 So thank you, Sebastian, for joining us on stage today. I'm going to move so I can see a little bit better. Very excited to host this fireside chat with you. You've been leading Klarna for almost 17 years now. Actually, more this. Wow. And today we focus a little bit on resilience and your vision for the future. And 2022 hasn't been the easiest year for the company, but you come out stronger and more convinced than ever that the industry needs to change. Klarna is one of the most category defining companies in Europe, and you have more than 150 million users. And let us start from the beginning. What was the vision when you founded Klarna, and how has that changed over the years? It's funny you say that. I think it was a few months ago where I found this old email that I wrote when we were three co-founders. And this email is written like a few weeks into the company started. And it basically goes something, hey, Victor, in a class, which were my co-founders. I'm sitting here. It's 11.30 PM. And I'm thinking to myself, wouldn't it be cool if we actually continue growing this and kind of grew into more countries and eventually really took on the big banks and gave them a hard time and stuff like that? And so obviously reading that email, finding it among my old emails is like, actually, that's pretty much how I would describe things today. So as much as obviously that sounded extremely crazy and aspirational back then, it hasn't really changed. Like, it's the same thing. Very, very inspiring. But you've been dealing with uncertainty for over 70 years now, and also being in a heavily regulated industry. It's probably fair to say that you've seen more than most. What's your view on the current market conditions for running a large tech company today? Wow. First, I had to reflect on the fact that I'm suddenly one of the oldest instead of one of the youngest. I know. But OK, digesting that. No, I think, look, before this whole thing happened, I happened to meet one of the very successful investors in this industry, DST. And we were having a discussion, and we were talking about the fact that digitalization has continued to transform our society. And it's been doing so ever since 1999. And over dot com, and then over to the financial crisis of 2007. And as much as things go up and things go down and people have this, that trend is not changing. Like, it is eating into the rest of our lives and changing our world. And it will continue to. And it's actually done at a fairly consistent pace, independently of all the movements and investor sentiment and all the other things. So I feel extremely optimistic about the long-term opportunities from that perspective. And there's been a lot of public speculation about Clarness valuation recently. And it's a lot of people that want to paint this black and white story of total success or utter failure that's too high, is too low. And I think we heard it all in very quick succession. How have you been able to turn out that noise and focus on what's really important? And how important is actually the valuation to you? Well, first of all, I think actually what you said is extremely important that it is noise to some degree, right? Obviously, you need to take into consideration the macro environment. You need to take into consideration what's going on around you. But I do think as a founder and entrepreneur, a lot of what you need to do is filter and ask yourself of all the things that are happening around me in the world, what are the things that really matter that I'd really need to pay attention to? And so I do think still, you can describe some of the noise. Again, the valuation of Clarness is not something I decide. It's the investors that decide what they want to value the company at. And when I look at it basically a year ago or up until that time, as much as today, people may look at a company of Clarness and say, oh, my God, how could you invest $100 million a month at the pace where you were loss making $100 million a month? But it's easy with the benefit of insight. If you go back a year from now, at that point of time, Clon, I was valued $45, $50 billion, that means that capital was so cheap that we were diluting our shareholders 2% a year in order to invest and lean into the future. That, to me, is a very rational decision to say, I'm going to dilute 2% a year because there's a tremendous huge opportunity ahead of us that we want to lean into. Investor sentiment then dramatically shifts in the last year, and obviously valuations come down. Unfortunately, then, as a CEO and a major shareholder and responsible for my employees, for my customers, for my shareholders, we jointly, as a team, came together and had to change. We had to make a change to how much we were investing and how much we were leaning into the future and focus more on the now and the profitability and the success of the company. So to me, I mean, I don't control what happens out in the world, but I can affect, obviously, what we do and I can try to reflect on that. And I think to come back to your noise, when COVID happened, at that point in time, there was a few weeks when everyone thought that the world was falling off a cliff and I had investors calling me, like, why are you not reducing your spend? Why are you not? And even some companies started acting as well, but that point of time, I felt like, you know what? We are 6,000 employees. You also want a captain that is steady on the ship. You can't turn a tanker around when it's our size. And so we said, let's wait for a few weeks, see how things develop. And we saw that actually it led to a digital acceleration at that point of time. So what would have been the wrong decision, right? This time around, we concluded differently. And some with us, some companies actually took action already in May around the new environment. Some are taking action now. But, you know, I think to me, that's how you have to do it. Yeah, and you actually completed one of the biggest fundraisers in Europe this year. So