The U.S. is now Swedish payment giant Klarna’s biggest market by revenue, surpassing Germany, and that has CEO and co-founder Sebastian Siemiatkowski feeling proud.

In an exclusive interview with TechCrunch, Siemiatkowski shared that Klarna saw a 71% year-over-year increase in Gross Merchandise Value (GMV) in the U.S. last year compared to 2021.

“When you were just a Polish immigrant kid living in this small country in the northern part of Europe called Sweden, this is like the big dream,” Siemiatkowski quipped. “I feel like we’re singing ‘if you can make it here, you can make it anywhere.’ It’s always been a boyhood dream of mine, I think for the whole company actually, to be successful in the U.S.”

Klarna’s big push into the U.S. market was with its BNPL (buy now, pay later) product, which didn’t really take off until around 2018 and 2019, according to the executive.

Then the COVID-19 pandemic hit globally and suddenly, Siemiatkowski went from traveling to places such as the Midwest where U.S. retailers had headquarters to hold a meeting per day to conducting multiple meetings per day from the comfort of his own home.

Even then, Siemiatkowski says he was “very personally involved” in the effort to attract U.S. merchants to work with Klarna – doing a 30-minute pitch before letting his team take over.

“It was an amazing way for me to get really, really close [to merchants] and get great feedback,” he recalls.

It seems that effort has paid off. 

The 71% jump in GMV is what helped push the U.S. to overtake even countries in its home continent of Europe to become 18-year-old Klarna’s largest market by revenue. Today, Klarna has 34 million users in the U.S. and its retailer network in the country includes businesses across multiple verticals such as Instacart, Tractor Supply Company, Groupon, Samsung, Etsy and Fossil Group. They join the company’s network of over 500,000 retailers globally.

“In Germany, 80% of the adult population uses Klarna every year,” Siemiatkowski said. “So in the U.S., we believe we are still in the very early phase. And a lot of that is still up to us – how well we do with merchants and consumers.”

Further evidence of Klarna’s growing popularity in the U.S. lies in the fact that the company now has over 8 million monthly active app users and 30 million total downloads in the U.S. That compares to 6 million monthly active app users in the U.S. in February 2022.

One feature of the app is that consumers can shop in installments using Klarna even with merchants who are not partners with the company. This has given the payments giant an “in” with such merchants.

“We wanted to make sure that consumers would be able to use Klarna everywhere. So we created a browser that allows you to go to any website like Amazon, and you have this Klarna button at the bottom. So now suddenly, you can use Klarna at any website, and it doesn’t matter if they’re an existing client merchant or not,” Siemiatkowski told TechCrunch. “This has become massive and we now do over $6 billion worth of volume through this.”

Going beyond giving people a way to pay for installments strictly online, the Klarna Card went live last June in the U.S. after amassing a 1 million person wait list. The fintech company touts the card gives consumers a way to pay over time in four, interest-free payments using a physical card with no down payment for any store or online purchase.

While giving people the option to pay in installments or what is commonly known these days as buy now, pay later is only one part of Klarna’s business these days, emphasizes Siemiatkowski. 

The app has evolved over time into what Klarna describes as “an end-to-end shopping destination” for consumers with features beyond payments such as money management tools, delivery tracking, wish lists, digital receipts and price drop notifications.

“We’ve been stamped as a BNPL provider but that’s not true anymore – even if it was years ago. We offer tons of other use cases that are growing at a much faster pace than the original BNPL product,” Siemiatkowski said. “But the stamp is there so it takes a little time to get people to recognize the change.”

Klarna also announced today that its credit losses in the U.S. have dropped 37%. As the company grows in the U.S. and has more returning customers – enabling it to build a better risk profile, Siemiatkowski believes that the number of credit losses will only decline – despite a worsening macro trend in the U.S.

“We’re still so early so what we do internally matters more than macro conditions in this case,” he said.

The executive also revealed that despite Klarna and U.S.-based BNPL giant Affirm often being lumped together, he views the two companies as “very different.”

“Most of their purchases are spread over time, such as a two-year period,” Siemiatkowski said. “With Klarna, it’s more like four weeks – so it’s very short and for small amounts, with the average purchase being around $100. Ours is a different type of credit – very short term, installment-based and most of it carries 0% interest.”

The majority of Klarna’s revenue globally comes from charging retailers a fee to offer its services to their customers, similar to those retailers already pay for credit card transaction processing. Klarna says it goes a step further by providing them with payment services, reduced financial risk through its interest-free’ Pay Now’ and Pay Later products, and increasingly tailored marketing support that helps them connect with consumers.

In fact, interestingly, the fastest growing revenue stream for the company today lies in its marketing offerings, according to Siemiatkowski. Klarna offers retailers things such as ads and sponsored content in the Klarna app, virtual shopping and shoppable videos, among other things. Specifically, over 100 of the “top” U.S. retailers are partnering with Klarna for marketing in an effort to reach new consumer audiences. 

“Touch points in our app help customers find new partners and merchants,” Siemiatkowski said. “And, retailers are looking for new ways to be introduced to relevant consumers.”

Still, all the positive momentum in the U.S. doesn’t take away from the fact that 2022 was a very challenging year for all BNPL providers and Klarna was no exception. Last August, CNBC reported that Klarna recorded a pre-tax loss of nearly 6.2 billion Swedish krona for the first half of 2022, up from 1.8 billion krona in the same period a year ago. The company also saw its valuation plunge by 85% – from $45 billion in July 2021 to $6.7 billion one year later. Klarna also last year conducted at least two rounds of layoffs, impacting several hundred employees in total. Affirm too has had its own share of struggles, recently laying off 500 employees and also seeing its valuation decline to just under $3.8 billion.

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