Swiss Fintech Klarpay Ends 2023 with "Substanial Annual Profit"

by Damian Chmiel
  • The company did not provide exact financial figures.
  • However, it reports profitability has been achieved after just 6 months since the start.
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Bloomberg
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Klarpay AG, a deposit-taking financial institution authorized by the Swiss Financial Market Supervisory Authority (FINMA), announced on Tuesday that it achieved profitability in the first year of its market operations.

Klarpay Ends 2023 in Profit

Although the company did not provide hard numbers, it revealed that the first profitable period was reached six months after the commencement of market activities. The Swiss fintech company was able to sustain the profitability metrics until the end of 2022 and close it with a "substantial annual profit."

"We are thrilled to have reached this important milestone. Our focus on a sustainable business model sets us apart from many of our peers in the fintech industry who struggle to achieve profitability, especially so early in a company's lifecycle. We are excited to continue building on this success in the coming year," Martynas Bieliauskas, the CEO and Co-Founder of Klarpay, commented.

Klarpay is set to focus on its organic operating model and product efficiency in 2023. The company's proprietary software fills a market gap and is committed to delivering innovative solutions that meet evolving customer and partner needs, as demonstrated by its recent expansion of international payment offerings with 13 new foreign currency accounts.

Hard Times for Fintech Companies

Klarpay's profitability achieved in its first year of operation is an interesting topic as it comes at a time when the fintech industry cannot count on investor favor and easy macroeconomic conditions.

According to CB Insights' 2022 State of Fintech Report, funding for fintech companies shrank by almost 50% in 2022, to $75.2 billion. During the last quarter, the industry generated its lowest performance since 2018, raising less than $11 billion in external funding. In contrast, the total number of deals concluded did not fall significantly, contracting by only 8% to 5,048.

Fintech Funding Slashes by Almost Half in 2022. Will 2023 Be Any Better?
Fintech funding declined across all verticals in 2022.

Funding in the payments sector, where Klarpay operates, was cut by 49% to $20.8 billion, which is down from the $40.5 billion reported a year earlier. To add, the banking industry was hit the hardest, with funding falling to $9.4 billion, which is also down 63%.

Watch the recent FMLS22 panel on cultivating female leadership in fintech.

Swiss Fintech Klarpay Becomes Visa Network Member

In July 2022, the deposit-taking company announced it became a Principal Member of the Visa Network. Firms that become Principal Members are able to issue cards, disburse cash, acquire merchants and hold settlement risks, among other capabilities.

"Direct membership in the Visa network offers Klarpay's merchant clients a fast, simple, and integrated way to manage their funds and conduct their day-to-day cross-border transactions," Klarpay explained in the statement.

Klarpay announced that its Level 1 Payment Card Industry Data Security Standard (PCI DSS) Certification will be bolstered by the addition of Visa Principal Membership. To maintain a secure environment for credit card information, the PCI DSS prescribes a series of compliance standards for all companies involved in processing, storing, or transmitting such data.

Klarpay AG, a deposit-taking financial institution authorized by the Swiss Financial Market Supervisory Authority (FINMA), announced on Tuesday that it achieved profitability in the first year of its market operations.

Klarpay Ends 2023 in Profit

Although the company did not provide hard numbers, it revealed that the first profitable period was reached six months after the commencement of market activities. The Swiss fintech company was able to sustain the profitability metrics until the end of 2022 and close it with a "substantial annual profit."

"We are thrilled to have reached this important milestone. Our focus on a sustainable business model sets us apart from many of our peers in the fintech industry who struggle to achieve profitability, especially so early in a company's lifecycle. We are excited to continue building on this success in the coming year," Martynas Bieliauskas, the CEO and Co-Founder of Klarpay, commented.

Klarpay is set to focus on its organic operating model and product efficiency in 2023. The company's proprietary software fills a market gap and is committed to delivering innovative solutions that meet evolving customer and partner needs, as demonstrated by its recent expansion of international payment offerings with 13 new foreign currency accounts.

Hard Times for Fintech Companies

Klarpay's profitability achieved in its first year of operation is an interesting topic as it comes at a time when the fintech industry cannot count on investor favor and easy macroeconomic conditions.

According to CB Insights' 2022 State of Fintech Report, funding for fintech companies shrank by almost 50% in 2022, to $75.2 billion. During the last quarter, the industry generated its lowest performance since 2018, raising less than $11 billion in external funding. In contrast, the total number of deals concluded did not fall significantly, contracting by only 8% to 5,048.

Fintech Funding Slashes by Almost Half in 2022. Will 2023 Be Any Better?
Fintech funding declined across all verticals in 2022.

Funding in the payments sector, where Klarpay operates, was cut by 49% to $20.8 billion, which is down from the $40.5 billion reported a year earlier. To add, the banking industry was hit the hardest, with funding falling to $9.4 billion, which is also down 63%.

Watch the recent FMLS22 panel on cultivating female leadership in fintech.

Swiss Fintech Klarpay Becomes Visa Network Member

In July 2022, the deposit-taking company announced it became a Principal Member of the Visa Network. Firms that become Principal Members are able to issue cards, disburse cash, acquire merchants and hold settlement risks, among other capabilities.

"Direct membership in the Visa network offers Klarpay's merchant clients a fast, simple, and integrated way to manage their funds and conduct their day-to-day cross-border transactions," Klarpay explained in the statement.

Klarpay announced that its Level 1 Payment Card Industry Data Security Standard (PCI DSS) Certification will be bolstered by the addition of Visa Principal Membership. To maintain a secure environment for credit card information, the PCI DSS prescribes a series of compliance standards for all companies involved in processing, storing, or transmitting such data.

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