# Klarna CEO on AI-Driven Efficiency and SaaS Disruption

**Podcast:** The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
**Published:** 2026-02-16

## Transcript

We used to be 6,000 or over 7,000 people, and we're now less than 3,000.
And I didn't ask for a single dime to do all this.
And the reason for that is because I've seen the acceleration of AI, and I know we can ship all these things on the existing organization.
We've gone from 7,000 people.
We're now below 3,000.
We've shrank 50%.
This is what I signed up for.
It is stressful.
It was hard as hell, but this is what I wanted.
The next thing that's going to hit everyone bad is...
the switching cost of data.
This is 20VC with me, Harry Stebbings.
Now we have an incredible episode today.
Seb from Klarna is probably one of the leading figures in how to implement and use AI effectively to shrink headcount and make your business way more efficient.
This was one of the most wide ranging conversations we've had.
Seb was just awesome in the studio.
It's a fucking great show.
I love doing it.
He was incredible.
Let me know what you think.
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We've done this before, but to have you here in person is fantastic.
So thank you for joining me.
I am so happy to be here.
This is going to be a lot of fun.
Dude, this is going to be great.
So this is also going to be the best show you've ever done.
You've done a lot of shows.
I'm telling you already.
Dude, where the fuck is value in a world of anthropic and clawed code wiping billions of dollars off a stock market?
How should I think about that?
You should think that cost of creating software is going down to zero.
And that means that everyone will be able to generate software at any point in time.
So it is a massive change.
And I was 100% convicted about this already when I saw this one or two years ago.
So that's been very, very clear to me.
If the cost of software creation is going down, how do we determine which businesses have sustaining value versus which do not?
So the key thing right now is so far, the only thing that's gone down to...
or not to zero yet, but become extremely much cheaper, is the generation of software.
The next thing that's going to hit everyone bad is the switching cost of data.
Because so far what you're seeing is you have proprietary data stuck in, for example, the CRM vendor or the other software as a service that you're using currently.
So you may replicate and build the same dashboard or build the same processes in your own tool, but all your data is in there according to their data model, according to their setup.
What's going to happen is people are going to start solving that problem.
How do I get all of my data from the existing vendor and move it to the new vendor with the help of AI through one click?
That brings down switching cost.
And that's when the real threat to SaaS comes.
So we had a niche from Andreessen on the show, one of their GPs, and he said agents in particular will dramatically reduce the friction of switching.
Yes.
Is that the method of which you're talking about, which will allow for this migration to happen?
Exactly.
That's exactly what's on here.
It's going to happen.
It's happening already.
If that is the case, should ERPs and ServiceNows and sales forces not be dramatically threatened?
I think the stock market woke up to that in the last few weeks, right?
It's not like any business is going to disappear overnight because people tend to stick.
They have used these things for a long period of time.
They like them, etc.
The question is, what multiples should they trade?
And if you look at historically, software could trade at a price to sales.
I'm not going to talk price to earnings because some of them are unprofitable, so it's not an easy way to compare.
But if you do price to sales, they've been trading at 20, 30.
And now they're down at 5, 10.
But if you look at utilities, normal companies that are more utility, they may trade at 1 to 2.
So from that perspective, you would argue there is still some unfortunate potential to come down even further.
Look at Chegg in the US, right?
They're now trading at 0.2.
ChatGPT was seen as basically wiping out their business.
a few years, and now they're trading at a depressed value.
And now the revenue is also coming down, actually 30%, 40% last time I checked.
Is that going to happen?
I don't think so.
That's probably too extreme.
0.2 would be very extreme for some of these companies.
But is it likely they could come down to one or two?
Yes, I think so.
My question to you is that there's this kind of consensus from all investors, which is always a worrying thing.
If you think that we're really going to Vibecode a lot of these tools internally, you've never worked in a big organization.
The permissions, the hierarchy that ensues with the implementation of these tools, we are not going to see large companies Vibecode mission-critical systems, and they will keep the largest systems of record.
How do you think about that when David Sattie says that?
No, I understand that some people have that opinion.
I am not, because I think one thing is also like...
Currently, the way AI is set up, and I've already started seeing people doing this differently, but one thing is, right now, AI is allowing us to reinvent the wheel all the time.
So if you come in and say, I want to write this piece of code, somebody else prompted the same AI, the exact same thing, somewhere else, we're still using tons of server power to generate the exact same code.
Well, people are going to start realizing why.
Why don't I cache these things if I'm getting the same question, if I'm getting the same or why don't I use existing open source components and reuse software?
Like what if software becomes more like Lego pieces that you put together that perfect?
It's going to be more and more efficient to just like bundle things together.
And this also means that.
Things like what you're talking about is production ready, security assured, and all these things.
They will become more and more standardized building blocks.
And I think in the future, I'm not sure AI was even going to code that much.
It's just going to pick some pieces together and stitch them together to come to what you really need, which also actually means less need for compute.
The other argument is enterprise software spends about 8-12% of company budgets.
And you look at that and you go, well, hang on a minute.
Our core business is X.
why the are we building a monday replica or a you name it replica that's not our core business why spend the internal resources on it how do you justify that man i i think that's to some degree correct but like funny the same weekend that this whole claude bot thing exploded on x i was actually sitting myself and playing around with a project which i was just calling company in a box And the idea was just, I just wanted to test a little bit.
And the idea was to do very similar what CloudBot did, but for a small company.
And I just put like a small workspace in there was accounting.
And in that I put an open source accounting software.
And then I put like a CRM and I put an open source CRM.
And then I put the CloudAgent on top of that.
And then I told my CloudAgent, hey, can you book keep this invoice for me?
Or hey, can you set up this customer account for me on top of that software, right?
And it worked really, really nice.
I just wanted to test the idea because the point is that, and that's actually where it's also, I see the risks of even more jobs being threatened because to some degree, if I'm a small company today, then I may have an accountant firm that's helped me with accounting.
And those are the ones I would email like, hey, can you fix this invoice or how much money do I have on my cash?
What's the current P&L look like, etc.
But now I have Claude as an accountant on top of the accounting open source software.
And then I'm just asking, hey, book keep this, you know, book keep this invoice or check me my balance.
And it works really, really well.
So I think I'm not saying I don't think the plumbing firm, the electrician of the future will code the Vibe code this themselves.
Definitely not.
They will buy off the shelf products for this.
But the thing is, the question is most of our ERP systems that we see today or software as a service, because coding was so difficult and hard are still fairly siloed.
they are not broad in their spectrum of what they cover.
And the kind of winner of the future is much more likely to be extremely broad.
They're kind of coming with a cloud bot or a cloud bot of companies like those services.
That's how I think the future of that kind of thing is.
It's different for a company like Klarna, because in our case, to some degree, this is the operating system of the company.
And what we realized when we looked at SaaS and all these things already two years ago, which is why we started closing down SaaS for us was because we need to provide our AI the best context.
We need to provide as good context as possible to be able to perform a job.
And if your data is separated in these silos, a little bit in this SaaS, a little bit in that SaaS, a little bit here, here's all the project management stuff, here's all the product definitions, here is the accounting stuff, here is this, here's that.
It's just harder to provide the appropriate context, right?
So to us, it was like, no, we need to reimagine the tech stack with AI first, being AI native.
and incorporate AI and deterministic and probabilistic code into one text that it becomes the operating system of the bank.
And I think that that's like the future of larger enterprise.
And that's why to us, we're very mindful that we do still use some SaaS for sure.
Like we use Slack as an example today, which is a Salesforce company, right?
So that happens.
You should use Slashwork.
It's one of ours.
It's a compatible device.
It's much better.
Yeah, I'm happy to try it.
We incubated it.
So you see what I mean?
So it's just like for a large company, I think that like, obviously not everyone needs to reinvent everything.
I don't think the plumbing firm will reinvent it.
I don't think they're going to wipe code.
That's not the point.
I think they will buy something that looks like Claudebot or company in a box kind of thing.
Totally get you.
It's the idea of becoming a compound startup and the benefits that come from not having to integrate with 50 different providers.
So totally get that.
Do agents not just make that easier though?
Do agents not just make the data migration between different tools from third-party providers way easier?
And actually, we'll be looking at this going, it was a ridiculous idea to ever think that we needed to own every part of every element.
Yeah, you're exactly right.
That's what's going to happen.
But if that's the case, why do you need to vibe code it all yourself and build it all yourself if you're going to have agents that are able to move data between different products much more easily?
It depends on what kind of company you are.
As I said, if you are a plumbing company, maybe Claude will...
offer a solution for all of this anantropic or maybe there will be somebody else who kind of uses clawed and empowers this kind of company in a box experience that i think is still the kind of unknown answer we don't know what's going to happen custom support is one i just cannot get as a category because there have been 14 players funded with over 100 million in the last 15 months and then you have all the existing incumbents and then i speak to ariel at nivan jack at airwallex and they're building their own are you building your own custom you are We were one of the early ones.
This is actually one of the things we were surprised, but I think I announced already in 23 that our AI customer service had done the equivalent of 600 agents jobs.
And it caught a lot of attention at the point of time.
Now, media always tends to simplify these stories a little bit.
The truth was that at that point of time, our customer service was doing very simple questions.
It was like, hey, did I pay Klana?
Yes, you did.
Okay, thank you.
