Perplexity AI

Klarna

Perplexity AI

Perplexity uses a freemium model. The free tier gives unlimited basic searches powered by a standard model.

Perplexity Pro costs $20/month and gives access to more powerful models (GPT-4, Claude, and Perplexity's own models), unlimited Pro searches, file uploads, and image generation. Perplexity Enterprise Pro is designed for businesses with team management and API access.

The company also recently introduced advertising through "sponsored follow-up questions" — a controversial move that some see as inevitable and others see as the beginning of the end for ad-free search.

Klarna

Klarna makes money from merchant fees and consumer interest. Merchants pay Klarna 3-6% of each transaction — they're willing to pay because Klarna increases conversion rates by 30%+ and average order values by 45%.

On "Pay in 4" (interest-free installments), Klarna makes money purely from merchant fees. On longer financing (6-36 months), Klarna charges consumers interest up to 25% APR.

Klarna also earns revenue from its shopping app (affiliate commissions when users discover and buy from merchants), and from its Klarna Card.

Perplexity AI

Aravind Srinivas grew up in Chennai, India, got a PhD in AI from UC Berkeley, and worked as a research intern at OpenAI and a researcher at DeepMind. He watched the ChatGPT explosion in late 2022 and saw something everyone else missed: AI chatbots were interesting, but AI-powered search was potentially more valuable.

Google search hadn't fundamentally changed since 1998. It still showed you a list of links and made you do the work of reading and synthesizing information.

Srinivas co-founded Perplexity AI in August 2022 with Denis Yarats (ex-Meta AI), Johnny Ho (ex-Quora), and Andy Konwinski (co-creator of Apache Spark). Their idea was an "answer engine" — you ask a question, Perplexity searches the internet in real time, reads the sources, and gives you a synthesized answer with inline citations.

No ads. No SEO spam.

Just answers.

The product launched quietly and grew through word of mouth among researchers, developers, and knowledge workers who were frustrated with Google's increasingly ad-cluttered, SEO-gamed results. Within a year, Perplexity was handling millions of queries daily.

Klarna

Sebastian Siemiatkowski, Niklas Adalberth, and Victor Jacobsson were students at the Stockholm School of Economics. In 2005, they entered a startup competition with an idea: let people buy things online and pay later.

At the time, online shopping was still new and most people were terrified of entering their credit card details on the internet. The idea was simple — Klarna would pay the merchant immediately, and the customer would get an invoice with 14-30 days to pay.

The competition judges hated it. The idea was dismissed as financially irresponsible and the team didn't win.

But Siemiatkowski pressed on. Swedish e-commerce was growing fast and merchants were desperate for any way to reduce cart abandonment.

Klarna's "pay after delivery" model was a hit because it shifted the risk — customers could receive the product, try it on, and only pay for what they kept.

The first customers were Swedish e-commerce merchants selling fashion and home goods. Klarna handled the invoicing, fraud detection, and collections.

Merchants saw conversion rates jump because customers were more willing to buy when they didn't have to pay immediately.

Perplexity AI

Perplexity grew almost entirely through product quality and word of mouth. The first users were AI researchers and tech workers who shared it on Twitter.

Every time someone used Perplexity and got a better answer than Google, they posted about it. The product was its own marketing.

The mobile app was a growth accelerator. By launching on iOS and Android early, Perplexity captured users who wanted quick answers on their phones.

The app was faster than opening a browser and Googling — one tap, ask your question, get an answer. Mobile usage now exceeds desktop.

Strategic distribution deals expanded reach. Perplexity partnered with SoftBank (default AI assistant on SoftBank phones in Japan), Deutsche Telekom, and various hardware manufacturers to be pre-installed as the default search assistant.

These deals put Perplexity in front of millions of users who had never heard of it.

Klarna

Klarna grew by being embedded at checkout. The strategy was to sign up the biggest online retailers and become a payment option alongside Visa and PayPal.

