Europe’s most successful tech entrepreneur has called for an EU referendum on tougher Russian sanctions that would end the bloc’s reliance on Kremlin-controlled energy.
Sebastian Siemiatkowski, the billionaire founder of Klarna, said Europe’s politicians are “underestimating” the level of public support there would be for a full ban on Russian gas which would starve Putin’s war machine of funds.
“I would like to see the EU, in record time, use electronic identification to do a fast referendum on EU citizens’ support for cutting out Russian gas and Russian petroleum in all forms,” he said.
“I think there is a European majority who are willing to accept the costs. I think politicians are underestimating the support for sanctions like that.”
Mr Siemiatkowski, the poster child of the ‘buy now, pay later’ sector after setting up Klarna at the age of 23, said he is concerned that attention on the Ukraine war is beginning to wane. His grandparents fought to liberate Poland from Russian and German influence during the Warsaw Uprising in 1944, and his parents moved to Sweden from communist Poland a year before he was born and found it hard to integrate.
“People sometimes underestimate what a tremendous decision it is to give up your friends, your family, your home city, country and leave. Nobody takes such a decision lightly. If people do these things, it’s really because they are desperate,” he said.
Volodymyr Zelensky has accused the EU of strengthening Putin’s hand by refusing to back a full ban on Russian oil, with the continent spending over €56.5bn on energy payments to the Kremlin since it invaded Ukraine.
Last month Ursula von der Leyen, the European Commission’s president, announced plans to ban all oil imports by the end of the year but talks faltered over opposition by landlocked member states.
In an address to the bloc’s leaders at the time, Mr Zelensky said it was “high time that all the quarrels inside Europe, all internal arguments, that are only encouraging Russia to pressure us more inside Europe, must stop”.
EU leaders have since backed a ban on more than two-thirds of Russian oil imports. The next step would be to jointly impose sanctions on Russian gas exports, although the chances of that seem remote in the near future with Germany already ruling out an immediate ban.
Britain has announced that it will end all dependency on Russian coal and oil by the end of the year, and gas imports “as soon as possible” afterwards.
‘The media wants to portray Apple vs Klarna — in my opinion it’s Klarna plus Apple’
The two words plastered across billionaire Sebastian Siemiatkowski’s sweatshirt — no comment — feel apt given that the Klarna co-founder has consistently found himself in the spotlight this month. There are now lots of uncomfortable questions to go through.
Apple has just entered the buy now, pay later space (BNPL), which allows online shoppers to pay in installments, in which the 40-year-old made his name and fortune. Calls for this type of credit to be regulated are getting louder in the UK as figures show shoppers are using short-term loans to pile up debt. Shares of companies in the sector are falling and packages of buy now, pay later loans sold to investors have dropped in price amid fears about rising pressures in the industry.
Meanwhile, Klarna has just finished mass layoffs and is battling widespread criticism as a result.
Yet Siemiatkowski, the poster child of the booming BNPL industry — and who must be the only financier to have ever been described by a woman’s magazine as a “Disney version of a tech entrepreneur prince” — never outwardly loses his cool.
As expected, the Swedish businessman is keen to show he is all smiles about Apple’s entry into a market his company dominates. Although shares in the sector fell on the news, he stays on message.
“This to me is a conviction of where the industry is heading,” Siemiatkowski insists, hours after he responded to Apple’s move by writing on Twitter that “plagiarism is the highest form of flattery”.
“The media wants to portray this as Apple vs Klarna — in my opinion it’s Klarna plus Apple, plus a couple of other companies going after this massive retail banking industry.”
But having the biggest technology company in the world as a competitor is far from ideal. The timing could hardly be worse, with Klarna recently culling its workforce amid concerns that the cost of living crisis, rising interest rates and tighter regulation will rattle the industry.
Klarna’s pending fundraising round is expected to value it as much as one-third less than the $46bn (£37bn) achieved in its capital raise a year ago, according to Bloomberg.