So obviously, that wasn't that hard to do.
But it's still like, I mean, to some degree, a large company like ours, what do we do?
We try to improve our product.
Partially, we try to do that for fewer people to contact us and ask.
hey, it isn't working or I don't understand what I'm supposed to do.
Part of it, you just want your product to be so good that people don't feel they have to do that.
So we've always tried to reduce customer service calls.
The only, to me, shocking experience back then was that we roll this thing out.
We've rolled a lot of product improvements out.
I've never rolled a product improvement out that instantaneously took away 600, the equivalent of 600 agents worth of work.
Now, because we don't hire these people ourselves, they work for customer service companies.
They just shifted and started working on it.
So fortunately, in that situation, nobody lost their job, but it was still like an eye opener for us, like, wow.
And then the point is, what you realize when you're early on that journey is, again, for customer service agents, whether it's AI or humans for that sake, for them to be able to answer questions really well, they need as much context as possible.
Where is that context?
It's in the source code of your software.
How does Klana calculate interest?
Well, we can have a documentation of that.
But the truth is in our source code, is somewhere deep in our source code where that interest calculation is actually explained, right?
And documentation may be inaccurate.
So what you realize when you pursue this is that customer service isn't just like, hey, I need an agent that answers questions.
Sooner or later, you wanted to read the source code and explain to the customer how it works.
You want them to provide as much context as possible to be able to give the right answers.
And that's when you start realizing that it's not something you, in our case at least, we come to the conclusion we cannot buy it off the shelf.
because it actually becomes part of our tech stack.
Will every large technology-first company build their own customer support system?
I'm not sure.
I think there will be...
No, I think, obviously, I believe that for Klarna, the right thing was to be early, to try to find what we can do with this technology and where it can bring us.
And I think it's going to be a competitive advantage over time to incumbents that haven't done that.
But a lot of incumbents will obviously procure fantastic...
AI customer service solutions in order to try to reduce the gap between what we're doing and they're doing.
So, you know, who knows?
We'll see what happens.
But in our case, it was very evident that we needed to do this ourselves.
When you said this, it was a brilliant headline.
I was like, Seb from Planner replaced 700.
And it was a big furore.
And my question to you was, do you think that did more to harm or to help you because for me as a marketer i actually thought it helped you because it put you in a ai first ceo camp that very few public company ceos are in yes but it's a good very valid question and one of the things we also realized is that As a Polish person, I think when things are about to change, I look at them very cynically.
I'm just like, okay, this is what's happening.
I'm not that kind of person that's going to try to gloom things over.
I'm like, okay, this is happening.
It's going to be a big change to the world.
How do I adopt?
What do we do the best out of it?
I'm sure there's going to come a lot of positive things, a lot of negative things.
In this case also, when we announced this.
we obviously had some people being very frustrated with us.
Like, oh, you know, you're laying people off because of AI.
People were angry to some degree as well.
And I respect that.
I understand why, right?
And that's why a few months later, we tried also to go out and say a different story.
You want it back.
Yeah, we don't think so.
I think Bloomberg changed kind of the headline and then that got misinterpreted.
But what we were trying to say a little bit later on is that like, to me, as we explore this further, we were like, well, but to be honest, if...
AI can do customer service.
It means it's going to be the cheap customer service.
It's going to be the one that everyone gets because it's cheap and simple.
But as has always happened historically, like when people started in factories making cheap clothing or cheap furniture, we started appreciating artisan things.
We started appreciating an artisan coffee shop and artisan furniture that was done by artisans.
So we said the future of VIP experience will be the human connection.
the relationship.
And then we genuinely believe.
So we said, we need to transform our customer service from thinking about it as like, okay, yes, it's officially just like good customer service.
But to some degree, when I kind of challenge it internally, I said, look, what I've seen has happened is also too much focus on cost.
There's been too much focus on that.
We have to rethink this and make customer service into this human part of what Klana is and make sure that we offer everyone who wants a human connection.
That's going to be what VIP service looks like in the future.
Like, oh, I'm not dealing only with machines.
I'm dealing with a human.
You know, that's what we think at least.
So that's the message we try to get out.
I completely get you said, but I'm sorry, dude, for being so blunt.
That sounds a bit Silicon Valley idealistic.
Yeah, maybe.
What I mean by that is that most people are not actually as good as we think they would be.
customer support is roles where you're in there for a year or two and you move on.
And what you need is, Seb, I know that you have X number of kids and you often like to travel here.
I thought about these three restaurants for your romantic Valentine's Day trip with your wife.
That's a really thoughtful agent or person.
The trouble is most people are not that and it takes training and development to get there.
The low skilled labor, a la that, a la social media marketing, content creation that's low level is going to be eroded faster than ever before, no?
but you're right and that's exactly why we started changing so one thing that we've done that has worked fantastic for us and we're rolling this out we started saying okay to your point if we looked at like these agents that we were hiring previously even through other companies we didn't really have a relationship with them we don't know who these people were like some of them were great but it was like to your point a mix right and we said how do we create something very different and so what we started since then which has worked amazingly well and we were kind of just starting to romp it up is we actually built like our own uber model which means that we encourage today, we recruit our own customers, the most passionate customers that live in rural areas and so forth.
And we say, hey, do you want to work extra or do you want to work part time in our customer service?
And they actually just like somebody can go and drive an Uber for a while, they can actually jump on and work for Klana's customer service.
And these are our most passionate customers.
They love our products.
They love how it works.
They know Klana in and out.
And now they earn extra money by actually working on our customer service.
And obviously the MPS and the customer satisfaction of those interactions with our customers is through the roof.
So to your point, we need to change.
And that was what we were trying, but it's very hard in the Bloomberg article.
I'm not going to blame the journalist.
I think actually if you read the article, the original article.
It's actually fairly balanced and it kind of tries to describe this, but then the headline is like, they're rolling AI back, you know, and then the whole media circus go on.
So it's like, oh, Klarna has just announced that they're rolling it back.
It's like, no, that's not at all.
The truth is no one reads the article anymore.
They just read the headline.
Klarna CEO, but it's end of finance.
I was just laughing with them because like yesterday on X, somebody wrote like Klarna like.
Klarna like company is going to offer buy now, pay later on rent.
It was Klauna likes.
It was actually another company.
But people didn't see that.
They just say, Klauna is going to offer buy an appellator on rent.
And then suddenly we're all over the press.
People are calling us like, I'm just like, what are we going to do?
Like, it's just not true.
I remember when I was called in an article, former teenager.
Yeah.
I was like, I think this is a broad spectrum of people right now.
Former teenager.
Me and Warren Buffett both have that in common, but I'll take it.
I sat down with the team the other day.
Our job is to find value and invest in amazing companies.
I was like, if they sell per seat, we're not doing it.
We need to replace jobs.
Like labor displacement is what we're investing into.
That's the only way that we can actually return the amount of money that we need to now to make funds worth it.
Do you think that's fair?
Unfortunately, I think that is going to happen.
And I feel like Dario is one of few that actually is willing to...
stick up and say that officially.
I feel a lot of the other executives of these big companies are getting nervous.
They're seeing the negative backlash of talking about this, and then they're trying to portray something different.
But I don't want to be one of them.
I'm more in Dario's camp.
I want to be honest about the fact that I do think there's going to be a very big shift.
Now, in addition to that, then I think more like Elon that it might lead to a golden age of humanity where, you know.
AI does more of jobs and more people can enjoy themselves and do other things that we can have a richer society.
That is not an unthinkable outcome.
It could be a positive outcome.
It could happen.
And I think it's not unlikely that it could happen.
So I still, I'm an optimist at heart, but I also want to be realist around what's going to happen in the shorter term.
And it's going to be a lot of turmoil in this.
When you said the statement about replacing 700 customer service agents at Klarna, what did you not know then that you wish you had known, knowing all that you know now?
Nothing.
You haven't had anything that you've seen that has changed your mind.
You know what, Harry?
In 2015, I sat down with my management team.
At that point of time, we had been trying to compete with Stripe and Adyen for five years.
And we were losing it.
They were just crushing us.
We were like, this is it.
And Adyen had just signed with Daniel X, Spotify, my neighbor.
And I was like, this is over, man.
We're not going to win in this checkout wars, like payments wars.
Forget it.
So we're like, what are we going to do as a company?
What are we going to do?
And then we sat down as a team and we're like, What's the future of banking?
So the future of banking is going to be some kind of digital financial assistant wakes you up in the morning, say, I checked your mortgage.
You're overpaying like hell.
And I have renegotiated for you and I can do all the paperwork.
You just need to say yes to save 50 quid.
Right.
And like, that's the future of retail banking.
And that we said in 2015.
OK, so what does that mean for Klarna?
We're like, hey, let's become your digital financial assistant.
Let's be that assistant that saves you that time and money.
and ever since that it's been like where we're going so all these things now obviously i didn't predict chat gpt i didn't predict all this stuff happening but that to me that we're going to become a digital financial system and we need the kind of technology the ai is to accomplish that was you know crystal clear for me for the last 10 years and i've just been running down that path continuously and to me it's like self-driving cars we all know it's going to happen and first there was a huge hype and every day we're reading the paper like oh my god it's happening tomorrow tomorrow everyone's investing and it's crazy and then the hype dies away But, like, I was always saying, people were asking me, like, what do you think about software?
