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Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

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Speaker 2: Shares of buy now, pay later firm Klana are set

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Speaker 2: to begin trading today. The company, in some of its backers,

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Speaker 2: sold over thirty four million shares at forty dollars each,

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Speaker 2: giving Klana a market value of about fifteen point one

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Speaker 2: billion dollars. We're joined now by Klana CEO Sebastian Shimmi

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Speaker 2: and Koski Sebastian. First of all, congratulations to you. Caroline

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Speaker 2: and I have quizzed you over the years on when

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Speaker 2: an IPO happens, why it happens. I just want to

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Speaker 2: bring you some news if I may. In the time

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Speaker 2: that we've come on air. There's a headline on the

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Speaker 2: Bloomberg terminal that the shares are indicated to open between

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Speaker 2: fifty and fifty two dollars each. You price the IPO

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Speaker 2: at forty. Just summarize your reaction to that and what

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Speaker 2: it means to you on a daylight today.

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Speaker 3: I'm happy I didn't hear what you said on the price,

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Speaker 3: or I pretend not to hear it so I don't

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Speaker 3: have to comment on it. We'll find out. Like I'm

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Speaker 3: you know, I'm very I'm wroteing my looking forward to

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Speaker 3: welcome new shareholders for the company, and I think there's

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Speaker 3: decades of growth and opportunity ahead of ourselves, So I

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Speaker 3: feel very excited about this.

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Speaker 2: Today we introdu you as a buy now, pay later

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Speaker 2: firm that increasingly when you've come on this program, we've

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Speaker 2: talked about Klana is an everything app. How does this

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Speaker 2: IPO reposition you into that domain?

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Speaker 3: Well, look, I think that was actually my biggest happy

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Speaker 3: moments from the IPO. There were two from the road show. One.

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Speaker 3: I got very few questions about buying Appy later, and

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Speaker 3: a lot about our card and how it's growing. We've

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Speaker 3: signed up seven hundred thousand new Americans in the last

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Speaker 3: six weeks to our card. We have five million people

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Speaker 3: on the waiting list. But the best part of the

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Speaker 3: road show, I tell you, was when we signed into

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Speaker 3: one to the reception and one of our investors, the

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Speaker 3: guy in the reception said, oh, you're from Clana. He's like, yes,

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Speaker 3: do you use it? I love it? I use it

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Speaker 3: all the time. And I was like, oh, but what

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Speaker 3: can we do better? He's like, nothing, just get me

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Speaker 3: the card. So that was that was the best moment

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Speaker 3: from the whole road show.

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Speaker 1: It's it's like a marketing event. When one goes public,

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Speaker 1: you get your name in other people's mindset. Here in

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Speaker 1: the United States, will you go for a banking license?

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Speaker 1: Talk us through where the growth story is going forward?

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Speaker 3: Sure? No, Look there, we have a bank license in Europe,

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Speaker 3: as you're well aware of. We've had it for ten years.

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Speaker 3: It's fantastic, gives us access to deposits. It's a very

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Speaker 3: effective way of funding. Our banag sheet allows us actually

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Speaker 3: to do it more cheaply than our competitors. But I

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Speaker 3: think the key thing is in the US there's this

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Speaker 3: group McKinsey showed us in a study already ten years ago.

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Speaker 3: They're called self aware of voids. These are people who've

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Speaker 3: tried the credit card. It actually makes slightly more than

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Speaker 3: your low income household and medium houses in household income.

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Speaker 3: They are they try the card, they tried revolving. They

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Speaker 3: say it's it's the product of the devil. They don't

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Speaker 3: want to get in four thousand dollars of credit card

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Speaker 3: debt with you know, twenty thirty percent interest. They love

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Speaker 3: by an appulator, and they love our card. They love

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Speaker 3: the opportunity to put most things on debit and then

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Speaker 3: occasionally put it on interest free installments very cost effective.

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Speaker 3: So that's the target audience, twenty percent of the American households.

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Speaker 3: And you know now we have twenty six million users

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Speaker 3: in the US, so we're seeing a lot of pickup, seeing.