Once Klarna was at checkout, consumers discovered it organically. The "Pay in 4" button became ubiquitous across fashion, electronics, and home goods retailers.

The Klarna app became a growth engine beyond checkout. By building a shopping app where users could browse products, discover deals, and track deliveries, Klarna turned from a payment method into a shopping destination.

The app has 35+ million monthly active users who start their shopping journey inside Klarna before even visiting a retailer.

International expansion was aggressive. Starting in Sweden, Klarna rolled out across Europe, then into the US, UK, and Australia.

The US became the biggest growth market — American consumers were especially receptive to Pay in 4 as an alternative to credit cards. By 2023, Klarna had 34 million US users.

Perplexity AI

Google is the elephant in the room. Google controls 90%+ of the search market and generates $175 billion annually from search advertising.

Google has responded to Perplexity by adding AI Overviews to search results — essentially copying the answer engine concept. Google has unlimited data, unlimited compute, and the default position on every browser and phone.

Competing with Google for search is historically a death sentence.

The publisher problem is real and litigious. Perplexity synthesizes content from news articles and websites without driving traffic back to those publishers.

Multiple media companies have accused Perplexity of scraping their content and delivering it as answers, depriving them of page views and ad revenue. The New York Times, Forbes, and Condé Nast have all raised concerns.

If publishers successfully block Perplexity or win legal challenges, the product's utility decreases.

Monetization without ads is nearly impossible at scale. Perplexity initially positioned itself as the ad-free alternative to Google.

But $20/month subscriptions can't fund the compute costs of an answer engine serving hundreds of millions of queries. The introduction of sponsored questions signals that pure subscription revenue isn't enough.

Whether Perplexity can add ads without becoming what it set out to replace is the defining question.

Klarna

The valuation collapse was humiliating. Klarna raised at a $46 billion valuation from SoftBank in 2021.

One year later, they raised a down round at $6.7 billion — an 85% haircut. It was the most dramatic valuation drop in fintech history.

Employee stock options were underwater. Siemiatkowski had to lay off 10% of the workforce.

The entire BNPL category went from hot to radioactive in months.

Credit losses are the existential risk. Klarna is lending money to consumers who want to buy things they can't afford to pay for right now.

When the economy slows, defaults rise. Klarna's credit losses hit $1 billion in 2022.

The company had to tighten underwriting significantly and pull back from riskier markets. The tension between growth (approve more loans) and profitability (reject risky borrowers) defines every quarter.

The IPO in 2025 was a comeback story but with caveats. Klarna went public at $15 billion — a major recovery from the $6.7 billion trough but still less than a third of its 2021 peak.

The company finally turned profitable by slashing costs with AI (replacing hundreds of customer service agents with AI chatbots) and tightening credit standards. But investors remain cautious about the BNPL model's long-term sustainability.

Perplexity AI

Perplexity Search is the core — ask any question and get an AI-synthesized answer with cited sources. Pro Search performs multi-step research, asking clarifying questions and digging deeper for complex queries.

Perplexity Pages lets users create shareable research articles from their queries. Collections organize saved searches and threads.

The Perplexity API lets developers integrate the answer engine into their own products. Perplexity recently added Spaces for team collaboration on research projects.

Klarna

Pay in 4 is the signature product — split any purchase into four interest-free payments over six weeks. Pay in 30 lets customers receive the product first and pay within 30 days.

Financing offers longer-term payment plans with interest for larger purchases. The Klarna App is a shopping destination — browse deals, track orders, manage payments, and earn cashback.

The Klarna Card is a physical Visa card that lets users Pay in 4 anywhere. Klarna Creator is a platform for influencers to earn commissions sharing products.

Klarna AI is their customer service chatbot that handles two-thirds of support queries.

Perplexity AI

Jeff Bezos, IVP, NEA, Databricks Ventures, Nvidia, Institutional Venture Partners, SoftBank

Klarna

Sequoia Capital, SoftBank, Silver Lake, GIC, Atomico, Commonwealth Bank of Australia, Heartland