LIVE @ NYSE for Klarna IPO | Peter Tuchman, Sebastian Siemiatkowski, Lynn Martin, David Sandstrom, Mati Staniszewski, Andrew Reed, Markus Villig

29:31And all of a sudden, you're like, my cloud bill is really expensive. Yeah, yeah, yeah. Well, the truth is, if you look at it, I sometimes joke that at the end, there was only going to be a bill from Amazon and one from Claude. Sure. That's the only thing the whole company would be two bills. And they might be the same company. Yeah, exactly. It's like running on the same servers. But I think, I mean, you looked Oracle today. It was insane. Yeah. But I think that the, no, I think, look, I think we've maybe in the last two years slightly over-indexed on AI and efficiency. We were so like, oh, wow, look, we can get rid of all the SaaS.

30:01We can get rid of Salesforce. Yeah, I remember you built your own CX tool just directly with OpenAI, right? Yep, yep, yep. So we've took out 1 ,200 SaaS software out of it. But to be honest, like Salesforce,$2 million in license fees. it's nice but on a P &L of three billion dollars yeah it's not like doesn't make much of it right yeah so it was much more about how do you consolidate all the data how do you standardize it so you don't spread it out in all these systems you get this mess because the less of a mess the easier it is both for a human and for AI to use it to something productive right and so that's been kind of the key thing but I would say we over indexed lightly on productivity sure and now we are in this thing more on growth yep and And unfortunately for human labor, which I find unfortunate, we don't feel we need more people.

30:48We are already gone from 7 ,400 to 3 ,000. I think one of the most shocking things people saw, the investors were like, how come you're growing your revenue so much and your OPEC is just coming down? It's like the opposite of what you're supposed to be talking about. But in our case, we haven't laid off people. We have just relied on attrition. So 20 % of the workforce leaves every year naturally because they go on for other adventures. And we just rely on that. and then we become fewer and fewer and we get more and more done, which is amazing. So the only thing we could ever consider where I would say it would make sense potentially to spend more money is marketing.

31:21But right now, we're very happy to do within the budgets we have. Yeah, we talked to Alex. Yeah, he was saying the exact same thing. Very similar thing. Yeah. What about, I'm interested to hear, so I understand the over-indexing on productivity and maybe pulling back, but it feels like two years ago, every company was kind of seeing AI as a hammer. And when all you got is a hammer, everything looks like a nail. And so every single business process, every single thing is like, can we throw AI? Can we throw AI? And a lot of consultants made a lot of money selling slide decks doing that. I feel like we are now in the scalpel era.

31:56And there are incredible use cases for LLMs, maybe within software that you're already paying for, and you're not even implementing it, maybe to, you know, glue two systems together are there any standout examples of like ai as a scalpel that you're seeing these days that you that you think like yeah it's a little bit narrower than just like do everything um but it's something that you're that you're excited about the early glimpse of what's possible there i think more recently i've gotten all the senior managers at clana to start using cursor sure regularly and i still think that there's like there i i am still unfortunately quite negative on sas because the point is that all these tools internal tools that were built today we can go to cursor and like write me stuff fix me things it's almost becoming your internal terminal for interacting with your data for interacting with you know stuff like that especially since you're not putting it in production you're not externalizing it yep you You don't need to be as nervous about the same aspects that you do when you put things in production.

32:59So I am as hyped as ever on AI from that perspective. Well, and your position of getting all the benefits of AI, but not being threatened in the same way that other, you know, you guys make software, but you're a payments company, right? Yeah, I think that's partially true. Somebody can't go in a cursor and be like, build me Klarna, don't make mistakes, right? Or get a bunch of data on whether or not we should underwrite this person's risk profile. How have you been seeing, there's historically, anytime people are borrowing money, they get a bunch of loan documentation. And it ultimately is like, it's a lot of legal mumbo jumbo.

33:39It's confusing. People that have more resources might go to a lawyer and say, can you help me understand this? Now people can drop those into ChatGPT. that ends up being good for simple financial products like Klarna where people can easily understand I'm getting this product today and then I'm going to pay it in these parts do you think that lending broadly is in for a reckoning as as everyday consumers get start to get access to again chat GPT is not advertising itself as a legal tool but you can get a lot of insight from from from it comes back to what I said about you know that vision we had 10 years ago about where we're still on exactly which we're still on which is just like digital financial system so what what i believe is that if you look at a lot of industries they are making excess profits because of the switching costs so we customers are just not that keen of switching especially when it comes to banking but also electricity carriers all these things they're not like it's not like i really love my carrier phone carrier that much it's just that i don't bother to switch right and that allows them to charge more allows them to pay you know to have lower quality services at higher cost so when you imagine a world where you have a digital financial system is like let me do that for you and you start trusting them like let me go and fix your carrier bill let me go and fix your electricity let me renegotiate that thing for you that it must lead to a better functioning economy with less success profits especially in this it It doesn't matter for Prada.

35:10Oh, sorry, I shouldn't say this is Prada. For whatever it might be. The man of taste. Yeah, thank you. For Prada, LVMH, it doesn't matter. Irrelevant. For the brands, for Nike, irrelevant. For utilities. And so what is banking then? I would say it's a mix. It's a little bit of a mix. It has both some aspects of trust and customer preference and so forth. But there is also a utilistic aspect to it. So I believe that all of the excess profits we've seen in banking are going to come down and i've been very clear with our investors that if you're investing in clana you're investing in the fact that we will be one of the forces that drive that change and hopefully as a consequence of that get a bigger piece of what will be a smaller part yeah what's next for you are you going to stay running the company for the future i hope so i mean i've only been doing this for two decades come on guys that's like just getting started at this point are you you seem you seem uh incredibly calm and it does feel like it's just another day for you it is crazy partially another day for me but i think it's a special day yeah it's good to be in that mode look as i said like i i tell you emotionally going to bentonville arkansas yeah standing at the grave of sam walton yeah and being at the cusp of working with what to me was like the company that i was most excited about when i was a kid i was reading about it like the entrepreneurial greatest retailers of all time it is fantastic that to me was i i'm sorry like i love this but emotionally that was that was very special just reading that air yeah you know it's it's also very like scandinavian type of uh culture in the midwest there's a lot of similarities you know so so i think this is cool but that was special was there anyone 20 years ago that believed that you'd take it all the way here back in apart from myself yeah yeah yeah apart from myself exactly apart from myself look i guess because because by the time sequoia is investing then everyone's like okay they'll be at the they'll be at night season enough right it's gonna it seems inevitable it's funny i i found this old email i wrote like five six months into it where i wrote to my co-founders and the email goes something like i'm sitting here alone in the middle of the night and i started thinking like what if we would like expand this beyond Sweden into more markets and start going off to the banks and become global you know and it's like wouldn't that be awesome like it's kind of and I found this by coincidence a few months ago when I was just going through some old stuff and I was like wow it's kind of crazy I'm sitting there yeah exactly that's like you know I actually predict but but I think it's a little bit like you know if you ask a soccer player or a football player or something like do you want to play Champions League do you want to play the NFL do you want to play the finals you know yeah like Of course you do.

37:49Of course, as a founder, I was dreaming of being here. In the league. Yeah, of course. Of course. Does that mean that I knew? No, of course I didn't know. But I hoped and I knew I was going to do everything that I could and all the energy and all the hours spent and all the sacrifices. Feels like the biggest misunderstanding of this company broadly is just your intentionality around building this, right? of actually trying to build fair, transparent products that are going after those excess profits like you described. Thank you. I'm happy to hear that. Actually, we had one slide on the road show that shows a study from 2015 by McKinsey, actually.

38:34I love McKinsey. Sometimes I hate McKinsey. Let's give it up for McKinsey. Yay! They don't get an applause. And they did a study here in 2015 where they basically, and they were trying to sell it to credit card companies, like, guys, there's an untapped market. And this is not people without money. They actually have quite good money. But these are people they called self-aware avoiders. They were people that saw their parents getting stuck in credit card debt, 07. They tried a credit card themselves because they were supposed to get a good scoring. And then suddenly they find themselves with$4 ,000 worth of debt, paying 25 % interest on it or whatever.

