious: he said Revolut is likely to launch a product to rival Klarna in Europe next year.

Revolut, which started out as a money transfer service and has ambitions to become a “super app” for banking and business products, got a valuation of $ 33 billion from investors this year. But Klarna did better, securing $ 45.6 billion worth thanks to her popularity with Millennials and Gen Z buyers. SoftBank’s Vision Fund 2 was a lead investor in both companies’ fundraising rounds. .

Once a niche form of credit, BNPL usage increased during the pandemic and it is now a $ 100 billion industry, according to Worldpay. It allows consumers to delay payment for in-store purchases for 30 days or pay in installments, usually without interest charges.

How the old style buy now, pay later became a fashionable ‘BNPL’: QuickTake

“It’s still the beginning, but our product will be better than Klarna’s,” Storonsky said. “Our product will allow you to buy now and pay later with any merchant. It will also be fully regulated.

BNPL’s rapid spread has regulators worried that younger borrowers are gaining the upper hand, while mainstream banks worry about the threat to their credit card and consumer credit businesses. Britain’s Financial Conduct Authority has called for the sector to be properly regulated, which would impose additional costs on fintech startups if they were to tighten affordability controls.

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“The regulations are going to hit the ‘buy now, pay later’ market sooner than expected, and that will change the dynamics a bit,” said Jes Staley, CEO of Barclays Plc recently.

Banking approach

Revolut was launched in 2015 with a prepaid card for currency exchange, but it has evolved and now offers products ranging from buying and selling cryptocurrency to business banking and trading. commission-free actions in the United States. compete with 150-year-old banks, ”Storonsky said. “We want to obtain a banking license to increase the level of confidence and the level of confidence in our business.”

Revolut is also working on small offers for niche products, he added. “We have almost made two or three acquisitions,” he said without giving details.

Revolut has been approached by a bank for a possible merger in the past, Storonsky said without revealing a name. “Three or four, five years ago there were conversations, but I was very strict that we are not for sale.”

“The only thing I would buy from a traditional bank is the license.”

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