I was like, look, it's going to happen.
My daughter is not going to get a driver's license.
Do you think you're best positioned to do that?
Like, if you look at, like, the entry point and where you sit in the stack, are Revolut not in a more strategic, better position to be that digital financial assistant than you?
I mean, I love Revolut.
I think Nick is a fantastic guy.
I think he's an amazing company.
Nick's the greatest CEO I've ever interviewed.
I'm also terrified he's going to kill me.
I love Nick.
He's amazing.
I've always felt very competitive with Nick.
And, you know, I think he feels competitive with me.
We have a common friend who we talk to a lot about these things, which is funny.
But the point is that if you look at it, Klana has 110 million customers worldwide.
Revolut now has 65.
I'm twice the size in number of customers, but the engagement that I have is not as high yet as it is with Revolut.
So people may use us less frequently and for other things, right?
So what I'm doing right now, what we're doing at Klana is moving from being kind of your infrequent payments solution to being your high engagement banking.
provider, right?
That transition is going extremely well.
It's going extremely well and it's accelerating.
People are adopting our banking services at a very rapid pace.
Do you look at Robin Hood?
I've had Vlad on the show multiple times.
And I think Vlad is astonishing.
He's got 11 lines of business that produce over 100 million in revenue.
I think it's an incredible model for moving from entry product, be it BNPL or for him, frequency trading, into the full-step banking provider.
Do you look at him and do you take lessons from that?
Yeah, absolutely.
But we all have different entry points.
I mean, Revolut to some degree was like an early like, hey, I'm an expat.
I travel a lot in Europe and like this is better for my currency or I trade in crypto.
That was kind of the early adopter thing.
I think, you know, Robinhood was like, I'm trading.
I love trading.
Klarna is very different.
Like our customers like.
I shop online.
I do shopping.
You know, we skew more female than male.
We have a very different brand.
I would think of us more like a lifestyle brand, like a digital version of American Express.
That's how I think about Klarna.
So I think all of these growing fintechs, you know, I know David from Nubank since early days, right?
Like I have a funny story where like I was down in Brazil meeting David when he was just leaving Sequoia starting.
And, you know, we had a fantastic conversation.
We talked about the future of banking and then he sends me an email.
which was like hey sebastian would you like to like advise me a little bit i'm starting this new company and i was like i'm sorry i don't have the time so i lost out on a lot of a lot i would have been a great angel investor there but that's how life goes yeah you know that's how life goes so anyways i'm going to be honest i'm not crying for you no okay okay yeah i don't think anyone will cry for me over that i will cry over myself that's okay i can i can fall asleep crying over that but the funny thing is that like so you have these fintechs now who are actually starting to become really big.
I mean, Revolut is really big, Klama's really big, Nubank, etc.
But we're all coming from slightly different angles.
We're all coming from slightly different.
And now the people who are going to be threatened by this is the incumbents primarily.
Like, of course, I'm going to partly compete with Revolut.
I'm partly doing that already.
But if you look at like...
They're very big in Romania.
Romania is not a big market for me.
I think there's the second largest market or something, if I look at number of users.
Romania is not a big market for me.
I'm very big in other markets.
So that's going to differ.
But whose market share are we eating?
Barclays.
Wells Fargo, Capital One, those are the companies that we are going after, right?
So I don't really see there's a big conflict between us.
It's more the incumbents that are going to lose customers.
You spoke about Nubank and David.
I love David.
He's amazing.
Fucking legend.
But anyway, obviously they've got a banking license in the US and they're very much aggressively planning the US.
Is the US the main goal for you?
Yes.
Okay, sitting in London, I'm just like, I feel so special in you.
No, but listen, it's like this.
It comes back to what I said.
In 15, we're like, the future of financial services is going to be this digital financial system, okay?
So then the next question is, who is going to participate in that challenge?
And why would Klana stand the chance?
Those are the two questions we need to answer, right?
And we say, well, first and foremost, there's going to be three types of companies participating.
The tech companies, Google, Amazon, Apple.
There's going to be fintech.
revolution.
So we didn't know.
I mean, that revolution hadn't even started, but we knew they were going to come entrance and then banks, right?
That was kind of our view.
Okay.
So like what's going to be critical for us to win in that big transformation?
Global.
We realized first, if we're just big, at that point of time, we weren't even in the UK yet.
But if we're only in the Nordics and Germany, we're not going to have the scale to be able to win this big transformation that's coming.
So we need to be global.
And global means US.
If you're not in the US, if you're not big there, you're just not going to be big enough.
And the risk is you're going to get acquired by somebody in the US.
So to us, nailing US was super high priority.
Super high priority.
Second, we realized that data.
The more I understand about you as a customer, the more likely I am to give you that advice that you said, hey, you know, you should pick up the flowers when you go there or whatever.
So the key thing we saw is different than Revolut and all the others.
We have our own payments network.
Just like Amex, we have our own rails.
Every time you shop with Klana, the information that flows on the rails isn't just the amount that you purchase for, it's the exact products.
We have the full digital receipt.
So we know you shopped at Sephora, but also what cosmetics you bought at Sephora.
And the benefit of that is if I'm then supposed to advise you on your purchases or your day-to-day finances, I just have much more richer information that allows me to provide you good advice.
Oh, these contact lenses were really expensive.
You can get them cheaper, etc.
Right?
So if I want to help people in their everyday spending.
I have more information.
So we said understanding the customer depth is very, very critical and data was going to be very, very important.
And so it was being global and having a good understanding of our customer and having a lot of trust and brand.
The other thing was brand.
build a brand that people relate to, that people feel emotionally connected to and not just like in utility, right?
Create something different.
I'm sorry, I struggle.
You know, I'm a proud European.
I struggle when I look at the European neobanks and I look at Chime and I look at Dave and I look at all the other current.
I mean, they're all a fart compared to the market cap of Revolut right now or whatever the private latest valuation with market cap is a very different thing, as you know, as a public company CEO.
Like, why, if the US is such a focus, has it been such a lackluster performance from their domestic?
participants?
Well, partially because competition is better.
If you take your Amex app in the US and compare it to one here, it is significantly better there, right?
Your JP Morgan app is significantly better.
So the financial institutions in the US are just.
better and the problem is that then people try to find an entry point that is probably for example very big lending and then they you know walk into a lot of subprime and they make huge losses and or or there are other things right so people struggle to find that entry point but we have 30 million users in the us right almost like i think it's 28 or something so but soon it's gonna be 30.
Our card is growing at a very rapid pace in the US.
So your core focus is, can I turn those 30 million users from BNPL into core customer account?
Yes.
And we launched a card in the US, and I have to be careful now because we haven't released the new earnings yet coming next week.
So I have to use the Q3 numbers.
But if I remember correctly, we're like 2-3 million active cardholders in just a few months in the US.
So we are transitioning these buy now pay later customers into full banking relationship customers at a very, very high pace.
Totally get you.
When you look at Nubank and Revolut moving both aggressively into the US, if you were to put money on who's going to do better, who would do better?
That's a good question.
I think I have to go with David.
Wow, why?
Because I think Nick's challenge right now might be that he is so distributed.
I mean, he's trying to go for the whole world, right?
I mean, he's launching in Dubai, he's launching in India, he's launching everywhere.
Banking is...
not your standard tech company.
It's difficult.
And so I just wonder if he's like running out of bandwidth, right?
Like I think it's more risky.
David at least has slightly more focus.
He has a very solid base in Brazil, making a lot of money from there.
He has this Mexican thing and the other thing that are growing pretty good.
But if he then does US, that's just like one more big market.
It's very different.
Nick is so thinly spread right now.
Question for you, which is you mentioned Stripe earlier in the competition there.
You're a public company CEO now.
I'm going to go there and you can do a no comment.
I have so many public company CEOs.
I've never met a happy one.
Never.
Are you happy as a public company CEO?
Happy is a strong word.
No, but I think, look, to us, it's like we have over the years so many shareholders, so many employees.
At some point of time, it's actually easier to be public for us.
We were already reporting on an earnings on a quarterly basis.
We're a bank.
So I'm not sure that the difference is that big.
to be honest, from our perspective.
So it is what it is.
But like, yeah, of course, if I could own the company 100% and be private, I would prefer it, right?
But that's not reality.
Do John and Patrick with Stripe have advantages that you don't have as private companies in their ability to invest in long-term, invest in R&D, not think about next quarter quite so religiously?
Historically, yes.
But this has changed due to AI.
One of the things I remember vividly is that When we came to the board and said that like the same plan that I said from 15, right?
Grow global, get customers across the board in all countries.
And then once you have the love and affection of these customers and the relationship with them for day to day purchases, then go deeper with them, offer them more banking like services and increase the revenue per customer, right?
So we had this interesting board meeting where we're like, okay, now it's really going to happen, guys.
We are now going to truly start focusing on this transition.
from just like single payments customer to banking and we're going to launch peer-to-peer and we're going to launch you know potentially which is also leaked to the press already trading and we're going to do like a lot of like the other banking services that we at that point in time didn't have and we're going to you know increase the card and we can increase balances and deposits and we're going to do international remittances and all these things and then the board looks at this like yeah you know this kind of transitions can be hard it changes what the bank is we have this discussion an additive thought thank you board yeah this can be hard well no yeah exactly but but the funny thing i went out and i was like why was that so easy like i was like how come that went so easy still like it makes it oh yeah now i know why because usually when a ceo come to the board and say we're going to do all of these new services we're going to launch all of this new stuff Hence, I need to increase my investment and my cost by $100 million, if it's the size of our company, to be able to do all of this.