39:09And they're like, what is this? This is the product of the devil. Get me rid of this. And they pay down the debt. And they're like, I don't want to use that. And that group, they don't want the Airpart launches. They don't want the loyalty points or the cashback. That's not them. Those are the prosperous and content, the Amex users, the Chessai Fire card. That's a different group. This group wants fixed installments, 0 % interest, budgeting tools, clarity, honesty, no overdraft fees, no negative surprises. just give me like a robust solid product that I can use for my purchases debit and then occasionally when I need it credit but with zero fees right but it turned out in that study 20 % of the American population falls into that self-aware avoider group 20 % of the households all the people creating credit card programs to sit here in Manhattan they do program for themselves they want the loyalty points they want you know the cashback programs they're doing them for themselves you have to ask your customer what does my customer want and it's not everyone wants that right like and it's fine the other people want it and that's okay but for this group it's something different right um and that's what we're trying to do okay last question you're wearing the last blockbuster hat what's your favorite movie that's a good move like I have to tell you recently my son who loves Star Wars yeah so you gotta watch Mandalorian and I was like okay but how good can it be it was awesome that's great it was awesome so um so So that is probably.

40:33Did you bring the family today? No, I did not. It's just another business trip. I did a road trip. I'm going to go to Wall Street. I'll be back in a few days. We did a road trip with the kids from Boise, Idaho to San Francisco. We stopped in Bend, Oregon to go and visit the last Blockbuster. I really recommend everyone go and go. So this is from the store, not from the movie about the store. This is from the store. This is from the store. You should go there. 50 % of the revenue is still DVD rentals. So and it's fantastic experience. Here we have a new hat. Oh, I'm not going to have this one now.

41:07So that's good. Yeah, put it on. Thank you so much. Last question. Last question. Last last final final question. Is your profile picture AI or is it real? Oh, yeah. Are you that? Photoshop. It's Photoshop. Handmade. Handmade. Well, your stock chart looks like that. Yeah, your stock chart looks like that. Hey. Anyway, thank you so much for coming. Thank you so much. Thank you guys to the whole team. You're the man. We'll see you later. Have a good one. What a legend. Just another day. I just got to go take my company. It's a business trip. I'll be right back. Just raising. I'm not even selling shares.

41:45Yeah, I'm not selling shares. I mean, yeah, I do think people have this massive. Come on the show. Welcome. How are you doing? I'm pretty good. Hi, I'm David. Just pretty good. It's pretty good. I'm good. That should be fantastic. I am absolutely fantastic. Let's get you fired up. How are you doing? We got lots of sound effects here. I miss yourself for the stream. I am David Sandstrom. I'm the CMO at Klarna. How did you get introduced to Klarna? How did you meet Sebastian? I used to run one of the biggest ad agencies in the Nordics in Europe. And we actually started to do the Klarna transformation from this blue, boring B2B company into this consumer franchise.

42:27Yeah. I started out agency side and after a couple of months, Sebastian was like, why don't you do that here? What was your bread and butter when you were in the ad world prior to Klarna? Were you doing big brand marketing projects? Because there's so many different niches. You could be video, you could be billboards, there's a whole bunch of different things you could do. Now, I did all of the above. You did everything. But strategy is probably my thing. I'm super interested in consumer behavior. Like, why do people pick a Coke over a Pepsi? Why do people walk into a McDonald's versus a Burger King?

42:59The science. The science behind something that cannot be science, right? The thing that really intrigues me, like the psychology part of the labubu thing now. How does that happen? How do people fall in love with ugly plastic dolls? We were asking the same question on the show two weeks ago. And that's the thing, right? And those things intrigue me. And I do think marketing done well and done correctly is in that vicinity of being, you know, psychology you make money from. Whose idea was pink? That was actually my idea. I knew it. I knew it. I knew it. Well, the thing about ideas, guys, you know, marketers, is like you can sometimes you just have a great idea and it's incredibly simple.

43:48and that one idea ends up paying just massive, massive dividends, which I feel like Klarna is just consistently so recognizable and really owns the color. Yeah, we do. But I think looking back at what we've done, everything, the strategy, everything has been fairly easy and simple, right? There's nothing complex about it. Pink is just a result of us understanding that banks and the financial industry is one of the most distrusted and hated industries in the world. They're very blue. Everyone is blue. Everyone is blue. Just put the logos up, everyone is blue. Someone sprinkled some black on top, but everyone is blue.

44:26And we knew that only politicians and social media were more disliked than financial institutions. So it's at the absolute bottom of trust. So I just said, what's not blue? What's the opposite of blue? And here we have it. Fantastic. Where was the Klarna brand before you came in? Who was it catering to? What was the key oversight that it was more… It was just fully B2B? Fully B2B. Is that the narrative? No, it wasn't, but it wasn't a brand. It was a fantastic product. Guess the color? Blue. Blue, of course. Blue logo. Of course. Very, you know, as a lot of tech companies start out, very like square, very bro-ish, very male biased, fairly boring, bureaucratic, nothing you want to engage with, no emotional component to it nothing you transact right it's a transaction and that is what we tried to change like in everything and what we did with snoop and paris and asap rocky yeah pink and how we show up talk about the talk about the cultural differences between the european market and and then coming to america because i feel like they i mean from my perspective and and from the financial perspective the big big difference is that u.s is a credit heavy market everyone understands we love to spend money.

45:47But the Americans love the credit cards. Love credit cards, but also understand credit. Yes. Like if you ask a random European, like what is APR? Like, no idea. Nothing. Really interesting. And Europe is a debit market, right? And understanding those dynamics, how that works, the power of credit cards in the US and the stronghold they have versus Europe, that is a debit market different, different. what we see now also the digitalization like i haven't seen cash or a car like a physical card in i don't know five ten years i just haven't seen it yeah that's the only thing i always forget when coming to the u.s my physical card so i show up at the hotel they're like you need a card yeah you're like what's going on yeah so that that's the biggest difference but then i mean i love the u.s i love the spirit in the u.s i like the american consumer is undefeated everything is bigger, nothing is impossible.

46:41Like, there's just this I think greatness to think. That is the soundtrack of the US. So I absolutely love it. And also, like, one big difference from my perspective is in the US, people appreciate marketing and they appreciate people making money, right? So in Europe, when we do a partnership with a celebrity, they're like, you're a sellout. Really? I was about to ask. You're a sellout. Exactly. You're a sellout. Why do you do this? You only want to make money. In the US, when someone does something, they're like, you're the best. Make as much money as you can. This is awesome. There's a huge difference in that as well.

47:21Yeah, no, I feel like Shaquille O 'Neal in particular has built a whole brand around like being just everywhere in every ad possible. And some of the folks that you've worked with have done the same thing. I've seen Snoop all over the place. I love that. It is like, if you pay me, I'm down. Yeah, and it becomes like another piece of their content strategy almost. And you're like, oh, have you seen the latest, you know, Paris Hilton promotion? Because it's like part of her brand world. Yeah, and you can't even guess the next partnership. What about in terms of actual, like, the distribution of marketing materials?

47:53Is there any difference? In America, you know, there's this power law in TV advertising around the Super Bowl. There's obviously a ton of stuff going on on social media, podcasts, live streams. We have a bunch of advertisers. Where is there a difference between where the actual ad impressions are coming from? Is there any difference or is it pretty much the same? I think the interesting thing with the U.S. is that you still have these tentpole moments. Yeah. Like the Super Bowl, you have that thing. Everyone gathers and you have these like, not millions of viewers, but tens and hundreds of millions of viewers.

48:26In Europe, everything is so distributed. Digital is very strong. So it's hard to build a brand when you don't have these 10 pole moments. Because a brand is very much about like, you and I have seen the same thing. And we think it's cool. When every ad is personalized, I don't know. Like, have you seen the clown ad? I saw it. But that was only on my TikTok algorithm. It can almost be a bad signal if everyone saw the same ad, because you know why it's going viral. That was the power of TV once upon a time. You knew that everyone had seen that or missed it or whatever it is. Kardashians, like I saw the last episode, like I'm in, you know, I'm part of the culture.

49:01Exactly. Part of the culture. And you don't have that in Europe. Yep. How involved did you get on the roadshow side? Karnas is interesting, in an interesting place where the consumer brand, I feel like, is almost different than the brand within tech, for example. right yeah because like in our world a lot of our audiences are higher high earners founders investors executives at technology companies they maybe aren't using clarna nearly as much as the average american let's say how what's the what's kind of like the disconnect between those those i mean kind of the two brands sometimes that's that's a difficult bridge to gap a lot of our investors don't use the product on a daily basis right if you look at a spotify for example from Stockholm as well, like the investors might use that on a daily basis.

