Speaker 1: Let's get to the corporate story around the fintech space
Speaker 1: and the Swedish buy now, pay later firm Clan are
Speaker 1: pushing really interestingly into retail banking by rolling out digital
Speaker 1: accounts in the US and much of Europe. It's happening,
Speaker 1: of course, as the firm prepares for an IPO potentially
Speaker 1: in the US. Plan A CEO and co founder, Sebastian
Speaker 1: Cimatkowski joins me now from Stockholm for the latest Sebastian,
Speaker 1: thank you for taking the time taught us about what
Speaker 1: this push then into retail banking says about your ambitions,
Speaker 1: Klana's ambitions to push further into this space, what it
Speaker 1: could mean as well for the top line in terms
Speaker 1: of revenues.
Speaker 2: I think, you know, backing instry is so interesting because
Speaker 2: it's one of the probably least competitive round the high
Speaker 2: virus of entry law. You know, you have to be
Speaker 2: a big volume cost company to be able to operate
Speaker 2: in just a lot of regulations and stuff. So but
Speaker 2: ever since fifteen we said that the future of financial
Speaker 2: services will be in digital aipower and financial assystem that
Speaker 2: really works on the behalf of the customer as you're
Speaker 2: spending and say Hey, you're overpaying on the mortgage. Let
Speaker 2: me renegotiate that for you. Let me fix you know,
Speaker 2: let me make sure to save your time and money.
Speaker 2: And ever since that has been the direction of the company.
Speaker 2: And I think now this for us is one of
Speaker 2: those huge steps when we're now starting to offer it
Speaker 2: deposits accounts or positive balances accounts across both Europe and
Speaker 2: the US, which is also unheard of, right because banks
Speaker 2: usually would go like one market at a time, and
Speaker 2: we're launching it in over ten markets at the same
Speaker 2: point of time. So it's super exciting for us. And
Speaker 2: it's very important, as Klon is both about credit payments
Speaker 2: and debit payments where you pay the full amount immediately,
Speaker 2: which is already thirty percent of or one hundred billion
Speaker 2: dollars annual volume.
Speaker 3: Yeah.
Speaker 1: So look, it is ambitious, as you say, and you're
Speaker 1: taking on the lights of JP Morgan, you're taking lights
Speaker 1: of city and others. Do you have a sense of
Speaker 1: about how much market share you could carve out?
Speaker 3: Well, I am.
Speaker 2: Only I'm very very convinced that's what's going to happen
Speaker 2: with technology here. We're going to see a disruption in
Speaker 2: the in the retail banking industry, and that out of
Speaker 2: that will emerge probably three for large global retail bank
Speaker 2: players which you know very likely to meet. Could be Klana,
Speaker 2: could be Revolute, could be a new bank, could be
Speaker 2: a few of those who have already proven Now that
Speaker 2: you know, we have eighty million users worldwide, right, Like,
Speaker 2: acquiring eighty million users and then starting offering them more
Speaker 2: and more rich banking services is pretty unheard of. There
Speaker 2: are few banks of that size, but we're obviously not
Speaker 2: yet serving them with a full offering yet.
Speaker 3: But as we do that, we think it's going.
Speaker 2: To outcompete because the incumbents are simply poorer from a
Speaker 2: technology perspective, and also much much more costs, right. I mean,
Speaker 2: if you compare the cost at which we delivered these
Speaker 2: services to the big banks, is a huge difference.
Speaker 3: So I think that this is just the beginning.
Speaker 2: And just like we've been talking about self driving cars
Speaker 2: for many years and now I actually went on a
Speaker 2: way more in San Francisco has actually worked.
Speaker 3: I think this will eventually happen. It's just a matter of.
Speaker 1: Time, Okay. And in terms of projections around top line
Speaker 1: numbers revenue streams, do you have some estimates. Do you
Speaker 1: have some kind of ballpark figures that you're looking at
Speaker 1: as you project out in terms of the potential value
Speaker 1: of this push.
Speaker 3: Yeah.