congratulations on that. What will you use the new capital for? Well, so to us, it was very clear, like, again, maybe because I do have the benefit of, my God, now I sound like an old stud again. But I do have the benefit of, like, I did take Klanah through the financial crisis of 2007. So it became very apparent to me, as we were fundraising, that it was a very new environment. You know, stock markets were plummeting every week. Our peers, like PayPal, was dropping. I mean, the value change in Klanah is the same as PayPal. Like, there's no difference. So our public peers have seen a similar loss in valuation. And so when I saw that, then the conclusion was, OK, we're going to have to move towards profitability. In our case, the benefit is, we do have a very strong business model. So we actually make about a billion dollars in gross profit in Europe. But we were investing heavily in the US, and that was making the company loss-making. So basically, we just had to put ourselves a plan that would take us back to profitability. And we set out that we were hoping to accomplish that by somewhere after summer next year, which we still think is achievable. And we've been delivering against that plan. So to me, that's just like, you've put a new plan in place, and then you have to go and try to accomplish it. Like, that's pretty much it. Yeah, and I spend a lot of discussions now as well about the crisis and increasing consumer spending, looking at the macro effect and the shift you had to do. How have you been reshifting priorities? And in that process of getting to profitability, then how do you motivate the team to stay, you know, keep innovating, scaling, stay connected to the vision when you go from kind of the high growth to the more profitable growth route? So two things. The first plan is a lender. So one of our products is credit. It's not the only product as much as media sometimes portrays it that way. Actually, almost 50% of our transactions are debit. So people pay it for them out. But we have a credit part, and as a responsible lender, when you see macroeconomics change, you do have to change your underwriting. So basically, already in January, actually, almost a year ago, we already started tightening a little bit. And then in May, we tighten even further. And that is a combination of the company's responsibility towards our shareholders and our employees, because we decrease our losses. But it's also a responsibility to people borrowing, right, that you don't want them to overextend in a tougher economical environment. So that has been done. Separately to that, the second part to your, you know, how does the team, and obviously, first and foremost, it's extremely sad and tough. And I think a lot of companies here that may be struggling now with financing or whatever, like, it is one of the most painful things to have to part with colleagues and people that you worked really hard to recruit, and suddenly you're asking them to leave, right? So that is obviously very sad. But I also have to consider that people are staying. I have to consider our customers. That is the challenge of being a CEO. You have to think about all stakeholders, right? So you have to think about that. And a lot of our employees are also shareholders, so they have both perspective. So that's very hard. But I also felt, in our case, we tried to do the best out of that. We definitely did tons of mistakes as we were trying to do that process as good as you can. Unfortunately, as most, I think, founders will learn, there is no good way to let somebody go. Like, there is no good way to do it. Like, there is a less bad way, or a very bad way, but there is no good way. So you try to learn from it. You try to do the best that you can. But I would say, at least within Klon, I feel a tremendous momentum. After summer, people had a little bit, you know, we did it in May. In summer, people had the chance to relax a little bit, you know, recharge their batteries. And then they came back, and now there is a tremendous momentum. And I do think that maybe also a little bit, we're starting to see both investors and employees say, you know what, you guys took action early on. And that's actually a good thing, as opposed to some others taking action now. So, and also actually, even if you think about the people who we had to let go, in a way, they were lucky because they went out into employment market where they could still get a job. If we would have done the same today, it would have been much harder for them to get a job. So it's almost like, you know, in the end, I think, again, when I look around and look at other companies, I think it's the strength, if they once situations really change, they're willing to take the actions. It doesn't mean that it's easy or empathetically easy, but I still think it's the strength that you do it. And I think it's, you know, it's the right thing to do. For sure. And we're in front of this very ambitious entrepreneurial audience. I was told that it's 12,000 people here this year. So if you would speak to the entrepreneurs in the audience, what is the one piece of advice you have for how to navigate the current environment? No, but I think it comes back to that. What I just said is that, you know, take action, right? Like, don't hope that things will become better, but take the actions that you need to take. And I think that's the only advice that makes sense. Now, then it's always easy when you're on a stage like this to say that, and then, you know, consequence, every company's different, every environment is different. At least to us, what we also try to do is we try to do it where we said, let's try to do it enough so we don't have to do it like multiple times. Obviously, then media has reported that we've made some changes afterwards, but that's just, we did that before this as well. That's just a big company does changes to the organization now and then. So it's not necessarily associated with this, but like, I would just say like, make sure that when you do it, do it properly, right? So you take the actions that you need to do, if you need to do them, right? And as a founder and a CEO, you're surrounded by lots of people, but I can imagine that it's also very lonely place. You talked about the different stakeholders, your under immense pressure, your in the media. You have to think about your message to every, you know, separate stakeholder. How are you working with support, advice? How have you worked with that in your role at Klarna? Well, so, well, two things. First and foremost, I got to say, like I have Michael Moritz on my board who's been supporting me from Sequoia for 12 years. I don't know, maybe some venture funds are short-term capital. I can tell you Sequoia is not, they're long-term capital. 