49:46I think that was a thing with Figma, right? Figma, a fantastic company. Investors don't know how to design, right? They haven't used that. Yeah, but even the only thing different there is an investor knows that every one of their portfolio companies uses Figma every day, right? Exactly. But that has been the story to tell, right? Because like Klarna does a lot of amazing things, but you could boil it down to it's just a better alternative to credit cards, right? And everyone understands credit cards, how that works with points. And that's the story to tell, right? And I usually talk about, like, I do think this is a seismic shift where we've gone from gold to cash, from cash to credit cards, and now from credit cards to the next generation of things, where Klarna is the lead.

50:26Some of our competitors as well, of course. But I do think that's the story to tell, right? And we're seeing that shift amongst consumers as well. Like they're sick and tired of being screwed over by their credit card companies, high fees, predatory APRs, all of that. So I think we're seeing that seismic shift. And that has been a very important piece for us to tell that story from a consumer perspective. Working a lot with testimonials, our own customers. But you're completely right. What about going more multi-product? You guys have ambitions. You have multiple products already. Sebastian was telling us about the card product and the credible wait list.

51:03But how are you thinking about going multi-product in the U.S. market specifically? I mean, the strategy is basically growing with our consumer engagement, right? So we have 111 million consumers. I think we have north of 30 million consumers. Boom. North of 30 million consumers in the U.S. They love Klarna. So they keep telling us, hey, I use Klarna online all the time. Why can't I use Klarna in store? Sure. Okay, that's the idea of the credit card. Hey, I love Klarna, but I want to pay with debit from time to time. Well, okay, that's the start of the balance. And that is how we grow, right? I want to buy a house, but I want to make 30 years of monthly payments.

51:45I mean, Amazon started out as a bookstore and now it's the everything store. And we started out with payments and now we're the everything company. We're excited to keep following the journey. Thank you so much for coming on the stream. Thanks so much for having me. Congratulations. Congratulations. Really quickly, before our next guest, let's tell you about some of our sponsors. This stream, of course, is made possible by Ramp.com, Figma, which Jordi just mentioned, Vanta, Linear, and 8sleep. We will tell you more about our sponsors after our next guest. We just wanted to shout out to some of them.

52:16If you're just tuning in for the first time, I just wanted to share. We have a game-signed burrito by Sebastian. We have a game-signed chipotle burrito. It's actually, it's not just any burrito. It's a Chipotle burrito. And Klarna does have a partnership. And this will be going in the Business Hall of Fame that we're putting together. Let's bring in our next guest. Oh, it has been too long. Great to see you. I'm bringing you some sweets. I feel like when you came on the show it was Monday. I told you don't be a stranger. And then I don't hear from you for a day. Klarna owns Pink. And here you are.

52:51Klarna owns Pink. No other brands. Yeah, we're excited to be here and see you guys again. This is nice too. Thank you. Yeah, pink, pink. We're taking the whole trading floor. Yeah. How did you become a board member? How did you meet Sebastian? So I joined the board recently. I joined earlier this year. Of course, Klarna is investing heavily into AI and figuring out how to combine the best experience with a lot of the AI innovation. And that's how Sebastian and I met. and now over a year back started speaking about AI, how we can innovate to build the financial assistant of the future. Was the actual intro through Sequoia folks or something?

53:26It was initially we met on the event of Sequoia's event. Sure. I was on one of the panels. Sebastian asked the question. Was AI Ascent? It was the Europe 100. Okay, previous. Which is another, of course, amazing thing about the connection where Klarna is one of the few European companies that started in Europe and built a global brand that everybody recognizes. Even today, earlier, walking through the trading floor, the best feeling was a lot of the people coming by, it's like, I'm a Klarna user. It's like 110 million active customers, which is, of course, as another founder that started a company in Europe and is trying to build global business, Sebastian and I got along well and started speaking about this.

54:06Yeah. How did you explain your business to him at the time? Was it in the context of a partnership or just kind of life lessons learned and your understanding of AI could potentially get him up to speed on what was coming. It's a good combination of both. I think there's one piece, which Sebastian is just such a trailblazer and quick to a lot of adoption. He was one of the first to jump into the AI, start figuring out how you can deploy agents in customer service. A few hundred people work could be elevated through the AI work and eventually optimized on the bottom line as well. and we started speaking about a lot of other ideas of what could could happen what is possible working in voice of course there's an interesting angle of how you can combine the part of voice experience across the customer service where people can call in whether it's a claim whether it's to understand a little bit more sure that's where we what about on the B2B side Clarins unique because they have a brand with consumers but then they also sell to customers and or to enterprises and businesses have you thought or have you seen any glimmers of We've heard some sort of, maybe it's a little bit too early to have AI in charge of the outbound sales.

55:16They're not robots buying steak dinners for folks just yet. But there's a lot of companies where they need a phone number, where if somebody wants to get more information, they currently put in a form, and then maybe there's a phone line where some sales reps can pick up internal sales. But that could be AI in the mix, voice agents in the mix. Have you seen that in other companies? Are you optimistic about that? I'm optimistic for like a scenario where you have, like Klarna, a lot of inbound, a lot of partners that want to work with you. Now, a lot of the requests, you need to figure out a smarter way to handle those requests.

55:48So instead of waiting for a longer time to speak with a human, could you validate the workflow with a voice agent and go through that quicker? We've actually seen and deployed that for ourselves where if you want to accelerate the pipeline, you can speak with the voice agent and tell a little bit more about the use case. And actually what happened is that a lot of people are more keen to tell you a lot more than they would otherwise. But then there's so many other areas where that's relevant. A good example is training people internally. So whether you are on the talent team, and I think that's how a lot of people in Plarn are thinking about on the talent team, whether it's you're actually on the sales team, how can I get better?

56:25And then whether it's the agent on the tech side, whether it's voice agent, you can actually learn and do that better. And then there's, of course, the last angle, which is the easiest one, but only easy if everybody adopts it, is how you can use AI in the internal process, in internal tooling. We actually just spoke with one of the execs across the C-suite at Klarna, who is now deploying herself some of the AI tooling to improve the switch from to-do into the actual project management flow with the right metadata, with who is the specific tasks for. So it autofills a lot of the information that otherwise would be manual and take a long time.

57:00So that's kind of those all three domains, whether it's delivering better customer experience with AI, whether it's improving how you actually get customers through the flow and how you train the staff internally or optimize process internally. I think all are so relevant with that work. Yeah, it feels like it's part of this narrative that we're seeing where for a lot of companies, AI was just kind of like, okay, get a big deck from a consulting firm and it's going to do everything. It's going to replace everyone. But now we're in kind of more of the AI as a scalpel era and plugging in a frontier voice model into something that might be generated.

57:34I don't even know what technology was used to generate voices before transformer-based models, but it was rough. And you hear it all the time. You were like a stitch-up of effectively phonemes to make your voice work. Yeah. But I think it's the other thing that is clearly seen across the companies is that the best mixes, you have AI to automate easier manual tasks. but then you supplement with the highest experts you can in the field. And that's what Klarna did, even outside of voice. As you think about text, just people that can handle the really tricky cases. Specialists are there. Klarna is actively hiring on that side.

58:10But then the easy 80 % of the task, whether it's just getting information, getting more product delivery through that first steps in the flow, are happening all the way out. Is there some sort of parallel to draw between the fact that I feel like both Klarna and Eleven Labs are not the like do everything all at once. It's like do one thing really, really well, grow, own that, and then maybe expand. Is that, am I jumping to conclusions there? Does that feel like something that you and Sebastian can like kind of bond over? And we spoke, of course, briefly about before the show as well, where I think it's very important to go deep and understand the customer, understand domain, and work backwards from there.

58:58I think Karna did it incredibly well, being so early in the e-commerce, then digital payments now with so many of the AI innovations. And I think understanding the customer, working backwards, and then expanding is the right move. At Eleven Labs, we are, of course, trying to do the same with going deep in media space now with a lot of the telco space and then working on how you can build a platform out of that. So I think there is a parallel and I think the kind of the common theme, like you need to really deliver the best experience for a specific segment. What's coming down the pipeline in Europe?

59:30Are there exciting companies that I'm sure you guys when a company starts showing promise I'm sure you and Sebastian get hit up pretty quickly. What should we expect? The godfathers. You've probably seen the Sweden is booming Of course, Klarna now, Spotify in the past, so many other amazing families with Lovable, Legora and others. So there's definitely an ecosystem there. Sebastian has also a little bit of Polish roots as well, where I'm from. Poland is also very excited for Sebastian, for Klarna. So I think this is another ecosystem to watch out for and see how that stretches. And these are like two good hubs.

