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Shares of buy now, pay later firm Klana are set to begin trading today. The company, in some of its backers, sold over thirty four million shares at forty dollars each, giving Klana a market value of about fifteen point one billion dollars. We're joined now by Klana CEO Sebastian Shimmi and Koski Sebastian. First of all, congratulations to you. Caroline and I have quizzed you over the years on when an IPO happens, why it happens. I just want to bring you some news if I may. In the time
that we've come on air. There's a headline on the Bloomberg terminal that the shares are indicated to open between fifty and fifty two dollars each. You price the IPO at forty. Just summarize your reaction to that and what it means to you on a daylight today.
I'm happy I didn't hear what you said on the price, or I pretend not to hear it so I don't have to comment on it. We'll find out. Like I'm you know, I'm very I'm wroteing my looking forward to welcome new shareholders for the company, and I think there's decades of growth and opportunity ahead of ourselves, So I feel very excited about this.
Today we introdu you as a buy now, pay later firm that increasingly when you've come on this program, we've talked about Klana is an everything app. How does this IPO reposition you into that domain?
Well, look, I think that was actually my biggest happy moments from the IPO. There were two from the road show. One. I got very few questions about buying Appy later, and a lot about our card and how it's growing. We've signed up seven hundred thousand new Americans in the last six weeks to our card. We have five million people on the waiting list. But the best part of the road show, I tell you, was when we signed into one to the reception and one of our investors, the
guy in the reception said, oh, you're from Clana. He's like, yes, do you use it? I love it? I use it all the time. And I was like, oh, but what can we do better? He's like, nothing, just get me the card. So that was that was the best moment from the whole road show.
It's it's like a marketing event. When one goes public, you get your name in other people's mindset. Here in the United States, will you go for a banking license? Talk us through where the growth story is going forward?
Sure? No, Look there, we have a bank license in Europe, as you're well aware of. We've had it for ten years. It's fantastic, gives us access to deposits. It's a very effective way of funding. Our banag sheet allows us actually to do it more cheaply than our competitors. But I think the key thing is in the US there's this group McKinsey showed us in a study already ten years ago. They're called self aware of voids. These are people who've
tried the credit card. It actually makes slightly more than your low income household and medium houses in household income. They are they try the card, they tried revolving. They say it's it's the product of the devil. They don't want to get in four thousand dollars of credit card debt with you know, twenty thirty percent interest. They love
by an appulator, and they love our card. They love the opportunity to put most things on debit and then occasionally put it on interest free installments very cost effective. So that's the target audience, twenty percent of the American households. And you know now we have twenty six million users in the US, so we're seeing a lot of pickup, seeing.
Pickup, You're seeing pick up in your shares. You are significantly oversubscribed, as we told you, and you chose not to hear that you're currently seeing shares being indicated much higher than even that they priced. That did you sell too low? I know you're a man that's had to stomach variations in your market capitalization in history. What does it mean to you to have evaluation out there in public more broadly every day.
Well, look, to be honest, personally, I'm not selling a single share in this IPO. I am, you know, a long term shareholder. I love this company, been doing this for two decades to a long period of time. But fortunately I was twenty three when we started, so I'm not that all yet and I hope to continue for
a few decades. And if you're truly going to disrupt treata banking and you know, and change this industry that has you know, a mass so much excess profit because of the lack of competition, the lack of customer focus, and you want to bring that back and you want to create a better service for customers. That's going to
take some time, though. This is not something you do overnight, and I just look forward to doing that, and then investors will occasionally lean more into the future and occasionally lean more into profit today and so forth, and that will vary, and you know, it's up to everyone to take that decision for themselves.
Sebastily. The mechanism in this IPO is really important because you didn't raise like a huge amount of money, and on this program recently we've done all the reporting on some of your peers, like Revolute, doing transactions to stay private deliberately. So you faced a choice and you chose to go public. What was the main motivation?