12 years, I think is the proof of that and Michael's commitment is just crazy that he's been with me so long. And he obviously has background, he's been at Google and YouTube and PayPal and all these companies. So that has meant the world to me and Michael's and Sequoia support. I think in addition to that, I have a wife who runs a fantastic startup called Milky Wire. Go check it out, by the way. Don't care about Klarna much. Go check Milky Wire. It's really cool. Yeah, but it's really cool. And so that's obviously a benefit at home. It's fun that we have, you know, commonalities we can share experiences and we can talk about similar challenges, that helps. But to give also a little bit of, like, just my history in this, I went to a psychiatrist for multiple years. I tried that. I went to cognitive behavioral therapy. I have, you know, I've tried meditation and all that stuff as well, even though it didn't work that well for me. So I've been trying to be open-minded and try a lot of ways. And I've had mentors and people who've, you know, who I always say that to younger entrepreneurs as well, like, find somebody that you think could be helpful and don't look that much to, like, tech. Rather, if you're like, if you're food tech, go and find some slightly more senior person that's worked in the food industry for 40 years. Because there you're gonna find a very different perspective and insight than if you go to another tech person. It's just, we tend to kind of set ourselves in an echo chamber where we're kind of surrounded by people that have very similar experiences. It doesn't really challenge you that much. I've been trying to seek out people with a very different background. Yesterday I was in Derbyshire, visiting the Toyota factory, learning about, you know, Toyota Way and agile working together with, you know, 20, 30 top managers of Clana. Super interesting, right? Very different world than the one that we work in. So that's some of the maybe advice. I always hate saying advice because I feel a little bit like everyone is unique, everyone has their own prerequisites. So not everything is generally applicable. But yeah, if something, then I think that helps. Very useful. And you spoke a little bit about the past year, but looking at where you are now with the company versus a year ago, where are you now? How do you feel about the current position? Well, so I was, so Nina, my wife, she told me when she knew I was gonna come on stage. She said like, tell everyone the title of the seminar is wrong because there's no bounce back. You guys are doing better than ever. So now I've said it. And I think she was right to some degree that like people tend to look at the perception in the media and like valuation was this and valuation was that. That's an external valuation of our work, right? So the way I think about it many ways, my learning of the years is like, you have three things. You have something I call internal momentum, which to me is like the spirit within the company. It's when I walk around, when I talk to managers, when I talk to people, how much things am I seeing happening? Are we producing new products, new features, are things happening? Do I see what to me looks like sound and smart decisions? Are people challenging each other? Is it a good environment? That's my momentum. Then I have the P and L, which is the actual performance, financial performance. And then finally, I have the external perception or valuation of the stock and kind of the external view what's going on. And obviously in the long term, these are 100% correlated. They will, internal momentum will read to great P and L and then that would be, but what you've learned after 17 years is in the short term, they can be extremely not correlated, right? And so if you look at it currently, in the last few years, Clana's internal momentum has been improving a lot and I wasn't that happy when I was walking around seven, eight years ago, I felt that we were slow becoming bureaucratic, that the organization wasn't where it needed to be and I knew that eventually that would show in the P and L. But at that point in time, we had the momentum from the early days that was still making our P and L look great. Now we're in this fantastic internal momentum and actually our P and L is great as well. So we have great performance and improvements. If you compare to a year ago, we see strong growth, we see improvements in our gross profitability, we're moving towards the plan. Perception is something very different. I can't control that. Like I mean, I can control it to some degree. I'm trying to give interviews and I'm trying to talk to journalists and hope that they kind of report on both aspects. But in the end, it is what it is, right? And obviously it does affect people. Like I mean, the valuation, we have share all this and so forth. So I'm not saying it's all perception, there is obviously reality to that as well. But I can focus on internal momentum. If I do that well, P and L will come and then eventually the third thing will come as well. So looking ahead then, can you let us in on the plan for Clana? What's the long term vision and kind of what are you building towards? Yeah, so I think, look, financial services are extremely exciting to me because they are