> Klarna is the winner in BNPL
lol what a bold and wrong statement
lol what a bold and wrong statement
US Affirm is publicly valued at 34.55B.
AUS Afterpay is publicly valued at 31.19.
I don’t think it is a bold statement. All the major competitors are pretty close.
The fee from merchants is interesting because the claim is: the fee from merchants is going to be larger than the losses from making bad loans (and the costs of servicing). I am very sceptical of this. Management describe their underwriting model as largely using stuff like the product bought, the retailer used, the value of the order...it just sounds very suspect. And that is before you consider the valuation, the legislative risks, the interest rate risk (doing 0% loans stops making sense if interest rates rise), etc. I am in the UK and these kind of businesses usually trade at very low multiples because the regulation in the space is so high.
I would regard $10bn market cap as a pretty jazzy valuation for Affirm, the stock is at $35bn.
But I don't think most banks issuing credit cards are in this business yet. And of course making normal purchases on credit cards is a terrible way to "buy now pay later" because the interest rates are so ridiculously high.
It will be interesting to see if more banks get into this market seeing how successful Klarna, Affirm, etc. seem to be, because it does eat into their existing high interest rate profits on credit cards.
We'll see how things shake out. Calling them 'the winner' of the market is just odd.
Calling them the winner right now is fine. They are winning.
They have not won though. The game is still on.