I think that you know, again, to your point, we only raised two hundred million dollars right in this IPO because the company is, you know, self sustainable from a capital perspective, doing really well, so there's no real need. I think that the key thing is we've had twenty years of private investors, employees bought into the stock, and over time it became quite an effort to keep track of private transaction in Google sheets, right, So now it's a little bit more efficient to trade the stock on
the market. Gives people who's been with us for many decades the ability to get some liquid out, but most people are not selling much. And at the same point of time, fantastic to welcome new shareholders to the cap table who want to join what we're trying to revolutionize in retail banking. So I'm super excited about So.
Which you kind of illustrate outline what the competitive landscape looks like to you, who your competitors are, and also the regulatory headwinds that you're bracing. For sure.
I mean people will always mention a firm revolute, and we are very impressed by those companies, very inspired by them. But the truth is credit card industry is a one point three trillion dollar revenue market. So I would say it's mostly the incumbents, the old banks that are you know, the opportunity and where the competition is and what we
can grab market share. And the problem for them is, you know, if you have a credit card program that's running at thirty percent interest and you're revolving people at four thousand dollars and you look at Klona's payment model where our average outstanding balance is one hundred dollars and zero percent interest. You're not too keen. You don't want to jump into that. You don't want to lose all the profit you're making. But for us, it's just opportunity.
It does upside, you know, grab more market share, become larger. It works well for us. We make money out of that, you know. So it's that's what we see is the primary competition on the regulatory side. Look, I think at the core of it, if ten years from now, less people use credit cards and more people use debit cards and occasionally buy an appy lator, that's a better that's
a better society. And as we get the chance to sit down and take all the noise away from media and so forth, to actually explain and show our losses are thirty percent lower than credit cards, our consumers are borrowing much less.
You know.
I had this conversation to add a conversation with a customer. She was like, yeah, my mom called me and she was like, are you using this dangerous thing called binacty lated with Klana And she told her moms like, mom, you have a credit card? Right? Yeah? How much depth. Do you have four thousand dollars, what's your interest thirty percent? Which is like Mom, I'm borrowing one hundred dollars a
zero percent interest? Who is financially responsible? And you get those that message across, then you realize that regulators actually start embracing and seeing value in that we're bringing competition to a market that has, you know, extracted excess profit out of customers by tactics that are not in the customer's best interest.
Agree, and your tactic in many ways has been to embrace efficiency, adopting generator AI in the workforce in particular within the product. How much more can you focus in on margins? How much more are you going to have to keep hiring to scale and to sell?
Well, the truth is right, we haven't hired people for two years. We've shranked the company from seven thousand to three thousand, four hundred to three thousand people, which is fantastic, but I would say we've probably over indexed a libit
on efficiency. And now the last six nine months we've taken much more focus on how do we take all the learnings We've used ourselves as employees as guinea pigs for all these AI software, all these tools we took out all the SaaS software to salesforce and all that, and now what we want to do we want to bring that to our customers. We want to bring that
to theirmercions. We're very excited in the coming weeks and months to launch AI powered customer retail banking apps that we believe are going to be tremendously more valuable and create more values, save time, save money for our customers and make them feel and control of their finances. So it's very exciting to use AI now to create the next generation of financial services.
So Sebasti, you're a public company now, so you have coarsely earnings. But I want to end by asking what the metric is that you will gauge plan as success by what is the kind of milestone that you are holding your company to from this point?
Well, it's very easy. You mentioned already resolute in the firm clan has focused in the last few years has been let's get as many users as possible. It's thet'll be like Facebook, right, you want to get as many users as possible. We're now at one hundred eleven million. That means, you know, a firm I think is less than thirty revolute fifty. We're one hundred eleven million uses, but our revenue per customer is not like as much
as there, and that is it. You know, revenue per customer is the one metric now because we know that when we start launching things like the car and we see massive pickup from our audience. So now obviously we want to reach similar revenue for customers we're seeing our main competitors and that has the potential of bringing us from a revenue size company as well to a different level. So that is the key metric right now. Revenue for customer.
I do know it's best in Shimunkowski plan a CEO the Blockbuster hat I that bodes about the IPO rather than the future business model. We say appreciate you being here with us today live from the New York Stuck Exchange