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