Speaker 2: I mean for us, one of the biggest things with
Speaker 2: this for us is that our volumes are over one
Speaker 2: hundred billion dollars per year, but so far those money
Speaker 2: has instantly been pushed back to the bank of the
Speaker 2: customers to the other networks like Visa and MasterCard. And
Speaker 2: with us having positive balances, this means that more of
Speaker 2: the money will stay within our network, more of those
Speaker 2: positive balances will build up in our network, and that's
Speaker 2: obviously going to have a dramatic impact on both our
Speaker 2: payments costs as well as our cost of funding. We
Speaker 2: have already offered very attractive deposits historically. But what's really
Speaker 2: cool about this positive balance account in Europe is we're
Speaker 2: going to offer up to three and a half percent
Speaker 2: interest on that balance account, which I think most European
Speaker 2: consumers have not been spoiled with that kind of positive
Speaker 2: interest on their debut accounts.
Speaker 1: Okay, so you got that interest offering in you've got
Speaker 1: the banking license in Europe. Of course, you don't have
Speaker 1: a banking license in the US, yet are you making
Speaker 1: progress on that front? I know this is an ambition
Speaker 1: of yours. What is the time frame? Do you need
Speaker 1: to get that banking license before the IPO?
Speaker 3: No, I don't think that's the prequisite.
Speaker 2: I think I mean to somebody, our US success almost
Speaker 2: took a lit bit by surprise, right, Like I mean,
Speaker 2: in twenty nineteen, our US business was non existent. Today
Speaker 2: it's the largest part of our business, both in revenue
Speaker 2: and number of customers. It's over thirty million. We're probably
Speaker 2: gonna hit over a billion dollars in revenue in the
Speaker 2: US pretty soon. So but that has obviously made sure
Speaker 2: that we are doubling down our efforts to accelerate rolling
Speaker 2: out new services in the US as well. But especially
Speaker 2: when we talk about things like banklizes, it does take
Speaker 2: some time.
Speaker 3: Right.
Speaker 2: It took us a few years to get our europe
Speaker 2: of accay license. So we don't want to make you
Speaker 2: know the dependency on the IPO to that.
Speaker 1: Okay, what are you saying in terms of consumer behavior
Speaker 1: in the US, you see any softness at all, Sebastian,
Speaker 1: or are they holding up in terms of that resilience?
Speaker 1: And you sing a change in consumer habits.
Speaker 4: Yeah, I'm a little bit confused about the reports around
Speaker 4: that because from my perspective, when we analyzed our numbers,
Speaker 4: and you know, again considering that we have over over
Speaker 4: half of the top one hundred US we tell us
Speaker 4: that we work with, we we do have quite attract
Speaker 4: you know, interesting numbers to follow these things.
Speaker 3: But my impression was that that you know.
Speaker 2: Christmas Is actually would have been a little bit softer
Speaker 2: that we saw about nine months ago, but thanks to
Speaker 2: a lot of discounting, the volumes were pushed up and that.
Speaker 3: Didn't really materialize.
Speaker 2: And now as I'm hearing some of these retailers report
Speaker 2: softing numbers, we actually see the opposite.
Speaker 3: Have seen quite a good.
Speaker 2: And strong solid sales in the US, so so not
Speaker 2: not really something we have been able.
Speaker 1: So okay, on the IPO, Sebastian, how much enthusiasm have
Speaker 1: you seen for that IPO so far?
Speaker 2: Well, we're very flattered by media attention to it, at
Speaker 2: least since it seems to be written about quite a lot.
Speaker 1: But I think that's like investors from investors.
Speaker 3: Yeah, I think that, like you know, from investors.
