Fintech Recap: Klarna Goes Public, Mercury Splits, and Lending…Can Hurt

Apr 9, 2025

Klarna has officially gone public, raising questions about its profitability and looming credit losses. The hosts debate the project's impact on the BNPL landscape and its strategic moves, including a partnership with Walmart. Meanwhile, tensions between Mercury and Evolv highlight issues in fintech partnerships. The conversation also tackles the often painful lessons learned in lending, illustrating the risks involved. Lastly, the growing concern over gamified investments reflects on the industry's responsibility towards consumer well-being.

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INSIGHT

Klarna vs. Affirm Business Models

Klarna and Affirm, while both in BNPL, operate very differently.
Klarna focuses on pay-in-four and pay-now transactions, unlike Affirm's installment lending.

ANECDOTE

Klarna's Walmart Deal

Klarna's "exclusive" Walmart deal is misleading; Walmart rarely offers full exclusives.
The deal focuses on OnePay, Walmart's fintech arm, offering Klarna-backed installment loans.

INSIGHT

Klarna's Misleading Profitability

Klarna's reported profitability is misleading, driven by selling Klarna Checkout.
Their operating income was actually negative, unlike their presented figures.

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Welcome back to the Fintech Takes podcast. I’m Alex Johnson, and as always, I’m joined by my partner-in-crime, Jason Mikula. Today, we’re unpacking Klarna’s public debut, the growing rift between Mercury and Evolv, and why getting wrecked might just be the best education in lending

First up, the BNPL giant Klarna has finally gone public, filing an F1 as a foreign entity. Now as a public company, we’ll get to see their actual numbers. With 93M active consumers, Klarna isn’t small, but its path to profitability is still a question mark. The key stat? Transaction margins. Klarna’s European banking license gives it an advantage in low-interest rate markets, but as it pushes deeper into the U.S., credit losses are an issue. The big question: can Klarna mature fast enough to bring those losses down?

Next, we’re diving into the fallout between Mercury and Evolv. Mercury has stopped onboarding customers through Evolv and is actively shifting accounts elsewhere—publicly, at that. Meanwhile, Evolv seems caught off guard for Mercury’s departure, with mixed signals on whether this was a surprise or a slow-moving train wreck. So, what really happened? And what does it say about the state of fintech-banking relationships?

And finally, is taking a beating the only way to master lending? We think so. The right order? Start with lending, get punched in the face by risk, and then consider a bank charter. Doing it the other way around? Painful. Avoidable. And yet...it keeps happening. Please stop!

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