But I, at the same point of time, was showing them a budget.
I mean, Klana has been shrinking.
We used to be 6,000 or over 7,000 people, and we're now less than 3,000.
And I didn't ask for a single dime to do all this.
And the reason for that is because I've seen the acceleration of AI, and I know we can ship all these things.
on the existing organization.
We've gone from 7,000 people.
We're now below 3,000.
We've shrank 50%.
And the majority of that is just through normal attrition.
Initially, when we had 2020, we did a little bit of layoffs, but that was not that big of a number compared to what has happened since then.
So that was the reason.
The reason it was easy for the board to take decisions.
I didn't ask for a single dime in investments.
It's 2030.
How many employees do you have then?
Less, for sure.
2,000?
No, I think it may very well be even less than that.
No.
Yes.
But listen, again, relationship cannot be replaced.
We're going to do a show in 2035 and Sab's going to be the only one.
Yep.
I think that the one thing that's important for us are relationships.
We have a relationship with merchants, as an example, retailers.
And we have those relationships locally.
So I have people in Portland talking to Nike.
I have people in China talking to Sheen.
I have people in Amsterdam talking to Adyen, et cetera, et cetera.
So we have over 50 locations where there's people.
ai is not going to move those jobs like that we need it's very important the relationships with our partners and the same customer service it's going to be i'm still going to argue that it's going to be vital to offer a human connection there so those jobs will remain but for the rest it's going to be definitely smaller so we're shrinking through natural attrition with about 20 per year it's just people leaving they stay about five years and then they move on which is natural And then what we have said very clearly is that we're not going to recruit.
So we're recruiting a little bit.
People then came again on accident.
Oh, it's not true.
Look, they're recruiting.
It's like, come on.
Yes, occasionally we hire somebody here and there.
But if you look at the neck, you go to LinkedIn and look at the insights, you're going to see how the company is shrinking.
The point is that we've shrank 50%, but we also promised our employees, which is very important.
We said, guys, this is going to mean we're going to do much more with much less people.
This is going to make more profit for us.
And you're going to share in that profit.
So our employee compensation has grown almost 50% per head during the same time.
So we have given a lot of that money back, and that creates safety for employees.
They know that through this AI transformation and using these utilities, they are getting some of the benefit of it.
Weird question.
How do you think about the current state of...
SBC, stock-based compensation for anyone, which is obviously how we dividend or give stocks to employees.
You see aggressive from OpenAI, argument being why does Sam give a shit if he doesn't have any stock anyway?
Dilution doesn't matter to him.
Evan Spiegel is the godfather of SBC.
Astonishingly high amounts.
How do you feel about the state of SBC?
Well, I think it's very clear when we compare American companies to European companies, there's a huge difference.
I mean, I think that American companies are 5 to 10x more.
than European companies do.
And Klan, from that perspective, we're a European company.
We have come from very low levels.
We have increased because we need to stay competitive for talent.
And talent today can move between US and EU pretty easily with the help of companies.
But I still think also the thing that's going to happen, there's been these industries, they're called tech and they're called FIN, financial services.
They have all had this amazing thing, which is that you create this service.
and there's a huge switching cost so your customers can't really switch that easily and hence you create this money printing machine and then life is sweet right and then you build these campuses and you play volleyball in your office and you go and get free lunches and you know and you live off the spoils of this money printing machine in your basement and that's not how normal business work if you're in retail if you run a restaurant you freaking wake up every morning and you ask yourself How do I put the right product in front of the right customer, bring them into my store so that I can actually sell them and make them happy and so forth?
You have to wake up every day and do care about that, right?
And so the point is that like.
this is going to be brutal awakening for fin and tech that's what's going to happen to all of us like we're going to have to wake up every morning make sure that we serve our customers we work really hard and effortlessly to make them happy with what we're offering them and it's not going to be what it used to be and so i think that like share based compensation as an example like everything that was was it really because It made sense.
Or to what degree was it just the sports?
And I think to some degree, it's sports, right?
And some degree, it's relevant, like because some people can make a huge difference.
But there's a balance between the two.
There is an incredible number of incredible CEOs attacking the incumbent banks.
What happens to BNP, ING, 2035?
I think, so that again comes back to what we talked in 15.
Our conclusion was there's going to be different.
So what I thought was interesting, Solomon, also recognize this at Goldman Sachs.
So he created Marcus.
And then talking about public companies, the challenge was that when fintech was like everything was high 2021, you know, valuations up, Marcus is the best thing that Goldman ever did.
And then suddenly what ends up happening is, you know, Marcus turn and it's very hard for Solomon to defend Marcus.
But the problem is like Marcus.
would have needed 5, 10 years to fully mature.
And when you're a public company, that's hard to defend.
I don't know, maybe Solomon doesn't agree and he's like, I did the right thing and I changed it.
But like, in my opinion, he should have stick the guns to doing that.
Jamie is now doing neobanking, he's going in, but he's going in a bit later now.
And so you will see different banks.
I think some of them will reinvent themselves.
become neobanks, become tech-led, use AI to reinvent themselves.
Some of them will not, and they will with their way, which is always what's happening in the disruption of an industry.
So it will depend on the leadership of those financial institutions.
You said about 2021 and high valuations, high prices.
I remember the round where you were done at 45.
Yeah.
It was SoftBank, no?
It's not entirely true.
There's also a little bit of media, but yes, there was some shares bought at 45 as well.
Yes, that's right.
Knowing what you know now, Are you happy you did that?
And is there anything you would have done differently?
That's a good question.
I think that when you're in that kind of high growth phase, one thing to keep a close eye on is your multiple expansion going faster than what your revenue is growing.
If your revenue is growing faster than your multiples, then you're probably fine.
But if you start seeing the opposite, where multiples are expanding faster than revenue growth, that may potentially be a problem longer term, right?
I think today maybe that I could have been more careful, specifically on the hiring side, because it was very sad and difficult to me to a few quarters earlier be hiring at a high pace and then a few quarters later have to announce layoffs.
That I felt that I should have predicted and been more cautious about.
You mentioned the board meeting earlier where I was like, oh, that was kind of nice and easy with the expansion.
You've got an amazing board.
And we're not talking about the board in any other capacity.
I'm just talking about a hard board meeting.
Does Mike ever get angry, by the way?
No.
He doesn't.
No, angry is not the word for mine.
I would be shit scared if he was.
No, I mean, it's actually, it's less scary because he doesn't get angry.
He's like disappointed.
Disengaged is the worst.
Like the worst thing you don't want to get with Michael is disengaged.
That's like the big warning sign.
He's never lay on the floor and pretended to sleep.
No, but you know.
I mean, yeah.
I mean, he's so amazing.
I love him so much.
I think he's fantastic.
But you obviously care a lot to make sure that like you want to see that he's engaged.
Can I ask you what's been your biggest lesson from working with him?
Because you're like his chosen child in the nicest way.
Look, I've worked with him so many.
It's a funny story how we ended up working with him because at that point of time.
sequoia it was a guy called chris also which is amazing still a friend of mine who was at sequoia and he did kind of found clana he did drive no yeah exactly yeah and he did uh don investment so you know there's just like this story where like i'm talking to this guy saying hey do you because there was a guy in stockholm that knew sequoia a little bit so i was like talking to him hey do you think that sequoia could be invested in you know interested in investing in clana and and he's like no that would never happen and i was like okay fine so we just talked to the european funds which is like it's not even worth right but i was still looking there in google maps i was looking like sand hill road and i was like dreaming you know could i have the chance to work with these guys and then suddenly my phone is buzzing and i'm like oh i had a message i was like this is chris olsen from sequoia you know and i was like oh my god i was like oh so what i do is like i know like okay this is like dating right i can't call back in three days i have to wait i have to wait three days before i call back so i'm just sitting there like counting the hours like i cannot i don't want to look too interested yeah exactly something and then i call chris and we take a meeting And they get super excited.
And we instantly wanted to work with Sequoia.
We were like, they're the best.
That's how we saw it.
Like we saw this was going to be a huge, you know, brand uplift for a company.
At this point in time, you know, Daniel Ecke, Spotify is getting all the tech credibility.
Like all the engineers in Stockholm wants to work with Spotify.
Klan is some boring invoicing company.
People are like, what the hell is that?
Like, so we're like, we need tech.
We need tech credibility, right?
Sequoia is going to give us that.
So anyways, what happens is a little bit later on, Sequoia decides to make the investment.
Chris flies to Stockholm.
And we had met Michael in a hotel breakfast here in London.
And then Chris comes and he makes this beautiful presentation, right?
And the presentation is like, these are the Apple guys in the garage.
These are the Google guys in the garage.
And these are the Corona guys in the garage.
And you're going to be the next Google, you know?
And we're just sitting there like, oh my God, we're going to be Google.
You know, like, we're just like, we're buying it all.
And then I feel afterwards like, this is not good.
Like, we have to do something cocky here.
We can't just like, you know, just swallow this and be like, okay, please, can we work together?