1:00:05Of course, London is also trying to get there. We've seen a little bit in France. So I think these four regions are really going to go for it. Lots more to do, I think, to bring it to the level, to the US innovation, but the energy is there. That's very clear. The founders are realizing that... That's a real path. A real path, and you should... Even if you start from Europe, you can build a global company. And I think that realization wasn't there five, 10 years back. Totally. And now it's like, you should start thinking about a global space from the start, and it's possible examples like Sebastian are great examples being added for 20 years and is just now kind of going once again as we think about in the re reinventing Klarna for the next 20 years and expanding all of the work so I think that's a good inspiration for all the founders there too.

1:00:55Yeah it is it is a different story I mean I feel like new bank has not expanded into the US in any meaningful way and they build a fantastic business to coin your company Fintechs are amazing in Europe and Poland it's but there's something special Yeah, you and Klarna, starting not in America, but actually being able to get a strong foothold. Where you haven't seen that from like, there's the Indian company Flipkart. And like fantastically successful business, but not coming to the United States in a meaningful way. 100%. I think you need to from the start think globally. And especially now, like if you are starting a company.

1:01:26I mean, tactically, advice for like, you know, small founder with some product market fit in Europe. What does that look like? Would you recommend, okay, San Francisco office at 50 employees or 200 employees or quarterly trips or make sure you have someone on your cap table in Sandhill? How can you concretize without making too many generalizations? I think the first piece would be even without the physical presence, you should be reaching out to people writing their newsletters, a lot of the AI people that are active on social media. And don't try to push them on the work. Show them the samples.

1:02:02Show them the product. let them test it. If they like it, that's your correct. Just be a live player in the community online. And you need to go direct. You need to show them the work. You don't want to go the fluff way of the promise of the future. So I think this is like the very concrete thing that worked really well for us and I think for a lot of other companies we see currently. And second, to your other point, you do want people on the ground in US sooner rather than later. The ecosystem is thriving there. You want at least a few people that can be in Silicon Valley or they can be in New York and spend time with other companies and make sure that they are building with that technology or you understand their needs before that work.

1:02:43Yeah, you don't want your competitor going through YC Demo Day and signing up half the batch before... Exactly. You need to be with the YC companies before any other player. Yeah. 100%. What's the fundraising environment in Europe like? I think you can get capital now. I think in Europe and US, if you are building for that scale, you can really do it. Their capital is plenty. It's more about the usual. Get the smart capital, get a smart investors that will help you scale to US, that will help you get the talent. That are in there with you for the highs, but are also there when you are low. That would be like on the practical side, one of the key things to check across any of the investors.

1:03:25but I think 100 % there is a lot of capital, a lot of money that everybody can get. And I think surely you're seeing a lot of European companies are going with pretty great funding rounds as well, especially in the recent months. Yeah, yeah. I mean, we had Delian Asperov, the Founders Fund on the show, and he and Ian invested in, was it Endurosat, the satellite bus company? Yeah, like Helsing. And it's just like a crazy, crazy company out in Eastern Europe that's just built like a phenomenal business in hard tech, which is like total narrative violation. And yeah, there's definitely stuff all over the place.

1:04:02Exactly. And then you might have seen N8N, which is another of the Agendic workflow builders, which everybody uses across the engineers to go to market teams, which is another great example. And of course, Lovable, we spoke about it. So, I mean, we have to ask, you came on the show on Monday, you announced some fundraising. It sounded like you weren't in a position where you needed a ton of primary capital. Are we going to see you out here soon? That's the hope. We are building to create a generational company. That tender offers exactly for that, to get people liquidity so they can focus on that long term.

1:04:37So that's the hope. We'd love to, of course, be here and follow Clarence Path one day. Well, hopefully we'll be there. And thank you. We love to ask that so we can get a sheepish denial and then play the clip when it happens in a couple years. Yeah, a year or two from now. Thank you so much for coming. Thank you so much. Great to see you guys again. Cheers.

1:04:58Legend. Another nice guest coming in the studio. Let me tell you about some more advertisements. Careful with that burrito. That is a piece of business history. TBBN is made possible by Wander. Find your happy place. Also, AdQuick. We mentioned billboards earlier. I didn't get an ad read in, but there's a lot of billboards over here. Billboards all over New York City. Go to adquick.com. Also, bezel. You'll notice a lot of people show up to the New York Stock Exchange wearing a fantastic luxury watch. You can shop over 25 ,000 luxury watches at getbezel.com. Also, numeralhq.com. Sales tax on autopilot.

1:05:36polymarket.com. If you want to track what's happening in tech, you can see it at the bottom of our ticker. you need to go to polymarket.com. Also, adio.com. You can go to adio.com slash tbpn, customer relationship magic. Adio is the AI native CRM that builds scales and grows your company to the next level. And lastly, before we bring in our next guest, we have fin.ai, the number one AI agent for customer service, number one in performance benchmarks, Mark's number one in competitive bake-offs, number one ranking on G2. We heard Mati talking about how Klarna has been using AI in their customer service organization.

1:06:18If you want to bring AI to bear in your customer service organization, go to thin.ai. And we will bring in our next guest. Who we got? I believe we have the next person. We have two minutes. Fantastic. Two minutes. We get to hang out. We get to hang out. Let's play some soundboard. Let's amp it up. Easy, easy, John. Easy. First time on the soundboard ever. Yeah. If you put this thing within striking distance with me, I'm going to have some fun. Anyway. It is one of the most beautiful views in the world. It really is the Fortress of Finance, the East Coast edition. They out-trust us, too. We've got a big trust back in the studio.

1:06:53The trust is really, really good. But this thing is just a real monument. It's fantastic. I see Andrew Reid down there. Incredibly active. There he is. There he is. Hey. There he is. Come on up. Come on up. He's working on it. He's working on it. He's good. He's on the schedule. Andrew Reid will be joining us. Yeah, we'll bring him in at some point. I think we have him on at three. But yeah, it's great. Can we see Kramer? Is Kramer around? I don't know. I do believe we're going to be able to see. I do see CNBC over there. But yeah, what I was, I mean, the whole floor is buzzing and it's obviously Klarna IPO is a big deal.

1:07:31But just seeing all the different pods, everything is really cooking today. the IPO market's fully back in swing. There's something like seven IPOs this week. Yeah, I mean, we were talking about, like, there were other companies that were like, is that going to go out the same day? And like, should we try and have that CEO on? There is a lot going on. Yeah, there's Figure in the works. StubHub is in the works. It's not Figure, the robotics company. It's Figure, the blockchain company. Is that correct? Blockchain lending. Yes, blockchain lending. Okay. We will have to get sharp on Figure at some point.

1:07:59Yeah, we're working on getting the founder on. What else is going on in the timeline? I don't have Wi-Fi. So I am guessing, but you can pull up the timeline. Daniel Prunk says skepticism is gone from the market. Oracle is saying it will basically build, listen to this, Oracle is saying it will basically build AWS in five years, and no one seems to be stopping to ask how. Amazon, Microsoft, Google, Meta are all struggling to build enough infrastructure. How does Oracle plan to do so? So he is a little skeptical of Larry. Yeah, it's a big backlog. It's a big backlog. It better be heavy open AI. Well, this question is just asking how do you plan to physically build?

1:08:44Assume the demand is there. How are you physically going to build it? You're going to need a bigger tent. It's going to be a lot of tents. It's going to be a lot of tents. How much are they spending on Stargate 500 billion, supposedly, and Zuck is penciling out$10 billion clusters, the trillion dollar cluster. I mean, like if you talk to the folks at Situational Awareness and Thropic, like these numbers line up with straight lines on log graphs. So, you know, it is sort of like somewhat unexpected from Oracle specifically. Here he is. Here he is. How are you doing? Man of the hour. Boom. Thrown on the hat.

1:09:28Here we go. Second IPO. Great to see you. How are you doing? How are you feeling? Thank you. They really treat you like the mayor around here. Sorry for being late. I was picking up some market color. Okay. What's that? From the floor traders. I feel like I needed to accumulate a little bit more. Okay. I need to know where rates are headed. Okay. Yeah. I need to know where interest rates are going. What did you get for us? What's the market color? What are people saying? Everyone's talking about Klarna. Okay. Yeah, yeah. I'm very excited. What about interest rates? Anyone? That's proprietary. Proprietary.

1:09:56Okay. Proprietary alpha. Yeah. Yeah, it really is great seeing you back here. I love hanging out in the stock exchange. That's fantastic. I also love hanging out in the stock exchange. Tell us the initial story. How did you initially wind up investing in Klarna? Well, when Sequoia first invested in Klarna, I was a sophomore at Amherst College. I think I probably could have pointed roughly where Sweden was on a map, but I certainly never been there. And Mike Moritz, who had famously invested in PayPal and Google and a bunch of other great companies, And a guy named Chris Olson, who's now at a firm called Drive Capital, worked together.

