Sebastian Siematkowski, the 31-year-old CEO of Klarna, one of Europe’s fastest growing internet companies, talks childhood ambitions, exit options and Jules Verne.
Klarna CEO Sebastian Siematkowski once spent 24 hours in New Zealand, in the port city of Tauranga, after pulling into town on a cargo ship.
There’s a good story behind that, and one he’s happy to share. He and Niklas Adalberth, a friend from the Stockholm School of Economics, wanted to go backpacking. Problem was, they couldn’t decide where. “Nobody really knows but probably during some late night with a couple of drinks, someone said ‘let’s go around the world without flying and make it a project’,” he says.
So he and Adalberth, who he went on to found online payments company Klarna with in 2005, did exactly that. It was the trip of a lifetime, a time of constant change. “Change is not always enjoyable,” he says now. “Sometimes it is challenging and tough, but it is always memorable, and that’s what makes a difference in the long-run.”
A Swedish Phileas Fogg?
Yet, in some ways, the trip became like 80 Days Around the World by Jules Verne – a favourite book of Siematkowski’s from childhood, and one he read again while on the trip. The book’s protagonist, Phileas Fogg, is so focused on meeting his time targets and getting back to London that he doesn’t really get to see the eccentric and fantastic places he’s passing through.
Siematkowski and Adalberth kind of did the same thing, he reflects now. “We were so focused, we had a limited amount of money, we needed to get back on time. We were like, OK, here is Angkor Wat, good, take a picture, next place, checklist…”
Need for speed – “We want things to happen yesterday”
Siematkowski’s keynote speech at Heureka! this year suggested a similarly fast-paced, goal-driven approach to business – long hours, late nights, hard talk of winning new markets. A favourite quote comes from IKEA founder Ingwar Kamprad: “When you’re becoming really tired and it’s getting close to 3 or 4am, get some cold water and put your feet in it. That will make you endure a little bit more.”
Now, speaking one-on-one, it’s a bit more nuanced. He agrees he and his co-founders, Adalberth and Victor Jacobsson (who has just left the company), share a need for speed. “We want things to happen yesterday,” he says.
That, and a willingness to leave the conventional path of a Stockholm School of Economics grad: “Everyone else wanted to go into investment banking and I was also considering, maybe that’s what you’re supposed to do, move to London – this was 2004, 2003 so it was very attractive at the time,” he says.
Eight years on, Klarna has expanded into seven countries, most recently Austria, raised $166million including from General Atlantic, Yuri Milner’s DST and Sequoia, and employs about 750 people. It claims to handle over $2.5billion worth of transactions per year for 15,000 merchants across Europe.
Keeping it profitable – and new play Klarna Checkout
Of course, speed isn’t everything in business, and especially not for Klarna. The company is regulated as a bank, which rules out the super aggressive, loss-making growth practised by e-commerce companies such as Rocket Internet’s Zalando.
“We have some expectations of being profitable,” Siematkoswki explains. “It’s not a lot in that margin. It’s a little bit, but it’s always been black numbers and that’s been important to us.”
Klarna’s first product is a “buy first, pay later” solution, similar to PayPal’s BillMeLater. Now, the company is rolling out a new product – Klarna Checkout, a complete payment solution that means, depending on Klarna’s risk assessment and identification process, all purchasers may need to do is enter their email address and zipcode. New users can sign in via Facebook, and all types of payments are supported.
Childhood ambitions – and the path towards business
Siematkowski attributes his drive to succeed in business in part to his childhood. His parents moved from Poland to Sweden at the beginning of the ’80s. Cash was tight and, when his parents separated, Siematkowski decided that was to blame.
“Which is a childish understanding of an adult relationship,” he says. “But still. I think when I came out, 17, 18 years old, I remember people asking me, why do you apply for the Stockholm School of Economics?… I heard that if you go to this school you become rich, but I had no understanding of what I would actually work with.”
“I don’t think I would start another company… I would probably write a book, or get into politics”
Today, if he wasn’t running a company, he thinks he’d like to write a book, or get into politics. “I don’t know. Something else… I don’t think I would start another company.”
Is Klarna at the point where they’re discussing exit options, then? “No, I’m not thinking about leaving,” he says. “We’re very dedicated to continuing what we’re doing.” An IPO is a possible eventual option, but still years away.
For now, he’s hooked on Klarna’s progress. “As long as I see that ‘fantastic, these things are moving’. As long as I don’t feel like I’m a liability for the company, that I haven’t been able to scale with the company and I’m a too-junior manager…
“As long as I don’t see that, or nobody tells me that, I’m happy to continue many more years. Then, you know, is it going to be 10 years or 20 years or 30? I have no idea.”
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