this tremendous industry. I mean, I think the total addressable market is like trillions of dollars, whatever. So it's just big, you don't even need to size it. You can just say it's big. In addition to that, banks haven't served us consumers well. Like the services are so-so and many times they are built against us. Anyone who wants to learn more about it, go to Netflix, look at credit cards explained for 25 minutes and you will just realize the amount of tricks that this industry has applied to make as much money as possible to the disadvantage of consumers. Listen to banks talking at investor relations. They will talk about maximizing interest rates spread. What does that mean? It sounds nice when you think about it. But think about it from a consumer perspective or a customer. It means I'm going to offer you as little on your deposit accounts in savings as possible and I'm going to maximize how much interest I charge you for your loans. That's maximize interest rates spread. That is directly in conflict with your customer's best interest. So there's this tremendous industry, it's broken and it needs competition. It desperately needs competition. And the best way it's going to get competition is to customer mobility for consumers to be easily switched. So if you make it easier to switch, technology can help that. So when I look into the future for myself, I think that at some point of time, you'll wake up in the morning and your computer will say, hey, I looked at your mortgage tonight and I realized I could save you $5 by switching from this bag to that bag and the only thing you need to do is say yes. I mean, I don't know how long we'll take before we're there. It's a bit like self-driving cars. They seem to actually be happening now long after the hype is gone, but I don't know when it's going to happen, but it's going to happen. And what it means is at that point of time, banking will not be about maximizing interest rate spread. It will be about providing the most value for you as a consumer. Save time, save money, make you feel less worried about your finances. So that is the direction it has to go. And so to me, that has been the direction years ago and it's still the direction. That's what I want to accomplish. I want to be one of the players that accomplishes that and that pushes the envelope in that direction. So... Very exciting. And there's a lot of speculation in the media about an IPO and kind of you, are you staying private? How are you thinking about that? Yes, it's funny because we've gotten that question in multiple times. We have been, I've been trying to be very consistent. So to me, it's quite easy. I think Google's IPO is my dream IPO. It was done in 2004 or five, I can't remember a little bit later, but the markets were quite stable at that point of time. It was not.com, it wasn't overhyped, it wasn't underhyped. Google was in a good position. They still had a lot of growth ahead of themselves, but they have also accomplished a lot of things. If I look at the market conditions, maybe one or two years from now, we'll start getting into that same market. I think it's probably over-depressed at the moment. And then from a company perspective, I think in one or two years, I mean, US is already our largest market by revenue. We are very close to making it gross profit profitable, and we're going to see profitability for Klana by, you know, a second half of next year. So at that point of time, you know, in one or two years, yeah, it's probably you start getting to that position when that makes sense. Extremely impressive. So I see time flies. One last question. Focusing a little bit more on the current environment, your vision for the future, what are the things you see in the market today that we should get used to because they will continue? And when do you think things will improve again and get better? Well, I think, first and foremost, I always feel difficult to answer that question because if you turn on any business TV channel, you're going to find a lot of people in suits that are going to provide you advice on this topic. And I find them as believable as any horoscope that I can read in the newspaper. So, like, I don't think anyone really knows. And then, but obviously, right now, it seems that we're going to go through a recession. It seems as if we're going to have a tougher time ahead of ourselves. And at least for Klana and for our company, we've taken a decision to assume that and prepare ourselves for that. And then, you know, who knows? I think at least one thing that I do believe, clearly on this, is when it comes to e-commerce companies, I think investors are overreacting, especially I think e-commerce companies are strong and have tremendous opportunity. And I think sometimes markets just are, sorry to say so, a little bit stupid. Right now, when we look at e-commerce companies that are public, you're comparing them to COVID. And now we don't have COVID anymore. So you're comparing apples to bananas. It is unthinkable that they would see the growth rate they saw a year ago. And I feel sometimes the market really doesn't give any attention to that topic. Like it seems to totally ignore it. And that's at least my perception. So I feel like I believe e-commerce, we're seeing good growth in our e-commerce company, we see e-commerce. Obviously, no, if you compare year on year, it's slowed down, but that's just natural. Give it a full cycle of one year and the comparisons will look better again, right? So I think especially for a lot of e-commerce-centric companies, hang in there, a lot of it is just perception. At least our numbers look great. We're seeing great momentum. Our transactions and volume are up 25, 30% year on year. Like it looks great. It doesn't look as bad as it does in the press, right? So I think a little bit of that is just what do you compare to? Just keep that in mind. Thank you so much for giving us a glimpse on how you navigate the uncertainty, Sebastian. A round of applause for Sebastian at Klarna. Thank you.