1:10:35And Pat Grady, by the way, also did some of the initial financial modeling when he was a green associate. And we invested in 2010 in a company that was a Swedish alternative. Jump scare. Whoa. So it was, you know, Swedish slash maybe pan-Nordic alternative payment company for e-commerce where, you know, you wouldn't pay until the thing arrived. So you knew you were going to get what you were getting. I mean, a lot of Europe at that point was e-commerce, and the internet was there, but they didn't have the payment rails. So it was like, you pay cash to the delivery driver. Exactly. And Klarna was like powering that and building on top of that, those rails.

1:11:20Yeah. Like not even, I don't even know if you can call them rails. Hands. And you go into the memos from back in the day, it was, how might Klarna find success in making its next hop? So it was Germany and the Netherlands. And we had this incredible detail on like, might they succeed in Germany and demographics in Germany and competitive landscape? And the Netherlands seemed like, oh, if they do that, we're money good. Yeah. And and one thing sort of led to another and Sebastian just put his head down. And 15 years later, with all of the ups and downs and twists and turns has. Yeah. Sebastian, Sebastian, he has that dog in him.

1:12:08He does. Truly. It's crazy. Yeah, I can see that. I mean, he comes through incredibly, incredibly relaxed. But it says a lot that he's here. He said today he didn't sell a single share. He's all in. He is all in. And the other thing that stood out to me, I just thought this was hilarious. He said he didn't bring his family here. It's just like a work trip. He just came to Wall Street to IPO in just another week. Yeah, he is very eager. He is very eager to get back to work. But Nicholas, the CFO, has anyone to shout out Nicholas? No. legend Nicholas the Glean carna CFO probably incredibly important for this business he has been yeah for all the reasons you might imagine pay some salaries exactly you can get a cash crunch and describing that in the early days Christmas came and they had a ton of cash that needed to go out the door yeah Nicholas is I'm pretty sure taking a nap right now yeah I think he is in fact I can guarantee you that he's taking a nap right now before dinner okay yeah I'll put it back on when I leave.

1:13:15Where I guess like walk through, by the time they were going to enter the U.S. market, you were on Team Sequoia, right? Yes. You were able to witness that. Yeah. I guess give us a backstory there because I think that the level of traction they have in the U.S. market was, I don't even know if you could have underwrote that as they were starting that journey. So when I joined Sequoia in 2014, Klarna was still blue Klarna. They had not yet made the transition to the pink Klarna. And the logo did feel a lot like PayPal or Affirm or JP Morgan Chase. It sort of felt like that sort of a company, but coming from Northern Europe.

1:13:56And in the mid-2010s, the whole brand of the company was repositioning much more consumer-first, different. We're going to go after the retail banks and not just try to build a nice, profitable, compounding, pan-European business. And one of the reasons to do that was to expand into the U.S. And it was around this time that the term BNPL, BNPL wasn't a term until probably 2017. Sebastian had been doing this since 2005, right? So it became a big thing. And Afterpay started taking a lot of share in a firm, obviously, was doing tremendously well. and the thing with Klarna's business obviously is each country is different.

1:14:37Right now a huge portion of the Swedish population uses Klarna every month and for those customers Klarna has seen them a zillion times by now. When they're underwriting a transaction it's the zillionth transaction for that customer. Going to a new market you're having a lot more first-time customers so the business model is very different country by country by country. And just cultural differences between the U.S. consumer and merchants and exactly. Frequency. Yeah, American consumers don't have the same loyalty to Klarna, right? It's not like a national champion. They've not even heard of us.

1:15:10Yeah, exactly. But then Klarna got into the U.S. in the end of 2017, 2018. And then really during COVID, when e-commerce obviously was booming, that's when they really got their foot in the door with the big U.S. merchants. But amazingly, if you look at the momentum now, in the F1, I hope we get these numbers right. You know, Q1 year-over-year growth in the U.S. was 33%. Q2 was 38%. So, like, the actual forward-looking momentum or not forward-looking statements. The real-time momentum for Q2 is very, very impressive. Yeah. How do you think about the long-term structure of the fintech market broadly?

1:15:53It feels like there's a ton of companies that I can think of that are like big scale Decacorns or almost 100 billion. You're invested in many of them. Founder led big, you know, big markets already, but going into super apps and everything apps. But at the same time throughout history, going back to like Goldman and JP Morgan and Morgan Stanley. We've always lived in this world of oligopolies. Should we be thinking about long term fintech? Like, it's like hyperscaler clouds. Like, it'll be competitive, but everyone will still make money. Or is there a winner-take-all world in point solutions? Like, how do you think about the market in the long term?

1:16:31The thing I find most interesting about fintech, especially for a company like Klarna, you know, which has its footprint across Europe and the U.S., like, fintech penetration in Europe is actually quite high. You know, if you think about Revolut's market share in some of these European countries or Trade Republic for trading or Klarna for payments. Yep. And, you know, they've really started to make a dent on the legacy retail banks. And the U.S. fintech market share is still tiny. Yeah. Right. And that's where they're eating from. And I think the U.S. market, which obviously is the biggest profit pool in the world.

1:17:07Yep. That's right. It's still pretty much it's J.K. Morgan. It's Wells Fargo. It's Citigroup. It's in that huge long tail of, you know, from the next tier down to the credit unions. Yeah. And also, I mean, with ACH, like Visa and MasterCard, there's also market share to take from that. Yeah. And, you know, not to mention stable coins. There's so much things are happening in US FinTech. And somehow US FinTech is like lower penetration than Europe FinTech. And I think of a company like Klarna, which is obviously going to be growing here. How are you thinking about early stage FinTech? because with that frame of mind of like, if I'm going to be a fintech founder, I'm going up against Sebastian Klarno, you know, Max Levchin's an active founder.

1:17:54You got Brian at Coinbase, Vlad at Robinhood. Yeah, I've seen that YouTube video, dog. You got Eric, you got Eric at Riff. It's just like every category has like a serious person with like a billion dollars on the balance sheet and they're ready to go and they're bought in and they're not asleep at the wheel at all. It's not the early days of like, you know, enterprise software was like, oh yeah, there's some integrator that did this in the 60s with paper, and you're just gonna take everything. So how do you think the next wave of fintech at the early stage looks? Is it just, yeah, what have you thought?

1:18:26Yeah, the last, I dabble in fintech. I wouldn't say I'm, compared to someone like Roloff, who knows everything about everything, I'm certainly not a specialist. The last fintech investment that I led was in a company called Phantom Wallet, which is, to me, it's sort of the, you need a discontinuous shift in the market. You need something meaningful to differentiate yourself along. So for Phantom, it was centralized to decentralized wallets. Yeah, and then benefiting from Solana, like timing, picking the right chain to originally partner with. Yeah, to get out of the gate. Now it's multi-chain and it's all non-custodial and it's a different business model, different footprint.

1:19:07That to me is the sort of market change you need to be like to plant your flag and go up and compete against people who have big footprints yeah because you're right these like the being counterpositioned mentioned the founders you just mentioned are they're not asleep at the wheel not even close asleep at the wheel and so it feels dangerous to go like head to head with any of these guys uh but but yeah something completely different counterposition like that you carve out and then you can weave and build and eat off of someone else's plate for sure yeah it makes a ton of sense what was going on in 2021 and 2022 when Square bought afterpay for now, if you just look at the transaction value, it's like, I think it's like 65, 70 % of their current market cap paid, or their current market cap.

1:19:52What, why do you think, yeah, was that just like fintech overheated broadly? Also, I think there are a few of these stock for stock deals during that era. I think Okta Auth0 is another one, you know, where the actual mark to market value of the transaction was just different than what was reported at the time. Yeah. I think like, you know, the Peter Thiel thing about how in 1999, there's a moment of peak clarity at some level where like, you know, we saw the future perfectly. We just totally overestimated how fast it would come. Yeah. I think a lot of the e-commerce things in 21 remind me something of that where we were on a straight shot.

1:20:27There was so much demand. It was also the, you know, the COVID boom, e-commerce. And it was, you know. And I think we just actually got back to the same level of e-com penetration that we had in like 2020, 2021. Yeah. We're back to the same original growth trajectory. Not growth trajectory, but I think overall penetration. Yeah, but the way I think about that trend is, you know, in 2021, it was obvious that we were headed towards 50 % plus e-commerce penetration across categories. And it's happening so quickly. And then 2022, 2023, the narrative was like e-commerce is dead. It was all pulled forward, you know.

