Payments company Klarna Bank AB grew revenue by about a third in 2018, but operating income fell and the speed at which merchants are signing up to the platform slowed.

Klarna, which recently turned to Snoop Dogg to promote its online services, added 14,500 merchants in 2018 to its platform, down from 26,000 new merchants in 2017.

The Stockholm-based startup helps online shoppers arrange for financing at the point of sale with a few clicks, and is one new challenger to companies such as PayPal Holdings Inc., Square Inc. and Adyen NV, each with their own twist on facilitating commerce between merchants and shoppers.

Klarna’s total operating revenues hit 5.45 billion kronor ($590 million) over 2018, up by about a third year-on-year, but operating income fell to 161 million kronor ($17.4 million), down from 524 million ($56.7 million) kronor in 2017. The company put this down to a “significant increase” in investment flagged at the beginning of 2018.

The company closed its Tel Aviv site and its debt collection business in 2018. In November, it received approval to operate a banking branch in the U.K.

Founded in Sweden in 2005, the company now has over 100,000 merchants using its payment solutions for online and in-store purchases. It was valued at $2.25 billion in 2015 when a group of insiders sold shares privately.

Published Feb 28, 2019, 4:07:10 AM, by Giles Turner (Bloomberg)