A significant rise in expenditures as the company adjusted to growth in demand for its purchase now, pay later services saw the losses at Klarna, the fintech start-up from Sweden, increase3d dramatically in the first nine months of 2021.

From January to September, the Stockholm-based company lost 3.1 billion Swedish krona ($344 million), a fourfold increase from the 800 million krona it lost the previous year.

Klarna, which was recently valued at $46 billion in the private market, posted net operating income of 9.8 billion krona, up 40 per cent over the previous year.

General administrative expenditures, which totaled 9.5 billion krona, up from 5.9 billion krona previous year, accounted for the great majority of the losses.

There was also a significant rise in credit losses during the period, totalling 2.9 billion krona so far this year, compared to 1.6 billion krona in the same period last year.

According to a Klarna spokeswoman, the company has expanded into nine additional regions since the beginning of 2020, and currently has more than 90 million clients globally.

“Each market entry follows a consistent financial trajectory; as volumes grow, and more customers use Klarna, market knowledge improves and credit risk decreases, making mature markets sustainably profitable,” the spokesperson said in an emailed statement to the media.

Klarna is a major participant in the rapidly expanding buy now, pay later (BNPL) business. BNPL products allow customers to spread the cost of their purchases over a number of equal monthly instalments, typically with no interest.

The fees that Klarna and competitors like Afterpay and Affirm charge merchants for processing transactions are how they make the majority of their money. Late payment penalties and interest on longer-term instalment loans are also profitable for some.

The coronavirus pandemic has accelerated e-commerce adoption, which has resulted in a surge in demand for BNPL items during the last year.

To finance their purchases, millions of people now use a buy now, pay later service. And there are more possibilities than ever before.

Meanwhile, major corporations are coming on board, with PayPal creating its own service, Amazon and Apple collaborating with Affirm, and Square agreeing to purchase Afterpay for $29 billion.

Klarna has recently been actively growing into the United States and the United Kingdom. According to numbers supplied to the media by research firm YipitData, the company had a roughly 18 percent share of the US BNPL market as of Nov. 17, lagging behind Affirm, which had a 36 percent market share, and Afterpay, which had a 21 percent market share.

Klarna has embarked on a charm offensive in the United Kingdom, engaging with key politicians ahead of new legislation that will put the BNPL industry under regulatory control.

(Adapted from CNBC.com)