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Speaker 1: Pickup, You're seeing pick up in your shares. You are

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Speaker 1: significantly oversubscribed, as we told you, and you chose not

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Speaker 1: to hear that you're currently seeing shares being indicated much

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Speaker 1: higher than even that they priced. That did you sell

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Speaker 1: too low? I know you're a man that's had to

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Speaker 1: stomach variations in your market capitalization in history. What does

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Speaker 1: it mean to you to have evaluation out there in

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Speaker 1: public more broadly every day.

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Speaker 3: Well, look, to be honest, personally, I'm not selling a

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Speaker 3: single share in this IPO. I am, you know, a

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Speaker 3: long term shareholder. I love this company, been doing this

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Speaker 3: for two decades to a long period of time. But

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Speaker 3: fortunately I was twenty three when we started, so I'm

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Speaker 3: not that all yet and I hope to continue for

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Speaker 3: a few decades. And if you're truly going to disrupt

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Speaker 3: treata banking and you know, and change this industry that

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Speaker 3: has you know, a mass so much excess profit because

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Speaker 3: of the lack of competition, the lack of customer focus,

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Speaker 3: and you want to bring that back and you want

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Speaker 3: to create a better service for customers. That's going to

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Speaker 3: take some time, though. This is not something you do overnight,

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Speaker 3: and I just look forward to doing that, and then

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Speaker 3: investors will occasionally lean more into the future and occasionally

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Speaker 3: lean more into profit today and so forth, and that

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Speaker 3: will vary, and you know, it's up to everyone to

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Speaker 3: take that decision for themselves.

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Speaker 2: Sebastily. The mechanism in this IPO is really important because

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Speaker 2: you didn't raise like a huge amount of money, and

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Speaker 2: on this program recently we've done all the reporting on

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Speaker 2: some of your peers, like Revolute, doing transactions to stay

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Speaker 2: private deliberately. So you faced a choice and you chose

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Speaker 2: to go public. What was the main motivation?

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Speaker 3: I think that you know, again, to your point, we

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Speaker 3: only raised two hundred million dollars right in this IPO

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Speaker 3: because the company is, you know, self sustainable from a

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Speaker 3: capital perspective, doing really well, so there's no real need.

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Speaker 3: I think that the key thing is we've had twenty

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Speaker 3: years of private investors, employees bought into the stock, and

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Speaker 3: over time it became quite an effort to keep track

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Speaker 3: of private transaction in Google sheets, right, So now it's

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Speaker 3: a little bit more efficient to trade the stock on

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Speaker 3: the market. Gives people who's been with us for many

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Speaker 3: decades the ability to get some liquid out, but most

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Speaker 3: people are not selling much. And at the same point

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Speaker 3: of time, fantastic to welcome new shareholders to the cap

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Speaker 3: table who want to join what we're trying to revolutionize

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Speaker 3: in retail banking. So I'm super excited about So.

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Speaker 2: Which you kind of illustrate outline what the competitive landscape

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Speaker 2: looks like to you, who your competitors are, and also

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Speaker 2: the regulatory headwinds that you're bracing. For sure.

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Speaker 3: I mean people will always mention a firm revolute, and

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Speaker 3: we are very impressed by those companies, very inspired by them.

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Speaker 3: But the truth is credit card industry is a one

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Speaker 3: point three trillion dollar revenue market. So I would say

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Speaker 3: it's mostly the incumbents, the old banks that are you know,

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Speaker 3: the opportunity and where the competition is and what we

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Speaker 3: can grab market share. And the problem for them is,

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Speaker 3: you know, if you have a credit card program that's

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Speaker 3: running at thirty percent interest and you're revolving people at

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Speaker 3: four thousand dollars and you look at Klona's payment model

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Speaker 3: where our average outstanding balance is one hundred dollars and

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Speaker 3: zero percent interest. You're not too keen. You don't want

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Speaker 3: to jump into that. You don't want to lose all

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Speaker 3: the profit you're making. But for us, it's just opportunity.

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Speaker 3: It does upside, you know, grab more market share, become larger.

