How Klarna's Walmart deal ahead of its IPO put long-simmering tensions between Klarna CEO Sebastian Siemiatkowski and Affirm CEO Max Levchin on public display
Even by Sebastian Siemiatkowski's standards, it's been a wild month. — The chief executive officer of buy now …
Context & Ripple Effects
Klarna enters this episode after reporting a return to profitability and revenue growth in 2024, a result that strengthened its public-market narrative ahead of a planned listing. The company had also been framed as seeking an IPO valuation well above the low point implied by its earlier fundraising, making commercial proof points especially consequential.
The Walmart arrangement follows OnePay’s announcement that Klarna would replace Affirm in its US buy-now-pay-later offering. It turns a long-running product rivalry between the two companies’ leaders into a visible contest over a major retail distribution channel.
First-order effects
- Klarna gains a prominent US distribution relationship and a stronger concrete customer-acquisition story as it prepares for an IPO, alongside its 2024 return to net profit.
- Affirm loses the Walmart/OnePay BNPL placement described in prior coverage, while the public dispute makes the competitive handoff more personally and reputationally charged for both CEOs.
Second-order effects
- Affirm faces pressure to demonstrate that its merchant network and consumer proposition can offset the lost Walmart channel; Klarna, meanwhile, must convert the partnership into durable usage rather than an IPO-era headline.
- Large retailers and wallet operators gain leverage over BNPL providers when they can change partners, encouraging providers to compete harder for embedded distribution and commercial terms.
Third-order effects
- If retailer-led switching becomes more common, BNPL competition may increasingly be decided by who controls checkout and wallet distribution—not solely by standalone brand recognition or underwriting technology.
- The episode points to a more consolidated contest for high-volume retail integrations, where a few major platforms can materially shape fintech providers’ growth trajectories and public-market narratives.
The trend: Buy-now-pay-later firms are competing for control of embedded retail distribution as they seek scale, profitability, and IPO-ready growth stories.