Affirm's COO Michael Linford said the company wasn't interested in competing with Klarna for Walmart's business because doing so wouldn't have made economic sense, as Walmart accounts for only a sliver of its business.
Lindford told a William Blair analyst, “We felt like it was important to draw the line and not do deals that we thought were uneconomic.”
Walmart, which Affirm first partnered with in 2019, made up about 5% of the company's GMV and 2% of its adjusted operating income in the second half of last year.
Last month, Klarna disclosed that it would be the sole provider of BNPL loans through OnePay, a Walmart-backed app that customers can use to pay in-store or online. It was recently revealed that Klarna had to offer Walmart 15.3M warrants that can be converted into Klarna stock, valued at $500M, in order to land the exclusive partnership.
Wow, Klarna is really desperate to have a successful IPO and are pulling out all the stops! It makes sense though, as Klarna's had a tumultuous past few years, with their valuation spiking to $45.6B in June 2021 and then subsequently plummeting to $6.7B the following year.
The company contemplated an IPO in 2021, but decided not to proceed due to unfavorable market conditions. They confidentially filed to go public in November 2024, and last month publicly filed its IPO prospectus, planning to list on the NYSE under the ticker symbol “KLAR” — but two days ago, Klarna revealed that they've decided to postpone their IPO yet again due to newly announced tariffs and other market conditions. Klarna was aiming to raise more than $1B at a more than $15B valuation. Ticketing marketplace StubHub has also delayed its IPO plans, citing similar reasons. Oh well, there's always 2029!
I wonder if Klarna regrets the recent deal with Walmart, given that the impact of the announcement will likely wear off by the time they file again.