1:21:01Yeah, yeah, yeah. And then sure enough, like, no, we are in fact headed towards e-commerce penetration. We're eclipsing those levels. Yeah. And now you look at the, you know, the Shopify numbers that came out. Their quarter was incredible, right? Like on top line and everything else. So it's like, yeah, e-commerce is still a long-term trend. And that's even during this rocky year with tariffs and uncertainty on the vendor side or on the merchant side. Yeah. Anything else? I hear we have some people waiting. Yeah, okay. I have a bunch more questions, but come on the show again. I'll be I'll thank you for being here.

1:21:32I'm sure we'll be back here. I mean, you guys are the stock exchange. It's fantastic. It's the best place to hang out. Thank you. Well, thank you guys. Have a good one. Thank you. Thank you. The mayor of Nicey. Let's bring in Marcus.

1:21:46What? Okay. That's not really some breaking news. One second. Yeah, we're OK. Let's let's bring in Marcus. Yeah. And. Hey, Marcus, good to meet you in person. Absolutely, likewise. Great to meet you. Please take a seat. Would you mind introducing yourself for the stream and then we can talk about everything? Sure. Hey, I'm Marcus Willig, founder and CEO of Bolt. And do you remember the first time we interacted online? I do. I made a YouTube video essay all about Bolt. I had a friend on my team who was obsessed from Estonia and I dug in and it was the most fascinating story. And I remember asking you, so did I get the story roughly correctly?

1:22:27I should have just asked you because I wasn't doing I was doing video essays like blog posts instead of like actual interviews But here we are interviewing. All right. Anyway, tell us your story of how you got involved in Klarna Sure, so I Started the bolt as an entrepreneur when I was 19 years old back in 2013 And back then I was looking at our neighboring at our neighboring country of Sweden Yeah, where Klarna already back then was one of the biggest tech companies So I was always following it when we were building bolt from Estonia. This is like a role model exactly So, I mean, I saw they were obviously in a very competitive space, very tightly regulated, complex.

1:23:00And I saw they were doing well in Europe. And then over time, they started obviously expanding outside as well. So, that was a big role model for us. So, that's how I sort of started following the company. Yeah. And walk me through a little bit of your journey. How long did it take you to expand? Like, take me through the first couple eras in the acts. Sure, sure. So, I mean, with Bolt, we took, I think, a lot of lessons from what Klarna has done as well. So we first focused on winning in our home market. And obviously our product set is a bit different there. And I think the same applies to Klarna, where the products they offer in Europe are a lot more comprehensive than they already do in the US.

1:23:34And then we just first saturated the home markets and then started expanding. And I think Klarna has done the same strategy really well. That's fantastic. Is this your first IPO, first public company board? It is, actually. So for the 12 years, I've only been focused on Bolt. I haven't wanted to take on any distractions. But we've grown to know Sebastian and the Klarna team over the years and I was always really impressed. So earlier this year when Sebastian reached out that would I be open to joining, I thought about it for a couple of hours, but it made a lot of sense. It only took a couple of hours.

1:24:06What are the benefits of being a founder CEO on a board? I know that there's people that do public company board work and that's how they pay the bills. But for you, it must be more about the connections and the industry insights. Is that something? How do you think about it? Absolutely. So actually, I mean, Sebastian pitched really well to me. So I was like, hey, like, I think there's three unique angles here. A, we're one of the largest European technology companies with 110 million customers. So I think you can learn a lot from what we've done. Second, they're one of the few European companies that's really made it big in the U.S.

1:24:38And obviously for any company in the world, like coming to the largest market and succeeding here is a big lesson to learn from. And third, he was like, we're going to have a Blockbuster IPO. So you want to join and see how that's done. And I think all of those three things have proven to be true over the last year. What is Klarna getting right about running a company that's sort of a two-sided marketplace? They have customers that need to implement Klarna and then customers that use it to check out. And you're in a similar business where you have drivers and riders. What lessons have you learned from their branding, their business, their marketing, anything like that?

1:25:12I'd actually say that building a payments network and building a ride-sharing network actually have a lot of similarities in terms of how you build a two-sided marketplace. And what we found is that this always starts off on the supply side because unless you have the right supply available Like there's little value for the consumer and I think that's actually what Klarna has always got right They're very customer obsessed and they wanted to go and make sure they get the best merchants all around the world to sign up with them So you can use Klarna as a payment method and then once you have the supply base and you have a great product offering Then it makes sense to start to focus on the consumer side Yeah, otherwise, you know, you can bring millions of consumers to the platform if they can't use it to pay anywhere It's useless.

1:25:46Yeah, that makes sense Talk to me about the state of ride sharing and Bolt's business. In San Francisco, everyone's obsessed with Waymo. Elon's talking a big game about RoboTaxi rolling out. What do things look like in your business and where do you see things going? So, first of all, I think it's great. Self-driving cars are completely going to revolutionize cities. I think for Bolt specifically, we're really well positioned. So this can 100x the size of the business. And we're really looking forward to the next decade. On the other hand, though, we've got to be a bit more realistic. And I mean, I'm always the pragmatic guy in the room.

1:26:20So when I look at the numbers, we've got to admit, these things are still a number of years before the commercial unit economics makes sense. I think it's one thing to put a couple of thousand cars on the road. And I think what Waymo has done is absolutely unique and impressive. But they are operating only in the wealthiest cities in the world. It's still going to take a number of years before the costs come down to a level where you can actually offer this in most cities, not to mention in Europe, but in emerging markets as well. So in that sense, I think Paul's business is quite well insulated.

1:26:46Like we have five to ten years before it is going to have a major impact in terms of any downside or risk to our business. Yeah, I think the bull case for at least Uber in the era of self-driving is that Darko Shari ran, was it TripAdvisor before? Expedia. Expedia. And that is an aggregation platform. They don't own any planes. They don't own any airlines. They route you to the correct airline. Are you thinking about the business similarly? If there's an owner of a self-driving car in 10 years from now and they want to bring their capex or their asset to the Bolt network, you act as an aggregator for customer demand for them?

1:27:27Is that the correct partnership? I think the industry is for sure going to evolve over time and it's still not clear how it's going to end up 10 years from now. But I think in the short term, we're absolutely ready to own the cars on our own balance sheet as well. Oh, interesting. So do you own anything right now, scooters or anything? We do, actually. So I think that's a core distinction Bolt has versus any other ride-sharing company in the world. This is the craziest thing. You went into scooters and you didn't get destroyed. But to me, that feels like, again, something we've been asking some of the other guests is cultural differences between the American consumer and maybe the European consumer in America.

1:28:03I was living in L.A. during the Bird scooter era, the Lime scooter era, and people used to destroy scooters for sport. It was like, it was a pastime. Wait till you saw what happened in Paris. So, I mean, they were like, we were at some point losing 2 % of the fleet each week. What? What are they doing? Throwing it in a pond or something? Literally into the river. Into the river. Into the Champs -Élysées. But there are markets that work where people respect the robots and they take care of it. Absolutely. And I think overall, though, like when we just like compare the journeys of Bolt and Klarna, I think there's a lot of similarities with how these European companies are built.

1:28:36I mean, generally, we start off not having access to the same amount of capital. So that forces us to be a lot more frugal and more efficient in how we operate. You don't want to lose 2 % of the fleet weekly for that long. No, no, exactly. We didn't raise hundreds of millions for the scooter business. We had to be very clever in how we operate it. And so I think overall, I mean, what we've done is that we've operated some of these hardware CapEx heavy business as well, whether it's scooters or we have a car sharing business with thousands of cars who operate in more than a dozen cities around Europe.

1:29:02So in that sense, like we're not really afraid to similarly operate self-driving cars if need be in the early stages of the market. Long term, once this gets into hundreds of thousands of cars, obviously the industry is going to pay out. How did the initial Sequoia deal come together for you? Because I don't think they have an office in Estonia, but it's through the straight mafia or the Skype mafia. So actually, I mean, Sequoia, back when they invested in us back in 2021, they hadn't made too many European investments. I think actually Klarna was probably the first one they did a long time ago.

1:29:29And I think that was a successful one. So they started looking around more in Europe. Okay. And actually funny enough, I met with two of the Stripe founders. Really? They actually, so they came to Estonia. It was a great fun time catching up with them years ago. Yeah. And then actually they went back to Silicon Valley and then they were chatting with Sequoia about what are some interesting startups they've seen in Europe. And then Bolt came up and that's where their original interest came from. What's the state of the Estonian early stage startup scene? It's fantastic. Honestly, I think the Estonia startup scene per capita is the best in the world.