So when Chris exits the room and is just about to leave, I say, hey, Chris, just one thing.
If we are genuinely the next Google, how come you're the only one from the Sequoia partnership that's here in Stockholm today?
And then Chris looks at me and says, oh, I'm so sorry, the other guys couldn't make it, you know, whatever.
You have to remember, they invested, they took a 25% stake at a $100 million valuation, right?
They took a 25% stake.
Yeah, at $100 million.
That was the deal they eventually did that.
So Chris is like, I'm so sorry, I couldn't make it.
And he goes into the elevator and literally 20 seconds later, this is so impressive, 20 seconds later, my phone starts buzzing and it's Michael Moritz.
And Michael Moritz is like, hey, I'm so sorry, I couldn't make the meeting.
And if we get to do this investment, I'll join the board.
So thanks to me saying that and being a little bit cocky and not being so freaking Swedish.
we actually got Mike on the board.
And then since then, I've worked with Mike and gotten to know him.
The thing people don't understand with Mike is that Mike has this...
I always think that for you to be really good, for you to really understand the topic, you need to be in every freaking detail.
You need to read up a lot.
And he does.
But the point is, it's almost like sometimes I feel like he can just take this huge mass of information and he can, without a second of thought, he's just, that is important.
And he just gets that at a level like other people I interact with.
He's just brilliant at that.
It's just amazing.
He can like he called me in 2019 in summer.
I don't know why he called me, but he was like, and this was when we were we had been in the US for a few years.
We weren't getting any traction.
The business wasn't doing.
And then Nick, another Nick from Afterpay in Australia was starting to get traction in the US with Buy Now Pay Later.
And Michael just calls me out of the blue and just like, Sebastian, I think it's now or never.
If we don't do US now, we're never going to do it.
And I was just like, I don't know how the hell he knew that, but he was like so spot on.
It was exactly the thing.
And I just dropped everything and I was just like, we have to win the US.
And then I just spent, you know, the next two years focusing 100% on that.
Do Sequoia move the needle for a company?
In my opinion, they do.
Yeah.
I mean, I think I've been very impressed with all the people I work with there.
I think they're amazing.
And there's a new generation now with Sonja and Andrew and the new guys coming.
So like, it's really cool.
Pat and Alfred.
Yeah, I think they're amazing.
When you talk about the expansion of products, you've said obviously about kind of afterpay and BNPL.
God, I'm going to get in trouble for this.
I'm pleased to hear about the movement away from just pure BNPL, because is that not just evidence that for all the people that said lending is a shitty business to be in, they were right?
Landing?
What does that mean?
Well, like BNPL is a shitty business.
Why would it be a shitty business?
Oh, it's really hard to build like a $20, $30 billion business on BNPL.
Consumer lending is a hard business to make a lot of money.
Oh, consumer lending.
Okay.
You know, when I get a startup pitching me consumer landing, I'm like, sorry.
You're like, wow, he's honest these days.
Yeah, I think the way I thought about this is like when we started Klamath 20 years back, we were just like, okay, look, why are we not just making these banking products better working online?
Because you got to remember in 05, the bank's internet offering were shit.
Dude, in 2026, that's not shit.
Yeah, exactly.
So it was just like, they're all shit.
So we were just like, okay, we're going to take some of the stuff that the banks do and we're just going to do it better online.
we did that and then that grew and we were successful i mean people don't know this but we were we raised sixty thousand dollars in our first angel investment thirty thousand dollars of that was spent and then we became profitable and we were running this as a profitable company from 05 to 19.
we had almost 10 consecutive years of high growth and profitability that actually got us like this reward because we were like Only one of two companies in Sweden that ever had such a long streak of high growth and profitability at the same point of time.
But what we realized also over time was suddenly I'm sitting one evening and I'm looking at my P&L and I'm like, wow, what is that line?
Oh, shit, that's late fees.
That's a big revenue line.
And I was like, that's not going to be long-term sustainable.
So at some point of time, I started thinking, wow, you know what?
We're actually doing lending.
What does that mean?
What does it mean for consumers?
What does it mean for their financial life?
What's the implications of this?
And at that point of time, i thought myself there's two things i can do here right i can either sell this business and say oh we're making a little bit too much on interest and late fees let's go and do something else or i can try to change this and one of my co-founders left at that point of time right but i said no i'm gonna stay and i'm gonna make the change and i realized that the buy now pay later credit offering is a healthier one than your credit card like you on your credit card you put all your spending full month on that and then the bank tries to push you to revolve you build up a balance of a few thousand pounds or dollars and then you pay very high interest so i was like but i remember when i worked burking it used to be like press one for debit press two for credit when i would swipe my card and so like where did that go well banks didn't like it because the problem was if you were pushing debit now and then your bill at the end of the month was much smaller and you were less likely to revolve and borrow money and they would make less money so they removed the debit button and i was like no no no let's bring that back Let's make sure Clown Offer is press 1 for debit.
20% of our transactions are debit.
And then the rest is credit.
But the credit is interest-free, fixed installments, no revolving.
Revolving we've removed.
It cost us.
We gave up $100 million of revenue when we removed revolving because we used to do it in Nordics.
We took it away.
We even didn't have late fees in the UK for a period of time at all.
But it turned out that that wasn't great either because then people to some degree were overextending themselves.
So it's good to have a little bit of fees, some kind of consequence of not paying on time.
we got that back but you have to be mindful of not making too much money on it so you just have to find the balance but over the years we iterated on a model that we feel like is a better alternative to credit cards if 10 years from now less people have credit cards more people have debit cards and then use buy now pay later occasionally i would argue it's a better society and that's what we've been pushing and the consumers now we see they are they love that they reward us for that they they they agree with that right and that doesn't mean you're still in credit So you're still going to have, unfortunately, occasionally people who overextend themselves.
You have to be mindful about that.
How do you help them when they're distressed and so forth?
It's a difficult business in that sense.
It's a bank, right?
So you have to be mindful about these things.
But generally speaking, the type of product we're offering is a better product than the traditional products of the banks.
You mentioned starting with Spotify and Klarna in Stockholm together.
And obviously Stockholm's been the...
birthplace of great AI companies in the last year with Lagora and Lovable, to name a few.
I'm a young 18-year-old Stockholm entrepreneur.
Seb, you've got this incredible experience, and you've been to the US, and oh, how wonderful.
Do I have to be in the US if I want to build a big startup today?
No.
Do you disagree?
No, but every US experienced founder tells them, yes, you do.
Yeah.
I mean, to some degree, from a European perspective, it's obviously partially sad to see that a lot of the successful AI and companies in the US where actually the founders are European.
All right.
It's a bit sad, but that's just how it is.
I remember Truecaller are friends of mine, also a fantastic company, European.
I was at Atomica when they did that.
Yeah, Nami and Zai.
And they were like told by the VCs, the American VCs, like, you have to move your engineering center to Silicon Valley because otherwise everything's going to go to shit.
And they did.
And it was a disaster.
And they had it for a year.
They tried to recruit, but obviously nobody in Silicon Valley knew what Truecaller was, and they were already a pretty grown company, so they couldn't attract as a startup in that sense.
And they had a hard time recruiting and whatever, and they're just like, why are we doing this?
And then they shut it down.
They lost a year on that.
they lost a year on that lot so much traction and then some of these vcs were like oh you're not doing well so now we're not going to put our partner on your board anymore we put some junior guy on your board because we don't care because you're not our top priority of companies it's the most savage indictment isn't it when you get the associate join the board and you're like oh yeah i've been relegated so first they're advising them to do this thing and then when they actually go and execute it and it turns out to be a disaster then like i'm sorry your company is not that good like i mean it's just terrible right it was terrible and i think that like so do you think the state of vc is very good today I think, again, it's changing so fast.
I think that the challenge right now is a lot of them are piling money into AI that they don't necessarily fully understand.
Like, how good is it?
How differentiating is it?
Does it have a real moat?
Well, what should I know then as one of these VCs piling money into AI?
Well, I think what you should be doing is coding with Cursor and building things yourself.
If you do that, I think you do that, if I remember correctly.
Yeah, exactly, but lovable.
Yeah, well, you're only lovable or have you tried Cursor as well?
I've tried ClawCode.
Okay, good.
Yeah.
So the point is, I just think that if I meet investors today that haven't actually downloaded and tried to build something themselves, I think they don't have the skill set to make an evaluation of the company they're looking at.
I think it's so critical to actually just understand how powerful these tools are today before you make those decisions.
If you have that insight, if you understand that, and then you make your decisions, fine.
There's going to be opportunities.
I think Curse will lose half of its revenue in 2026.
Is that your prediction?
Yeah.
Why is that?
because Cloud Code has just eaten their lunch.
I didn't see any engineering team that's still on Cursor.
We love it, actually.
We use it all the time.
Really?
Yeah.
Is that because you have an enterprise deployment in Contrast?
No, I don't think so.
I don't know why.
I'm a big Entropic fan.
I love Cloud Chat version of it as well.
I use that all the time.
I just find that it depends on the tasks.
I'm almost using them as like, I would go into Cursor.
I would write some things.
Then I go to Cloud Code.
Then I'll ask Cloud Code to do some other things.
I still feel they have almost distinct personalities and skills.
And so I kind of enjoy still.
And I need an IDE.
The problem is also because I wasn't an engineer, I never used VS Code or any of these tools.