Speaker 2: I mean, obviously we had you know, one or two
Speaker 2: weeks ago a pretty you know, dramatic event in the
Speaker 2: stock market, right so that you know, you can kind
Speaker 2: of see I think before that there was like more
Speaker 2: of an acceptance we're going to go into a peer
Speaker 2: time where you know, IPOs are going to start happening
Speaker 2: in there's going to be more interesting in these But
Speaker 2: I mean, in our opinion, I think that what people
Speaker 2: really appreciate mostly about Klana is that two years ago
Speaker 2: this business was you know, very much attractive, growing fast
Speaker 2: in the US, but also loss making. And in just
Speaker 2: two years we have increased revenue by fifty percent, we
Speaker 2: have increased gross profit by one hundred percent, and we
Speaker 2: reduce costs in thirty percent, which means that now we're
Speaker 2: are you know, profitable, And I think those kind of
Speaker 2: financial performances obviously do raise the eyeboras a little bit
Speaker 2: with investors also, as we have, due to Ai, committed
Speaker 2: to continue shrinking the company. We've already gone from four
Speaker 2: to half thousand to three and a half thousand in
Speaker 2: the last year, and we are committed to continuing on
Speaker 2: that path, not by layoffs but simply by natural attrition.
Speaker 1: Yes, you've been an early mover on Jenai, and you
Speaker 1: reached out to Sam Moultman of Chat to ebt open
Speaker 1: Ai pretty pretty early on in all of this, what's
Speaker 1: been one of the most surprising things that stood out
Speaker 1: to you as you've embedded some of this GENAI across
Speaker 1: the business.
Speaker 2: Yeah, I think that it is to me in a
Speaker 2: way I would actually partially say this like I was
Speaker 2: even you know, kind of pulled into the hype a
Speaker 2: year ago where a little bit like we you know
Speaker 2: again self driving cars. You know, we used to read
Speaker 2: about them in the press every day and then you
Speaker 2: would look out.
Speaker 3: The window and like, where are they? Where are they
Speaker 3: not happening? And now it's actually happening.
Speaker 2: And I think that, like to somebody I was almost
Speaker 2: drawn into the hype a year ago as well, It's like, Okay,
Speaker 2: in the year you know, the whole thing will already
Speaker 2: have like totally dramatically change everything, and now you almost
Speaker 2: have the opposite. You hear people go oh, we tried it,
Speaker 2: and give us the results and so forth. But in tonally,
Speaker 2: what I'm seeing to plan is that it is working.
Speaker 2: It's just it will take a little bit further time
Speaker 2: before it will have the full implications.
Speaker 3: To us.
Speaker 2: We've already had delivered so fantastic results, but we were
Speaker 2: super excited.
Speaker 3: What's coming in the next.
Speaker 1: Four months before we let you go? It's about you, look,
Speaker 1: what do we win you back? You're going to list
Speaker 1: in the US. That's a suggestion, that's the expectation. What
Speaker 1: does Europe and the UK need to do? Is there
Speaker 1: anything they could do to win this listing?
Speaker 2: Well, one thing that I have said to regulators in
Speaker 2: the year, because there's been so much discussion in Brussels
Speaker 2: as well, how do we create a competitive market? And
Speaker 2: I have suggested actually get some positive from some of
Speaker 2: the foreign ministers. I was invited with all the finance
Speaker 2: finasters of you. Is that I think that if if
Speaker 2: Europe will never you know, will never agree on like where.
Speaker 3: Should listing should the big stock market be? Is it Prairi,
Speaker 3: is is it Frankfurt? Is it you know whatever, European country?
Speaker 2: So the only way to actually get this to work
Speaker 2: is if if you would mandate all the stockingcases in
Speaker 2: Europe so that any stock that is listed in one
Speaker 2: is automatically trading in another. I think that could reach
Speaker 2: the critical mass to create an investor base that is,
Speaker 2: you know, similar size the one we see in the US,
Speaker 2: because that's really one of the biggest challenges when you
Speaker 2: make US comparisons. If a company like ours is already
Speaker 2: mostly US business from revenue size, it will have to
Speaker 2: be a you know, a similar size and investment base
Speaker 2: and stock market size to make it a relevant listing point.
Speaker 1: Okay, look, Sebastian really appreciated time as ever really important
Speaker 1: updates coming through from the business clan a CEO and
Speaker 1: co founder Sebastian Cimatkowski on the latest Thank you, Sebastian.
Speaker 1: As that company of course prepares for that IPO likely
Speaker 1: the summer of next year, is what we understand