1:30:02Tallinn is half a million people. We got 11 unicorn companies. So for sure there's something in the blood in the Nordics. When we look at Tallinn or we look at Stockholm, they're just absolutely per capita better than almost any city in the world. And when we look at just the number of entrepreneurs coming out of these companies, whether it's Bolt or Klarna as well, it's absolutely fascinating. I mean, this is booming now the second and third generation of companies. A couple of the narratives that I've heard thrown around about why Estonia punches way above its weight relative to population size is a huge investment in high-speed internet early on and then also just the the the geopolitical situation of becoming an independent country and having the entire population animated hey wait we got to take this stuff seriously guys do those two narratives sit well with you does that sound about right I'd say those are absolutely true I mean again when we look at I mean Estonia was under Russian occupation for 50 years and during the communism era entrepreneurship was literally banned so you had all this bottled up energy for decades where people wanted to build businesses that couldn't so when in 91 Estonia regained its independence we had this massive entrepreneurial boom where everybody wanted to build a company yeah so that's the environment I grew up in but I that actually a very very important factor that I think is same for Sweden and Estonia is that we have some of the best education in the world yeah so when you look at all the PISA rankings etc Estonia is always at the top and so is Sweden and I think that's the other that's fueling all the technology company creation in both countries.

1:31:27How are you thinking about artificial intelligence, just AI generally, either applying it to your business or this idea of building a data center? We've heard from two CEOs, two public company CEOs in the last week, that they are happy to not grow headcount, but they're certainly growing revenue, right? So that's Alex Karp over at Palantir and then obviously Sebastian here at Klarna. Is that a similar approach that you're taking in terms of finding what that balance is? Absolutely. So actually, it's very similar, I think, with us and with Klarna over the last couple of years. So Klarna has done it, I think, even better than what we have.

1:32:04They've actually reduced headcount meaningfully over the last couple of years, partially by just improving efficiency through conventional means, partially by AI. And it's been the same with us. We've now been massively growing the business the last three years, and the headcount has been completely flat. So the only department that's been growing has effectively been tech. and in every other department, we're just finding more efficiencies. Yeah. What about a data center, a national champion, an AI national champion in Estonia? Do you think we'll see it? Do you think that there's, is there a potential for, even if it's like latent capacity, there's just like a cheap data center down the street from the school and we get another wave of that story of the past internet and there's a 13-year-old kid who's like, yeah, I'm going to fine-tune Lava 4 or something and you get the next generation of entrepreneurs.

1:32:49Do you think that's possible? I wouldn't rule it out, honestly, because when we look at where is the biggest concentration of data centers in Europe, it's usually in the places that have very good grid connectivity, that have cheap power, stable internet, etc. And actually Nordics has been one of the most dominant places for it. Yeah, Nebius is, I guess, main data centers in Finland, right? Exactly, which is literally between Sweden and Estonia. And I mean, you saw the announcement probably today from them. So overall, we're not ruling it out that very likely they want to expand in the region, setting up more daily centers both in Sweden and in Estonia.

1:33:20What about the geographic footprint of Bolt now? I know there were experiments or business expansion into Africa. How are you thinking about conquering the globe, playing the game of risk internationally? So again, for us, the first priority was we needed to win the core markets. We needed to have a home base that was generating enough cash flow so we could offset the costs and actually generate some actual capital we could use for expansion. So we did that first in Central Eastern Europe, which we're now by far the number one player in. Then after that, we looked at the emerging markets. So Africa was top of the list, but also some markets like Paraguay, Mexico, Thailand, where we're again now doing extremely well.

1:34:00And then actually we did this a bit unconventional story where then after that, we went to the more established markets like Western Europe and Nordics. Sure. And funny enough, actually, it was a very easy expansion then for us because we started off in these low cost markets that are hard to compete in. Same, same, same with Klarna. Exactly. So that was what I was about to get to that. Like if you're able to operate with very low ASPs in very difficult markets, then actually later going into high ASP, much more wealthy markets like the US is significantly easier. And I think that's why also Klarna has been taking so much share here and then winning the market.

1:34:31Yeah. Do you think that you'll expand in the US or has the capital fight already played out? Is there any opportunity left? Not something I can disclose today, but keep watching us, and there's probably going to be some news in the future. We will definitely be following. Very excited. Well, thank you so much. Thank you for joining us. This was a pleasure. Thank you. Great to meet you. We'll talk to you soon. Come back on the show anytime. Absolutely. We'll zoom you in. Some crazy news hitting the timeline. I don't know if you saw. I did not. Charlie Kirk was shot at an event. It's unclear yet if he is alive or dead, but absolutely tragic.

1:35:11Otherwise, Sam Altman was on Tucker. He went on Tucker Carlson. Sam Altman was confronted by Tucker about the death of the OpenAI whistleblower. Just do cheers. Sam Altman says, I haven't done too many interviews where I've been accused of murder. I mean, that makes sense, yeah. Crazy. That is a crazy, crazy story.

1:35:36three, I guess, Oracle and OpenAI have signed a$300 billion computing deal. So you basically called this earlier in the show. Where is that revenue ramp going to come? It has to be underwritten on the growth of OpenAI's cloud business. OpenAI's losses are Larry's. Yeah, yeah, his revenue. But OpenAI, yeah, I mean, they should be losing, burning as they grow. But, you know, they will still be bringing in a ton and ton of revenue on top of this, both on the business-to-business side, which they're taking more seriously, in the provision of tokens. They're starting to take coding more seriously. Obviously, this has been kind of the narrative around GPT-5, was that GPT-5 was them kind of redoubling their efforts in just selling, being token sales for B2B.

1:36:40And so the thesis that everyone's been kicking around is basically we could see an oligopoly in frontier model inference sort of play out. You have GCP with Gemini rolling out. You have Anthropic obviously teamed up with Amazon, and then you have OpenAI teamed up with Microsoft, but also needing to scale their own business. They've been hitting rate limits. Ben Thompson's been talking for a long time about why do I have a rate limit on my consumer app? Your consumer app is fantastic. Pull back on the business-to-business side. Well, if Oracle can deliver massive tenths of H100 equivalents, they're good to go.

1:37:25and OpenAI has been co-developing chips with NVIDIA. Put those, you know, but you need someone that's like a hyperscaler, like Oracle, to actually go and implement that. Anyway, our next guest will be here in a few minutes. Do you have any other? Prayers. Yeah, this is some shocking news. Prayers for Charlie Kirk, regardless of your political beliefs. It's absolutely tragic. I feel like X needs to figure out some type of, give people content warnings. There's been a lot of videos floating around, but absolutely tragic. Yeah. Insane. Well, anything else? We have Lynn Martin from the New York Stock Exchange joining in just four minutes.

1:38:11We will bring her onto the stream.

1:38:18Let's see what the chat has to say. We miss you guys. Yes, we've been on the road for two days. We will be back in the TVP and Ultradome tomorrow. A little bit more travel coming up, but hopefully the great lock-in begins in full the following week. And the chat is also talking about this news. Very, very sad. Very rough. Yeah, everyone's saying don't open X. so if you're watching this on x i guess go over to youtube i guess over to youtube or log off well rough well um we have uh two two or three minutes until our next guest is joining we are going to be hanging out here uh we are again if you're just tuning in live from the new york stock exchange in new york city manhattan if you couldn't tell if you've been maybe maybe you're listening to the audio, you know, yeah, we are at the Klarna IPO.

1:39:21We've interviewed the CEO and other folks board members today, Marcus village. Marcus village is such a such a wild entrepreneur. The the clickbait title that I used or my team used on his video essay was Europe's youngest billionaire. And it ripped it has a million views on YouTube. Wow. Ripper. Ripper seems like a Chad. Yeah, he's a killer entrepreneur. started the business very young in a very contrarian market. There's this massive capital war going on over in America, Lyft and Uber, of course. And he's just like, I'm going to work on myself. I'm going to be over in Europe building. um anyway uh anything else you want to talk about um really uh nothing like a shooting to kill the vibe incredibly vibe killing.

1:40:15I agree. I agree. Still unclear what is happening. I'm sure the story will develop over the next 24 hours. Hopefully there will be some good reporting from the folks who cover this sort of stuff. It is a bankless job. Not our wheelhouse. Not our wheelhouse at all. Anyways. We were hanging out. Yeah, it's tough. We like to have fun on this show, but it doesn't feel right when a tragedy like this strikes. It is rough. Yeah, I feel bad for people that people are sharing around a close-up video of the shooting, which seems like I'm sure Nikita can figure out a solution so that people... X does have the ability to add a sensitive content warning before an image, but...