I still need an IDE today.
So Cursor is my standard IDE, just as a consequence of that.
So you could be right, but I'm actually more optimistic about their future than that.
You can invest in Anthropic at 360 or OpenAI at 500.
I'm giving the discount to make it easy.
Don't make me answer this question, please.
I think they're going in very different directions.
I think that if you, at least my experience with OpenAI is that it's becoming a consumer company.
And if I'm building AI for like a billion people, I'm building AI that I would focus on making sure that like, for example, there's going to be people that are going to seek AI as a friend, as a friend in their day-to-day life, as somebody more like from that movie.
What's the movie again?
Let's call it your handsome one.
Her.
Yeah.
Her.
Exactly right.
So some people are going to more look for the her experience.
And I think that's ChatGPT to me because if I'm so big, I'm such a big consumer brand, I'm going to start looking at my KPIs and I'm going to optimize for emotional connection.
for people wanting to like you know how much time are they spending with my product is that really going to be a chat gbt there is that going to be a companion product and there's maybe 15 provided which is so specialized i don't know it could be but my point is it's like if i'm just looking at who their audience is today it's very likely that they will optimize for that relationship aspect of like being your counselor your provider your your play friend that you're playing with or playing games with or whatever right claude to me is very different claude is like my intelligent advisor.
And I'm trying to push, and I say to Antropic all the time, like, I don't want an AI that tell me, you're so great, man.
I understand that that's a nice experience and some people may enjoy that.
I actually enjoy somebody just telling me how awesome I am every day.
Personally, I'm not that interested in that part.
What I'm interested in is rather somebody's telling me, Sebastian, that's freaking stupid.
Don't do that.
That makes zero sense.
I want an AI to tell me you're wrong, man.
Don't do that.
That makes no sense.
I feel currently, it's more likely that Claude provides me like.
less biased.
It's trying less to please me.
And I think if you're building a product open AI, the risk is you becoming into the pleasing because I think a lot of people like that.
And I would, I mean, I understand if I would use AI for entertainment, then also I want to be like, I want to be entertained.
I want to feel pleased.
I want to feel happy.
I want to feel, you know, it's a different product.
See what I mean?
It's just a different thing you're looking for.
And I have less interest in that.
I have more interest in somebody telling me you're totally off.
Don't do that.
So I would rather be anthropic.
Yes.
For that perspective.
Yes.
Yeah.
$150 or $149 billion.
I didn't look at the valuation.
I didn't listen to the number you said.
$149 billion was your revenue expectations by 2030.
Oh, really?
Yeah, which was phenomenal.
Yeah.
You invest now a lot as well through Flat, no?
What have you changed your mind on since also being an investor?
No, I have changed my mind on software, right?
So I think that software is getting much more risky and it's much more unclear what the future of SaaS is.
we for example make it made a flat made a big investment in defensor which is like a military arms you know type of thing not arms but military defense yeah and that's very much like not you know there's some drones in there and there's stuff like that but it's not it's very different it's not sas right i think data center is the one that's most under invested categories today when you look at inference needing to run for 24 hours a day for most of the knowledge worker population and it running for like one percent of knowledge worker population today i'm like why the fuck is more money not going into daily centers do you agree with that and do you think i i i have a very it's funny you asked me about this i've actually played i play around sometimes when i have time i play around with suno have you played around with suno dude i love soon i actually i actually sent nick at revolute yeah a song to get him to come on the show most recently and it helped get him on yeah i love suno so what i've done with soon is like i was i was playing around And I've been doing some songs.
I even published it on Spotify for the fun of it.
So you can go to Claude.
I have like 74 monthly listeners.
And my kids get so annoyed when I publish songs in my name.
It's really funny.
But two of those songs are called Compression.
And this came from a conversation I had with Claude.
So I blame all the lyrics on Claude.
Don't blame them on me.
I was only the producer.
Claude wrote the lyrics.
Then I had to give Claude some artistic freedom.
I'm very interested in this.
I got this question.
I was on a conference in Yellowstone.
And I was on the stage crazy enough with Sam Altman and Eric Schmidt.
And from the audience comes to this question, how is it possible that you can take the whole of ChatGPT5 as an example, one of these models, once they've been trained, once the training is over and the whole thing is like done, and fit it on a USB stick?
How is that possible?
That it's not bigger in size.
It's just like a few hundred gigabytes or whatever the size of the models are.
And then they gave different answers.
And I had an answer in my head, but I felt embarrassed in that setting to say, and I think what people underestimate with AI, it's a compression technology.
So what that means is if you historically put data in a database, you say a database record, okay, Klana has a customer called Sephora.
And then we write again, Klana has a customer in Sephora.
You created this tremendous amount of duplication.
If you look at any large enterprise company, they will have the same information over and over and over again.
But if you look at Wikipedia, how many articles is there about Klarna?
One.
Why aren't there 15?
What do they do so magically?
How can it be that Klarna historically had a customer relationship with Sephora and we had information about that customer relationship in Slack, in Salesforce, in Google Docs, in Google Slack?
Kind of the same information over and over again, but on Wikipedia is just one article.
How do they do that?
And I realized when you train the model, if I tell that like, Harry, is not only running a fantastic podcast, but also runs a VC.
But if you tell it once, when you train it, it will forget it.
It will ignore that information.
But if you tell it enough number of times, it will remember it.
And then when you go and ask it, it will know that information.
But it's not storing it twice.
Because if it's getting the same information that it already knows, it doesn't move the tokens.
So it's automatically compressing all the information.
This is why you can take the whole freaking internet, all human knowledge, and compress it down to a few hundred gigabytes.
That's a huge amount of information.
Now, obviously, you lose precision.
This is why it's very worthless to go and ask, what is the opening hour of the Starbucks down on the corner?
And the AI would be like, I have no clue.
The equivalent of ChatGPT5, I asked this AI, so AI is responsible if I'm wrong.
But the ChatGPT5, as an example, the equivalent of the number of gigabytes that that model is, is the equivalent of about two, three days of weather data from the whole globe.
That's it.
So how can it then be so...
capable of answering all these questions because unfortunately despite what we humans would like to say the amount of true novel information and knowledge in human society is quite limited what we see is repetitions and variations on the same themes over and over and over again so the point being to answer your question when we realize this, we also realize that we're compressing knowledge at an...
That's why people are playing around doing this, like, oh, look at my iMac mini.
I was running my own model on it.
It actually works.
Like, I can run this on a Raspberry.
You know, like, the thing is, like, Romeo and Juliet, that story exists in a hundred different variations.
And the unfortunate thing is, when you compress it down with math, it knows AI sees that not as Romeo and Juliet and then another love story, another love story.
It sees a love story and then knows it has slightly different names.
in different variations so it's a massive compression and now comes the question do we need all of that compute in the future and i am you know i happen to have this amazing conversation with michael j burry about this the other week wow because i was talking about this because he's doing those bets that it's not right and i said look i think there's two arguments for and against one is if you look at enterprise enterprise what does enterprise want enterprise wants highest quality at lowest cost Why would I recompute my information about Sephora over and over again?
If somebody could help me to compress that down to just one single source of truth and not having all that information unnecessary, I'll take it.
I'll save a lot of money.
I don't need that all to compute.
Why do I want to do that?
So in enterprise, you're going to see this dramatic squeeze and compression.
The counter argument to this is You and I then go out and say, hey, we've had this amazing podcast.
Now, let's watch a movie together.
We want to watch Star Wars, but with our faces.
So you'll be Darth Vader and I'll be Luke.
Now, that needs generation.
That needs a data center to generate that for us.
So the question is just like, what power will be greater, the compression of enterprise data or the regeneration of new stuff for entertainment and other things?
And I don't know the answer to that question.
I think you can argue both ways.
But in enterprise data, there's going to be a massive compression that's going to come naturally through this technology.
And that's why I'm a little bit like, and I don't want to be the guy who said there's only going to be four computers in the world.
Like, I don't want to be that guy.
So I want to be a little bit mindful here.
Clips stay forever, Seb.
Don't do this yourself.
He said there was only going to be.
In 2040, they're going to play this clip.
I was like, can you believe it?
He was so stupid.
No, but like.
But I'm just saying that I don't know which power is going to be greater, right?
If you run with that enterprise compression, what does that mean for data centers and for chip companies like NVIDIA?
Well, that would mean that you would need significantly less.
That's the consequence.
The problem is, why do we have so much big software?
Why do we have so much data?
It's all a mess because we had...
humans who were trying to do their best, but the right-hand didn't know what the left-hand were doing, and they were overriding that, and the code over there didn't there.
And then people start doing transformations and stuff, and it all becomes a big mess.
And actually, Wikipedia is the most successful knowledge graph in the world, I would argue.
But if you look at the standards that they apply, how do they do that?
I'll give you a very simple, I love this principle.
So if you go to Wikipedia and you try to create a new article about a new topic.
It's very hard.
If you go to Google Docs, you just click New.
Boom.
You start writing a new document.
If you go to Cursor, you start New, New Codebase.
Wikipedia, where is the New button?
There is none.
Do you know how to find a new button?
No.
You have to search for an article.
And if you search for something that doesn't exist, then you're allowed to create new.
Wow.
See what I mean?
Yeah.
And that's so different.
And companies doesn't work like that.