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Speaker 3: It works well for us. We make money out of that,

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Speaker 3: you know. So it's that's what we see is the

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Speaker 3: primary competition on the regulatory side. Look, I think at

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Speaker 3: the core of it, if ten years from now, less

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Speaker 3: people use credit cards and more people use debit cards

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Speaker 3: and occasionally buy an appy lator, that's a better that's

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Speaker 3: a better society. And as we get the chance to

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Speaker 3: sit down and take all the noise away from media

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Speaker 3: and so forth, to actually explain and show our losses

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Speaker 3: are thirty percent lower than credit cards, our consumers are

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Speaker 3: borrowing much less.

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Speaker 1: You know.

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Speaker 3: I had this conversation to add a conversation with a customer.

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Speaker 3: She was like, yeah, my mom called me and she

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Speaker 3: was like, are you using this dangerous thing called binacty

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Speaker 3: lated with Klana And she told her moms like, mom,

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Speaker 3: you have a credit card? Right? Yeah? How much depth.

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Speaker 3: Do you have four thousand dollars, what's your interest thirty percent?

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Speaker 3: Which is like Mom, I'm borrowing one hundred dollars a

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Speaker 3: zero percent interest? Who is financially responsible? And you get

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Speaker 3: those that message across, then you realize that regulators actually

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Speaker 3: start embracing and seeing value in that we're bringing competition

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Speaker 3: to a market that has, you know, extracted excess profit

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Speaker 3: out of customers by tactics that are not in the

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Speaker 3: customer's best interest.

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Speaker 1: Agree, and your tactic in many ways has been to

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Speaker 1: embrace efficiency, adopting generator AI in the workforce in particular

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Speaker 1: within the product. How much more can you focus in

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Speaker 1: on margins? How much more are you going to have

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Speaker 1: to keep hiring to scale and to sell?

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Speaker 3: Well, the truth is right, we haven't hired people for

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Speaker 3: two years. We've shranked the company from seven thousand to

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Speaker 3: three thousand, four hundred to three thousand people, which is fantastic,

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Speaker 3: but I would say we've probably over indexed a libit

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Speaker 3: on efficiency. And now the last six nine months we've

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Speaker 3: taken much more focus on how do we take all

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Speaker 3: the learnings We've used ourselves as employees as guinea pigs

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Speaker 3: for all these AI software, all these tools we took

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Speaker 3: out all the SaaS software to salesforce and all that,

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Speaker 3: and now what we want to do we want to

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Speaker 3: bring that to our customers. We want to bring that

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Speaker 3: to theirmercions. We're very excited in the coming weeks and

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Speaker 3: months to launch AI powered customer retail banking apps that

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Speaker 3: we believe are going to be tremendously more valuable and

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Speaker 3: create more values, save time, save money for our customers

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Speaker 3: and make them feel and control of their finances. So

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Speaker 3: it's very exciting to use AI now to create the

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Speaker 3: next generation of financial services.

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Speaker 2: So Sebasti, you're a public company now, so you have

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Speaker 2: coarsely earnings. But I want to end by asking what

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Speaker 2: the metric is that you will gauge plan as success

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Speaker 2: by what is the kind of milestone that you are

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Speaker 2: holding your company to from this point?

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Speaker 3: Well, it's very easy. You mentioned already resolute in the

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Speaker 3: firm clan has focused in the last few years has

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Speaker 3: been let's get as many users as possible. It's thet'll

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Speaker 3: be like Facebook, right, you want to get as many

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Speaker 3: users as possible. We're now at one hundred eleven million.

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Speaker 3: That means, you know, a firm I think is less

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Speaker 3: than thirty revolute fifty. We're one hundred eleven million uses,

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Speaker 3: but our revenue per customer is not like as much

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Speaker 3: as there, and that is it. You know, revenue per

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Speaker 3: customer is the one metric now because we know that

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Speaker 3: when we start launching things like the car and we

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Speaker 3: see massive pickup from our audience. So now obviously we

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Speaker 3: want to reach similar revenue for customers we're seeing our

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Speaker 3: main competitors and that has the potential of bringing us

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Speaker 3: from a revenue size company as well to a different level.

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Speaker 3: So that is the key metric right now. Revenue for customer.

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Speaker 1: I do know it's best in Shimunkowski plan a CEO

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Speaker 1: the Blockbuster hat I that bodes about the IPO rather

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Speaker 1: than the future business model. We say appreciate you being

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Speaker 1: here with us today live from the New York Stuck

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Speaker 1: Exchange