While Siemiatkowski is putting on a brave face about his new Silicon Valley tech giant rival, he acknowledges the iPhone maker could be at an unfair advantage. Last month Apple was accused of breaking competition law by limiting rivals’ ability to create contactless payment apps.
“I do think there are major issues with someone controlling a massive size of the market and then utilising that to promote their own product without offering other providers to do the same,” Siemiatkowski says.
Does that mean he thinks Apple should be blocked from the BNPL arena? “No, but I think Apple needs to consider becoming more of an open player. If you have as strong a market dominance as they do, they need to be more open to competition on their platforms. If they are more open they should have the same right to compete as everyone else”.
Apple’s long-awaited move into BNPL follows a stressful few weeks for Siemiatkowski. Former staff have turned against Klarna, which has fought hard to promote itself as a cuddly alternative to traditional banks since being founded in 2005. It recently sacked more than 700 of its 7,000-person global workforce earlier this month, before making the “tone-deaf” decision to publish the list of names of everyone who had been fired.
Siemiatkowski, whose most indulgent purchase has been to splash out on a self-playing Steinway piano, admits he would do things differently in hindsight. “We should have given people a little bit more time to digest this,” he says. “It was too big of a shift which happened too fast. It would have been better to let people know first that there were going to be changes, then wait a week or two before we made it complete.”
He doesn’t, however, regret publishing the list of people who had lost their jobs on his LinkedIn page. The list was created by an employee who wanted to help the workers find new roles. “I thought this was a very heartwarming initiative,” Siemiatkowski says. “That I have a hard time having remorse about.”
The job cuts came on the same day that JP Morgan chief Jamie Dimon warned of a global economic “hurricane” as the war in Ukraine combines with surging inflation and rising interest rates. The Wall Street banker predicted that oil prices are in danger of rising to $175 per barrel in the years ahead, with a potential recession on the way in the US.
Siemiatkowski won’t weigh in with his own prediction — in his view economical forecasts are as “accurate as horoscopes” — but says the dramatic difference in investor perspective in the last six months has been evident. The world is more cautious. He still hopes Klarna will join the stock market when things feel more stable. “Maybe a year from now,” he says.
In the meantime, he will have to continue defending the controversial payments method that has made him a billionaire. Calls are again growing for the sector to be regulated urgently after figures from Citizens Advice last week showed more than two in five customers were “piling borrowing on top of borrowing” and turning to other forms of credit to make repayments.
It is a criticism that Siemiatkowski has got used to defending. “The outstanding balance on a credit card can be £4,000 — the outstanding balance on a Klarna purchase is usually £50 or £100, these are very different,” he argues. “On a credit card you can go and take out money. That’s one thing I’ve been very cautious of, as that tends to also lead to people using credit to pay off credit.”
He could also end up navigating huge political changes in Klarna’s home market over the coming months. Elections are taking place in Sweden in September and tensions are rumbling over the country’s intention to join Nato, a move which would end more than 200 years of military neutrality.
It is a subject Siemiatkowski says is extremely sensitive and which he seems torn on. He says there is something “interesting” in Sweden’s neutrality, without commiting to a view. “I’m no political strategist,” he offers.
Russia’s war in Ukraine, meanwhile, is an emotional subject for him. His grandparents fought to liberate Poland from Russian and German influence during the Warsaw Uprising in 1944, and his parents moved to Sweden from communist Poland a year before he was born and found it hard to integrate.
“People sometimes underestimate what a tremendous decision it is to give up your friends, your family, your home city, country and leave. Nobody takes such a decision lightly. If people do these things, it’s really because they are desperate.” He believes more should be done to help Ukraine, calling for an EU referendum on tougher Russian sanctions.
“If there is one thing I can say clearly on this topic — I would like to see the EU, in record time, use electronic identification to do a fast referendum on EU citizens’ support for cutting out Russian gas and Russian petroleum in all forms,” he adds.
“I think there is a European majority who are willing to accept the costs. I think politicians are underestimating the support for sanctions like that. That’s what I’d love to see from the EU.”