In companies, it's like, hey, I have an idea.
I think Lana should be doing this.
And like, okay, let's just start coding.
But let's go and check.
Maybe we already have code doing this.
Maybe we already do that.
So the point is that the reason that compression hasn't happened historically is just because so many people have been involved with different experience, knowledge and so forth, and it just creates this massive mess.
And nobody has been as disciplined as Wikipedians has been to keep it to one source of truth and so forth.
They've really been amazing at that.
You can read up a lot about how they've been doing, but AI is going to help with that.
AI is going to help organizations say, hey, should we really be doing this thing?
Because we already have code for this and so forth.
It's not there yet, but that's going to happen.
Not because AI gets smarter, because it's economically sound.
In a business, it's not economically sound to duplicate.
It's economically sound to reuse what you already have.
That's the reason it's going to happen.
It's not because it makes sense economically to not...
do what you've already done again.
Were there any other takeaways from your conversation with Michael Barry?
He's a phenomenal thinker.
Yeah, yeah.
No, we enjoyed it.
I think in this regard, I think we were aligned, right?
But it was funny because we were talking about this, how much novelty is there really, right?
And it's an interesting concept because as I said to him also, there's other data that suggests otherwise.
I've heard data that suggests that 30% of the searches on Google every day are new.
Like, I don't know if that's true.
It sounds crazy to me.
But there are some data to suggest.
So maybe there is more novelty.
And I think that's like, I don't know the answer to these questions, but I think this is like very, very fascinating to me to like see the counter effects of these.
Before we go into a quick front, speaking of not knowing the answer to the questions, I'm sure you're in CEO groups, go to CEO events, sit in green rooms, and there are topics or themes that CEOs discuss about AI that they do not discuss publicly.
What do you think they most are?
First of all, I don't go to that many of those, to be honest, because I'm hard coding and working with my teams and trying to make sure that Clon is as successful as possible through this transformation.
I spend very little time on those kind of things.
Does this generation make every CEO, even public company CEOs, a builder again?
I think it has to be.
Yeah.
Doesn't it?
Well, again, I was with Mike last night from Atlassian.
He's like, I'm up at 5 a.m.
coding.
I'm like, was that the same before?
He's like, no.
Well, I think so, but it's also amazing, right?
I mean, I think for somebody like myself who didn't use the code or couldn't code, I think it's fantastic to be able to take my ideas and thoughts and turn them into something I can show others.
It doesn't mean to have to be production ready, but I can articulate things at a very different level of quality than just trying to explain something on a whiteboard or whatever.
Now I can actually bring things to people.
I had this very, very unique experience with Claude just last week where we were trying to talk about to communicate a very specific thing that was touching on accounting and finances and predictions and stuff.
It was pretty like very, very complex thing and we were just talking about it.
This was like the first time I went to Claude and I said, hey, can we like interact a few times?
I want to like see if we can like explain this concept.
And after a few iterations, I got this like beautiful animation.
It wasn't even a slide because it was an HTML file.
I thought to myself, wow, you know what?
This is actually the first time I felt that AI could do something that humans couldn't.
And it was the first time I had that experience.
And the reason was, Because if I would have liked to do the same animation and beautiful pedagogical explanation of a very complex technical accounting finance thing, historically, I would have brought in an animator, a designer, an accountant, a finance Google Sheet guy, etc.
And each one of them may have been extremely skilled at what they do, but didn't necessarily know what the other person needed.
in order to perfect that outcome and so the animator would have been like yeah i can animate like this and that but they don't really understand what they're animating right the financial concept the financial guy may be like i can do the numbers like this and that but i don't really understand why we would need this like animation because i read the numbers and i get everything i don't need this freaking visualization right so the point but here claude claude had all the skills in one and then created this and i was like i could not a human would not have done that like it and it was just like such a experience to me there's a special moment when ai exceeds human capabilities and i think in this in this experience to me it did like it did something that i i don't think a single it's not like a single person could have done each part of different parts but what was like how many people are going to find in the world that are great animators great visualization people, super pedagogical, knows everything about financial accounting, understand financial services.
Like, you know, who are you going to find?
It's going to be hard to find the person that's good at all of these things in one, right?
Final one for a quick fight.
What happens to Elon with Grog?
I would never dare to bet against Elon.
Would you ever do it?
No, but the trouble is I would never dare to bet against is when you have two people you would never dare to bet against in the same market.
And most people would never dare to bet against Sam.
And so if you'd never dare to bet against Sam, but you'd also never dare to bet against Elon, one of your prior assumptions has to be wrong.
Yeah, I think he's going to do really well.
I mean, I think it's if you think about the fact that he could in a few weeks, in a few weeks, put together a frontier model at that quality level, you got to give the credit to the guy.
Like, I mean, that's just like it's it's insane.
Do you use it?
I actually you know what I love about it is.
And this is funny because this is exactly what Elon has been saying all the time and nobody wants to give him credit for this.
But the point is, Onyx, people spread all these rumors.
Like we were saying, like yesterday, there was a rumor that like Klana-like company offers buy now, pay later for rent.
Yeah, you're doing rent.
Yeah, we're doing rent.
You're doing rent.
And we're like, no, we're not doing rent.
And nobody cares, right?
Too late.
Yeah, it's too late.
And people are just like, it was Klana like.
And now they're disappointed, you don't do rent.
Exactly.
And then the next tweet is Klana does rent.
And then we're trying to like, our comms team's jumping on and trying to like, but like, if it was established media, they would fix that.
But like these X posts and TikTok posts, like nobody, it just goes, one answer, right?
But then people write, at Grok, is this true?
And Grok.
actually almost always answers correctly.
And I think that, to me, is very, very impressive.
I think it speaks to Elon's vision of X, that over time it can become the trusted source of information.
And what he's done with Grokipedia, where he's taken inspiration from Wikipedia, what I said, and so forth.
So I think that there's something there, and that's going to be critical for our societies, because right now we have this scam ink, the scams flowing over, like AI is creating virtual versions of everything.
so i think that that's to me where the holy you know where there's something really really exciting i agree do you know i just wish you could hide the ac rock because i'm too embarrassed to ask like what is an ide yeah exactly you can have a personal direct message you just explain yeah just like quietly i don't want anyone to see this dude i want to do a quick fire with you so what have you changed your mind on most in the last 12 months i've changed my mind most about the pace at which the transformation is happening I was probably in the camp of, I thought it was going to happen faster than it did.
But I think I'm always, my problem is that I overestimate.
It takes time for people to change habits and ways of working and stuff like that.
So I actually think it's going to take a little bit longer.
The adoption, it's not necessarily the capabilities of the technology, but how fast people will adopt it and how it will change.
Do you think that differs for enterprise versus consumer?
I'm actually the opposite.
I'm surprised by how quickly consumers adopted it when you look at the wow numbers for chat.
Yeah, but consumers are always going to be faster, right?
Way faster.
Yeah, way faster.
I think we underestimate how fast consumers adopt and overestimate how fast enterprises adopt.
Yeah.
I think in kind of work life, it's definitely going to be slower.
What criticism about you stings because it's partly true?
No, I think the criticism that stings is the one that isn't true.
Which is?
Well, I think people sometimes said that like, oh, he's just trying to make an exit.
He just tries to make a big fast buck or that like I just want to.
And after 20 years, I feel like, hello, you know, haven't I proven now?
I'm in it for the long term.
I think the other one is that like he just he doesn't care about the consumer.
He just wants to make money on interest rates, et cetera, et cetera.
You know, reckless lending and all that stuff.
None of that is true.
I deeply care about our customers.
I deeply care about them being financially well off.
And I think I'm providing a product that is better than the alternative.
So like that's the one that stinks because it's just, it's not true.
I've never, I don't understand how you'd ever level that criticism against you, like battling public company CEO ship every day.
I mean, it's like the opposite of like quick buck.
Anyway, what would you do first if you were not a public company and had no scrutiny on you?
Like if I said, here's an invisibility cloak, you can do anything, spend any money on anything internally.
What would you do?
No, I think the only thing I would do different is spend less time on communicating and talking to investors, right?
That's it.
I mean, to be honest.
But when I look at the strategy and what I'm trying to do with the company, I honestly feel like...
As I said, that 2015 vision, let's be that digital financial service assistant.
That's the one I'm executing on.
We're executing on it.
The company's executing on it.
I feel we're having tremendous momentum on it.
We see the affection of our customers picking up our banking products is amazing.
Do you think you've told a good story around that?
No, I think communication is hard.
Because I respectfully, I didn't know this.
I feel terrible.
But you and I talked about it even before this podcast started.
I think my problem is, right, is that like...
And this is definitely what Michael gives me as feedback.
I need to stick more on message.
I failed probably at this podcast again.
And I tried to talk about all the kind of things.
I'm just like, I love my work.
I love what we're doing.
I think so many things are so interesting and complex.
And then I sometimes want to tell people everything.
I want to explain everything to them.
I should be better at sticking to a clear message.
No, totally bad advice.
No, you think so?
People buy you, not what you sell.
yeah okay we don't release 30 of shows because ceos come on and they just sell let me tell you why our banking products about it it sucks yeah people buy you not what you sell i hope so i hope that over over the years that will pay off but i also see like what's funny is like when we were the most highest valued fintech in europe blah blah blah then like i could do no wrong whatever i said was like that's brilliant like he's so smart and then when we like you know when we came down to 6.5 and we had to do layoffs it was like Everything he does is a disaster.
