November 2021

Klarna is a fintech company with more than 1,600 employees worldwide. Founded in Sweden in 2005, to date it has raised €3 billion in investment and recently reached a valuation of €40 billion, thus becoming the highest valued startup in Europe.

Last May, the company announced the opening of an office in Madrid and its intention to create 500 jobs. Daniel Espejo is in charge of the Madrid office. In this interview, Mr. Espejo explains his future plans and what made them pay attention to the city.

M.I.A.: For those who don’t know it, could you tell us what Klarna is and what it does?

D.E.: Klarna is a fintech company in the ‘buy now pay later’ sector. In Spain, and in twenty other countries, we facilitate interest free payments in three months in any business that accepts Klarna.

The core of the ‘buy now pay later’ concept is to offer flexible payments. We work with more than 250,000 businesses around the world, from large companies, such as H&M, Expedia or Nike, to SMEs and people who have just opened their online business or physical store. And we have 90 million users that we know very well. We help firms do more business and increase sales through marketing campaigns and recruitment activities.

M.I.A.: Klarna is a Swedish company. When was it created and when did it arrive in Spain?

D.E.: In 2005. We already have a few years of experience. In Spain we launched almost two years ago, in June 2020, and since then we have experienced very promising growth. We have started to work with relevant brands, such as Singularu, and we recently reached one million users. One million people shop with Klarna.

M.I.A.: How does it work? If I go to a store that operates with Klarna, can I pay with your app?

D.E.: You don’t need to have the app. The Klarna user can go to, for example, Desigual and when paying, select Klarna as the means of payment. Then there is the app, which has over 200,000 downloads, and in which users can view their orders, manage returns, get inspiration, create wish lists …

M.I.A.: What is the user profile in Spain? Do we pay with a credit card as much as other countries?

D.E.: Although it may not seem like it, Spain has a high credit card penetration rate. But for a few years there has been a global trend among users, especially the youngest, to turn their backs on traditional credit cards and institutions. It is an industry that for years has charged quite high commissions. In the last five years, the number of credit cards in Spain has decreased by 20%, from 52 to 37 million. However, well-designed credit deals have many perks: you can try something before paying for it, increase your purchasing power…

In Sweden we do not have a typical user profile, because more than 50% of all e-commerce goes through Klarna. In countries where we have launched recently we do have a greater number of millennials, generation Z and a more feminine than masculine audience. As our business in the country grows and word spreads that you can pay in three installments and that we don’t charge interest, everyone ends up using it, not just young people.

M.I.A.: Klarna has offices in Stockholm, Berlin, Milan and now Madrid. What were you looking for when you opened in Madrid? An office for Spain, for southern Europe…?

D.E.: I’ve been chasing our CTO for a couple of years, talking to him about Madrid. I studied here and worked as an engineer. I know the sector very well and I know that in Madrid and in Spain there is a tremendous amount of talent. This is what lies behind our decision. A very interesting community has developed around technology companies and we thought that opening in Spain made perfect sense. Our goal is to hire 500 engineering, design, product and marketing staff to create a hub here.

M.I.A.: Did you work for Klarna before opening in Madrid? How did you convince them to open in Madrid?

D.E.: I was working for Klarna in Stockholm. When I saw the opportunity to open the Spanish market I said to them: hey, since we have a sales team, I think it makes sense to have a development team. In Madrid, a digital product will be developed for the whole world, not just for Spain. We are going to work on very interesting and powerful products that will be used by 250,000 stores. It is a challenge for anyone who likes to build products.

M.I.A.: Did Madrid compete against other Spanish cities?

D.E.: We evaluated all the options, but in the end we chose Madrid because it has very good universities and a lot of talent. It is a meeting point for people from the rest of Spain and where you can access a lot of highly skilled professionals from all Spanish-speaking countries.

M.I.A.: You aspire to hire 500 workers. How many have you employed already?

D.E.: I’ve lost count because we sign contracts every day (laughs). We must have about 70 people in the office right now. There are business development professionals, marketing specialists, data analysts, engineers, product developers… Also support and leadership staff, who make sure that the office is run perfectly and everything works.

There are many Spanish people, but there are also people from Sweden, from Paraguay, from Germany, from Portugal… 40% or 50% are foreigners. It is a very multicultural environment.

M.I.A.: How do you work internally? Are decisions made in Stockholm and derived to the rest of the hubs?

D.E.: We have turned that traditional management pyramid upside down. We are structured in what we call startups: teams of between eight and nine people who have a very well-defined problem to solve. They create their own goals, mission and vision as a team. So the decisions do not come from above, but from below: these teams propose ideas to work on at the C-level, which then validates. And all execution and tactical decisions are made in teams.

We want to focus on the employee, because the people who understand the finer details well are the ones who work on them constantly. And the decisions do not originate in Sweden, it is the other way round: all the teams from a number of countries send their recommendations to Sweden.

M.I.A.: You speak of talent and the ability to hire it. What makes Madrid attractive to Klarna’s management?

D.E.: Where to locate is irrelevant to us as long as we can create a community that grows fast enough. That is why it is important to be in a place with a large talent pool, where there are people who are highly skilled. If instead of Madrid this had been the case in any other city in Spain, we would have opted for it. But Madrid ticked all the boxes.

M.I.A.: Do you have any kind of program in place for employees to go to work from different hubs?

D.E.: We promote mobility so that knowledge flows freely between teams. We always encourage movement, it is part of the culture. We question the status quo and part of that is achieved when you see how things are done elsewhere. How do our colleagues in Germany break down their market barriers? Seeing people who do the same as you, but from other perspectives, is very enriching.

M.I.A.: The announcement of the opening of the Madrid office was made together with the Mayor. How did it come about? Were you already in touch with the City Council?

D.E.: We were in contact with Madrid Futuro when we evaluated various places to open the hub. We spoke with the mayor on several occasions to fully understand his plans in the city. He wanted to fully understand our plans in Klarna. In the end he loved the project we had and asked us to do a joint press release.

Attracting talent is a high priority for any city mayor. They are trying to make Madrid a place where national companies can prosper, where there is a breeding ground for startups to flourish but also a place where companies come seeking to grow or to find top-notch talent.

M.I.A.: How has the City Council helped you?

D.E.: Madrid Futuro is helping us to get in touch with universities. It is a quick way to reach talent, especially young people. They have put us in contact with companies that will help us find qualified professionals, because we do almost everything internally. In the future, surely, the events organized by the mayor’s office could be interesting for the promotion of Klarna. So that we are known not only from the user’s point of view, but also as a company people want to work for.