1:41:19Who's adding that? Also, I'm not exact. I've seen people use it as a meme, so it must be a button that you can click, but I have yet to actually see that used. And if it kills your reach in the algorithm, people won't do it because they want to grow their accounts no matter what. Very, very rough. Tough day in the news business. Well, on some other good news, in 10 days, Jason Carman will premiere his first sci-fi film, Planet. Come see it. He's playing it at the Palace of Fine Arts in San Francisco. And you can go and get tickets. So if you're in San Francisco and you want to see Jason Carman's latest work.

1:41:58This morning, Bucco Capital bloke said, my timeline is literally just Oracle earnings and a woman being murdered. Obviously, the... Yes, yes, yes. The other murder.

1:42:15really really tragic we condemn violence of all forms of course yeah and it's just you violence generates more violence very rough well we will be closing out in just a minute in the meantime let me what else We've unfortunately been missing a few big fundraising announcements, but we will be catching up with tons of founders tomorrow. Be sure to tune in. And we'll also be taking you through hopefully a bigger deep dive. I would love to go deeper on the iPhone. I don't know if you saw that x-ray photo of the iPhone Air, but folks were speculating that this looks like the future. We have Lynn Martin coming over.

1:43:05Fantastic. Oh, she has her hat on. She's got her hat on. She has her hat on already. Welcome to the stream. I gotta put it on quickly. Here you go. Good to see you again. Hey! Good to see you guys. Thank you so much for hosting us once again. Got the hat. You got the hat. Thank you for wearing it. Walk us through the day. Yeah. How did today go? Great. Today went great. I mean, just since we saw you, how busy have you been? I feel like when we left, we were like, we'll be back for the next one. And then I think the next one happened like literally the next day. So there's been a number of IPOs, right?

1:43:46Walk us through the last couple of weeks. Like what's been big? There's been a bunch. There's been Bullish. There's been MyAx. There's been quite a few that have been coming out. I mean, I know we talked about, we're obviously here for Figma Day. Yep. It's fantastic. We have Klarna today. We got Via on Friday. We're excited about that one. Very cool. next week. It's going to be busy too. So we got, the market is open. You know what? I really feel like the market's open because the traditional media just said, yeah, the IPO window is open. It's been open. Yes, it is. Yeah, it certainly felt like that.

1:44:24Today feels even Sebastian himself was remarkably calm and collected. And when you look at the process this morning, I'm sure, I don't know what was happening behind the scenes, but it felt like this is just another day at the office for you guys. It went very smoothly. It went very smoothly, and this IPO had a different pop, but it stayed there, which is good. It's still healthy. It was like a textbook IPO. Traditionally, you want to see that 20 % pop, and that's kind of where they are. I think they're about 25%, maybe 30%. Let's give it up for the investment bankers. That's not so appropriate.

1:44:58It was great. It was great. It was great. But I mean, this this deal has been thinking about going public for a couple of years now. It's been rumored for a couple of years, been working with them for a couple of years on IPO readiness. So everybody had to be patient. Everyone had to be patient. But now that this one went well, I think the next few are going to go touch wood. OK, as well. Give us your thoughts on the market overall right now. obviously yesterday was crazy Oracle earnings I was going to say this is kind of a huge day here as well I mean we're so proud to be partnered with Oracle and Oracle will be one of our list of companies last I checked it was up 35 % which is more than that now it is because they just announced the partnership with OpenAI it's like good news plus good news plus good news that's a lot of RPO yeah Yeah.

1:45:59Massive backlog. Yeah. I mean, thrilled for them. Yeah. And I'm thrilled to see the market rewarding them, too, because that's been a deliberate strategy that they've employed. They've kept, they've stayed focused on rolling out that strategy. And now they're seeing success from it, which is great. It's good to see Larry finally get a win. He's been a bit of an overnight success. He's been working at Oracle. Decades in the making. Grinding away for decades. Give us the update on Texas. Yes. please yeah so we announced NYSC Texas February 11th 12th 10th something like that opened on March 31st and now have just over 50 listed companies and 13 listed ETFs so incredibly excited we just had a big launch party yeah we're at at the star Dallas Cowboys Stadium although I'm a Giants fan well that was Sunday was rough for the New York Giants.

1:47:00I don't know if you watched it. What goes into the decision to go to Texas instead of New York for a company? Yeah. So the reason we launched NYSE Texas was because of the amazing pro-business legislation that Governor Abbott's been pushing forward, really filling a gap around company governance and a variety of other measures yeah uh it's been met with tremendous positive reception you see companies moving their headquarters changing where they're incorporated from state that y 'all are based in california in particular to texas but also some of the new york companies have built huge presences yeah joe lonsdale at abc's talked about it a lot elon musk's talked about it a lot starbase is a company town now it's become a whole i know economy unto its own we had a friend who We went and toured it and they have their own shops and their own housing.

1:47:59Everything has become this massive movement over there. Yeah, and Illinois as well. A lot of companies have moved out of Illinois to Texas. So we were just being responsive to our customers. In Texas, does that just align you with being registered as a business in Texas? It allows you to benefit from some of the pro-business legislation. But is it a prerequisite to be headquartered in Texas? You don't have to be headquartered. It's an or. Okay, it's an or. And cool. But it's a way to align the whole stack. Our first company to do a list on us was Trump Media and Technology, which is based in Florida.

1:48:38Sure. So they're not even based in Texas. But they were such proponents of the pro-business mentality, the pro-business legislation that was going through. Yep. That makes sense. taking a step back, what is the right profile of a business in the current IPO market? I think that there's so much capital available in the private markets. We haven't seen as many. I would have thought we'd maybe see some AI companies getting out with sub nine figures of revenue. We haven't seen that, at least from our view, a ton so far. So what is the investment banking community see as like the right profile for a company today?

1:49:22I mean, there's always the question around the rule of 40. I think the companies that are being rewarded are the ones with a very deliberate strategy that they've had a track record of success with, not a strategy that is throwing a bunch of spaghetti against a wall and seeing which of these products winds up sticking, staying very focused on the strategy and telling the story of, okay, here's the core products, and then here are the additional products that we're layering onto those products. There was a question for a while of whether a company needed to be profitable or not to go public. I don't think you do.

1:50:01I think you need to have a path to profitability that you can articulate to an investor, but you don't have to be 30 % EBITDA margins, things of that nature to go public. Yeah. Do you think it's helpful? I mean, how helpful is it that a firm reported earnings like a couple weeks ago did very well? I think people woke up to the, you know, that felt like kind of a turning point in people in the way that people were kind of viewing PNPL as a category. Does that help at all with, you know, Klarna's Roadshow and give people more confidence in the category? I think probably one of the success points for Klarna's Roadshow was the expansion that they've been able to do, not just in Europe, but also outside of Europe into the U.S.

1:50:50market. I'm sure that was something that resonated with investors. Macroeconomic environments also tend to factor into a lot of these roadshows as well. What do you think changed that sentiment about profitability to go public? Is it okay to chop that up to what Jeff Bezos did for so long with Amazon, just not really delivering profits to shareholders, reinvesting them again and again and again? Is that, do you think, the story that people should be telling? Or are there other companies that have done it really well? Yeah, I think when you're with an investor, they're asking you what you're going to do with your capital.

1:51:33Are you going to use it to pay down debt? Are you going to return it to shareholders or are you going to reinvest in the business? I think any of those answers are good, particularly with companies during an IPO process. Investors do want to, many investors, not all, but many investors want a medium to long-term growth story and that's going to involve reinvestment in the business. but there's needs to be a clearly articulated story about where you're investing and why you're investing and how it's going to make your business stronger or provide a really unique entry point into another tangential area to your business.

1:52:18Well, thank you so much for coming on the stream. Thanks for having me. I put my hat back on. There you go. Thank you for representing. Yeah. And thanks for always great to be here. Great to be here with you. Hopefully we'll be back soon. Hope to have you back soon. Absolutely. The market's opening up. It's open. It's open. We'll come find you after that. All right, cool. See you. Cheers. Bye. And on that note, I think we can wrap it up. Thank you so much for tuning in to our live stream from the New York Stock Exchange. We will be live from the TBPN Ultra Dome in Hollywood, California tomorrow.

1:52:53So tune in and we will bring you a lot of news. Thoughts and prayers to Charlie Kirk and his family and loved ones. Absolutely tragic. Thank you for watching. Thank you for tuning in. We'll talk to you soon. Cheers.