Was that a brutal time for you?
Of course.
Of course it was.
How do you deal with that?
To me, it's also like one story.
I had this crazy thing, which is I've been doing this for many years now.
So I'm a little bit more like, you know, thick skin.
But what happened is I'm on this interview with MSNBC.
And I've been with an interview with them many times.
And generally speaking, like, you know, questions have been, I would say, balanced and fair.
But suddenly on this interview, they bring this new guy.
on board and this was exactly when this was happening and i'm sitting in my home because i was doing this interview for my house and the guy comes in and he's like this is a disaster the company is going to i basically didn't say that word but like basically all you know this is the end of clana is all going down and it's like and he's just like putting this massive pressure on me and i'm just sitting there and i'm almost starting to crack up and laugh because it was just like so insane it's like come on the business is doing really well like obviously we need to do some changes but like it's going to be fine And I'm trying to kind of deal with it as professional as I can.
I was like, no, I don't think like, as you try to do in those situations.
But the point is, I go out of that and I was like, oh my God, that was intense.
So I get in my car, I drive to the office and I was like, there's only one song that I can listen to now.
And obviously I put on Queen under pressure.
I put it on max volume and I'm just sitting there under pressure.
And I crack up.
And the thing is, I said to myself, look.
One of the biggest idols of mine, obviously, Zlatan Ibrahimovic, born in Sweden the same day I am, 3rd of October, 81.
And I think of him and I say, I wanted to play Champions League.
How the hell does it feel to go into the finals and play Champions League?
He actually never won the finals, unfortunately, for him.
But the point is like, every soccer player dreams about being in the Champions League finals, right?
Or a football player.
The pressure.
Can you imagine the pressure when you're going into that stadium?
Everyone's screaming the height of your career.
This is the chance you got at winning this thing.
That's what I signed up for.
I signed up for being on that interview with MSNC.
This is what I signed up for.
It is stressful.
It was hard as hell.
But this is what I wanted.
I wanted to play in this level of league.
So I also have to cherish and be happy about the fact, look at it and be with gratitude that I get the...
fantastic opportunity in life to experience these things.
It's amazing.
I'm going through this amazing experience.
And that's the only way to look at it.
So as much as it's half and I can cry and I cried and I can be sad and, you know, I've had really tough times where I feel like super depressed about stuff.
But at the same point of time, I'm always looking at it, putting on the pressure and being like, but this is what I signed up for.
Yeah, I love that too.
Yeah.
Did you ever interview him?
Do you know what?
You should bring him here.
No, we should do.
And as a brilliant, video where he's like, when I step on the pitch, I think I am God.
Yeah.
I don't think I'm God, though.
But yeah.
Did you always think you would succeed there?
No, but it's exactly the same.
There's funny, there's this email that I found that I wrote only six months into the company.
And it's to my co-founders.
And it basically goes like this.
This is like six months into the company.
We just started.
We're getting our first customers.
And basically, the email goes like this.
I'm sitting here.
It's late evening.
It's written like 11.30 p.m.
I'm sitting here myself and I started thinking, you know what?
What if we're actually successful with this thing?
What if we start growing maybe from Sweden to Finland and Norway and then we go to Germany?
What if we actually grow this globally?
What if we actually go and then we go after the banks and we start building financial services?
And so I basically, in that email, I write everything that's happened in the last 20 years.
So the point is that obviously, Did I know that was going to happen?
No.
But just like Zlatan, when he was kicking a ball down in Malmö on the street, did he dream about being in the finals?
Of course he did.
And of course I did as well.
I dreamt about being where I am now and even more so where I want to take the company in the next.
decades right you dreamt about being here with me of course but like i think visions are all vcs are saying hey what's your vision right for a pre-seed company dude if i told you that when you were starting your business you know 20 years ago you would not have been like we're going to be a fully fledged banking provider we're going to have bnpl as the insertion point we're going to own the us as well You would not have been like that.
You unlock the next chapter with every achievement in my mind.
And so I think visions are the most actually constraining thing that we force founders to try and articulate.
Am I wrong?
Well, I think you're wrong with me.
I mean, and again, I'm not telling you that I know how we were going to do it.
I had no clue.
But I was dead dedicated to doing it.
And I did see, or when I was, I don't know why, when I was a kid, I was an immigrant kid, my parents...
quarreled a lot.
They divorced when I was eight.
My dad started drinking.
Quite a chaotic upbringing.
And in that, my childish interpretation of what was happening in the family was that they were always fighting about money.
If I fix money, then everything will end happily ever after.
That was my childish interpretation.
And so I got, for whatever reason, also very interested in Richard Branson.
And I read his book.
And I now met him, which was a fantastic experience for me.
But like, i read him and i was just like wow you know this guy built virgin did the records this and that and then the other guy that really inspired me was ingvar kampra the founder of ikea you know who built this he was at for a period of time was seen as the most wealthiest man in the world right and so like i just for whatever reason i was always like so enthusiastic about building businesses i remember we we had this like school night in in middle grade where like the cafeteria was always the place that did the most money and then there was like tons of other businesses but they all failed nobody was really making a lot of money but the point was to raise money to go to like on a class trip or whatever and i started a pizzeria you know i started selling pizzas and we out competed the cafeteria and we took all the money and my class could go on a high school trip because we made all the money that the cafeteria was making i've always wanted to like drive a business i've always I've always had this.
And then eventually I said to myself, the coolest business to build must be a bank.
Like that must be the ultimate business because banks like banks always wins.
Banks always prevail.
Like banks, you know, you see these things, you see like the JP Morgan's of the world and all this and they like they go through this.
Yeah, of course, like sometimes they get financial crisis and whatever.
But like in the longer term, the bankers always wins.
You know, so that was always an inspiration to me.
Can I ask a hard question?
Invest in 13 unicorns.
Well done, me.
VCs congratulating themselves.
And the single most common feature is a broken relationship with their father.
Did that drive you in a way that you wouldn't have had otherwise, if you don't mind me asking?
No, I think for sure.
I think it's a combination of that and being an immigrant kid.
I think that seeing all these other Swedish kids going to their summer holiday houses and having a surplus that to me looked great.
And then us eating pancakes seven days in a row because it was the cheapest food that mom could put together because we were out of money.
Even though I love pancakes, I thought they were really delicious.
I think it created this like I felt my parents were smart.
My dad deserved something.
Better is the wrong word, but like he started driving a cab, you know, and he was very smart, very intellectual.
That was not the right job for him.
You know, he was saddened.
When he saw drunk people and he was driving them and seeing what people were saying.
And I think he was just not his place to be in life.
And just it broke him down.
And I felt that like if I was going to fix things, if I was going to get money and I was going to fix this.
Now the problem was once I got money, it turns out that life isn't like that.
Because I gave a lot of money to my father and he used it to drink more.
And he drank himself to death.
So like.
It turned out that money was not going to solve those problems.
There are some problems that money won't solve, right?
And again, I don't want to have that discussion about like, you know, does money make you happier and all, blah, blah, blah.
Because obviously when you've been as fortunate as I have in life and I can take my kids on an amazing vacation, I can do things and I don't have to think every day about, you know, can I afford this?
I mean, can I do this?
That's a tremendous luxury and privilege in life to be in that position.
But at the same point of time, I've also experienced that like it doesn't solve all problems.
And it's sad because that was partially my aspiration with doing this, right?
Final one.
I'd like to finish on a theme of positivity.
What are you most excited for in the next 10 years?
My mother's got MS.
I'm very excited for developments with diseases and treatments for diseases like MS.
What are you most excited for?
I think with AI, obviously, the thing is that if you five, 10 years ago could say that like, well, I kind of think I know what's going to happen.
in the future, like it's going to kind of continue like this or whatever.
And then suddenly came COVID and the war in Russia.
It's like the world just changed.
And suddenly came AI and you suddenly sit there like, I have no idea how the world is going to be in two years.
Like, I don't know.
But for myself, what I'm most excited about is like, A, I'm still an optimist at heart.
I do believe that these technologies will make life better for humans.
I think it will actually lead to something positive.
I'm in that camp.
You know, you can have an intellectual debate with me if you want to, but like, I think that's true.
And then what I'm most excited about for me is I want to realize the vision of Klarna, like against what you said about not having visions, like I want to put that vision into reality.
I want to bring finally a banking product that truly helps people save time, save money, be in control of their finances.
That excites me.
It excites the hell out of me.
And I think that like all these incumbents have been having all these excess profits.
They've made so much money.
Because people don't switch.
And honestly, because they didn't care enough about their customers.
They didn't wake up like that restaurant or retailer every day and said, what can I do to make my customer better off?
They didn't do that.
I'm honestly excited about that.
That journey is exciting to me.
And I know that if I make more money, I'm not going to be happier because I have a bigger pile of money.
It's not the point.
But the journey of trying to accomplish, to make Klana into that global retail bank and the...
adventure it encompasses, that excites me.
Going through all these different challenges and opportunities and trying to make the best that I can of delivering on that, that thing really excites me.
And now AI is enabling me to do things that I couldn't do with this company before.
I can realize those visions faster and at a higher quality than was ever possible before.
And that's super exciting.
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