Snap Inc.

Klarna

Snap Inc.

Snap's revenue comes almost entirely from advertising. Brands pay to run ads between Stories, in the Discover section, and through sponsored AR Lenses and Filters.

The ad business is powered by the time users spend on the platform — over 40 minutes per day for the average user under 25.

Snapchat+ is a subscription product launched in 2022 at $3.99/month, offering exclusive features like custom app icons, Story rewatch indicators, and priority support. It hit 12 million subscribers by 2024 — meaningful but still a small fraction of total revenue.

Snap also sells hardware — Spectacles (AR glasses) — but this has been more of an R&D investment than a revenue driver. Hardware revenue is negligible.

The long-term bet is that AR glasses become the next computing platform, and Snap wants to be the one building the operating system for your face.

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.

Snap Inc.

The origin story of Snapchat involves a Stanford fraternity, a disputed idea, and a lawsuit. In April 2011, Reggie Brown pitched the concept of disappearing photos to Evan Spiegel in their Kappa Sigma fraternity house.

Spiegel loved it and brought in Bobby Murphy, a math and computer science major, to build it. The app launched as "Picaboo" in July 2011.

The initial reception was rough — barely anyone downloaded it. Spiegel's mother was one of the first users.

They rebranded to "Snapchat" in September 2011 and slowly gained traction among high school and college students who wanted to share photos without them living on the internet forever. The disappearing message format felt risky, intimate, and fun — the opposite of Facebook's permanent timeline.

Then came the co-founder drama. Reggie Brown claims he originated the core concept.

Spiegel and Murphy dispute this. Brown was pushed out of the company in 2012.

He filed a lawsuit in 2013 claiming intellectual property rights and breach of contract. The case settled in 2014 for $157.5 million — making Brown perhaps the most expensive person ever kicked out of a fraternity project.

Spiegel and Murphy continued building.

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.

Snap Inc.

Snapchat grew through word of mouth among teenagers and college students. The app spread through high schools like wildfire — kids told each other about it specifically because their parents weren't on it.

The anti-Facebook positioning was powerful: Snapchat was where you could be real, messy, and unfiltered because nothing was permanent.

International expansion drove the next wave. Snapchat invested heavily in localized content, Discover partnerships with local publishers, and market-specific features.

India became one of the fastest-growing markets after they launched Snapchat in Hindi and other local languages.

Augmented reality became the moat. Snap invested billions in AR technology, making the camera the centerpiece of the app.

AR Lenses went from silly face filters to genuinely useful tools — trying on sunglasses, previewing furniture in your room, translating signs in real time. By making the camera "smart," Snap differentiated from text-based social networks and positioned itself for the AR glasses future.

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.

Snap Inc.

Meta (Facebook/Instagram) is the permanent existential threat. When Spiegel turned down Zuckerberg's $3 billion offer in 2013, Zuckerberg responded by copying every single Snapchat feature — Stories on Instagram, disappearing messages on Messenger, AR filters on Facebook.

Instagram Stories alone now has over 500 million daily users, dwarfing Snapchat. Every feature Snap invents, Meta copies within months and deploys to a user base 5x larger.

TikTok redefined short-form content and stole attention from every other social platform. Snapchat launched Spotlight to compete, but TikTok's algorithmic feed and creator ecosystem are years ahead.

Young users who once spent hours on Snapchat now split that time with TikTok.

Monetization lags behind competitors. Snap's average revenue per user is significantly lower than Meta's or TikTok's.

Advertisers often treat Snapchat as an afterthought — they build campaigns for Instagram and TikTok first, then maybe run them on Snap. The company has been unprofitable for most of its public life, with only recent quarters showing operational improvement.

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.

Snap Inc.

Snapchat — the core messaging and social media app with 850+ million monthly active users, known for disappearing messages, Stories, and the Snap Map. Snap Lenses & Filters — augmented reality effects that overlay digital content on the real world through the camera.

Over 3.5 billion Lenses have been created by the community. Stories — Snapchat invented the Stories format in 2013 (24-hour disappearing photo/video collections).

Every major social platform copied it. Snap Map — a real-time map showing friends' locations and local events.

Used by hundreds of millions and particularly popular with Gen Z. Spotlight — Snap's TikTok competitor: a feed of short-form vertical videos from the community, with creators earning a share of revenue.

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.

Snap Inc.

Benchmark led the Series A — one of the most legendary early-stage investments in tech history. Lightspeed Venture Partners invested early.

Tencent bought a 12% stake, giving Snap a strategic investor from the world's largest gaming company. Alibaba, General Atlantic, and Fidelity participated in later rounds.

The March 2017 IPO raised $3.4 billion at a $24 billion valuation — Spiegel was 26 years old.

Klarna

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