Klarna Shuts Down Klarna Kosma As Part Of Marketing Move

Klarna has shut down its open banking division known as Klarna Kosma. This division is being shut down by the company in less than 18 months since it was launched. The Klarna Kosma brand and business division was unveiled in April 2022 by the Swedish BNPL giant.

Klarna closes open banking brand

Klarna Kosma hosts the open banking division by Klarna. The launch of this unit happened at a time when interest across the open banking sector was high. The unit allowed clients at Kosma to access a wide range of offerings.

The main functions of Klarna Kosma include account aggregation, indicating that the clients on the platform can obtain access to the Klarna API and obtain access to account statements. These clients can also access a wide range of banking information, and data gathered from 15,000 banks globally.

The other service offered by Klarna Kosma includes account-to-account payments, which boosts the convenience available to the institution’s clients. The launch of this open banking division by Klarna was seen as a move taken by the company to gain a competitive edge against major players in the sector, such as Tlnk and Plaid by Visa and TrueLayer.

Klarna noted that the decision to shut down this unit was arrived at last month. The company noted that the decision was part of a marketing initiative, adding that the constituent parts of the business will still remain. Klarna also said that shutting down the unit has not resulted in any layoffs.

This division will continue operating as a separate brand that will be led by the VP of Klarna Kosma, Wilko Klassen. The company plans to have this brand achieve its own identity. Instead, the majority of the divisions that have been working well so far will be integrated under the broader Klarna brand.

Even after the closure of this division, Klarna Kosma will continue serving as the product brand for the Klarna API business. As such, the company is not doing away with this brand in its entirety. Instead, it will be folding it under the existing services to ensure that it continues serving the interests of clients.

Klarna Kosma’s financial performance

In May, Klarna Kosma posted its results for the first quarter of 2023. During the quarter, the company posted a loss of $120 million, which was around half of what was reported during the same quarter in 2022. At the time, the company said it was on track to attain profitability during the second half of the year.

In 2022, Klarna posted negative results and even laid off employees. It also posted an 85% decline in valuation to $6.7 billion. A spokesperson from the company opined that since the launch of Klarna Kosma in 2022, the open banking division has achieved significant growth.

Following the success of this open banking division, Klarna decided to link more with the brand so that this open banking unit no longer operates as a separate brand. Instead, Klarna Kosma will now exist under the Klarna corporate brand.