# SaaS is Dead: Why Systems of Record Will Die in an Agentic World

What Revenue Multiple Will Software Companies Trade At? · From 7,000 to 3,000: We Need Less People Than Ever with Sebastian Siemiatkowski

20VC · Feb 16, 2026 · 88 min · 19,204 words
Speakers: Sebastian Siemiatkowski, Harry Stebbings
Source: https://www.996.fm/episodes/20vc--ep-585ee695/

## Cold open

**Sebastian Siemiatkowski** [0:00]:

We used to be 6,000 or over 7,000 people, and we're now less than 3,000. And I didn't ask for a single dime to do all this. And the reason for that is because I've seen the acceleration of AI, and I know we can ship all these things on the existing organization. We've gone from 7,000 people, We're now below 3,000. We've shrank 50%. This is what I signed up for. It is stressful. It was hard as hell, but this is what I wanted. The next thing that's gonna hit everyone bad is the switching costs of data.

**Harry Stebbings** [0:30]:

This is 20 VC

## Intro

**Harry Stebbings** [0:31]:

with me, Harry Stebbings. Now we have an incredible episode today. Sebb from Klarna is probably one of the leading figures in how to implement and use AI effectively to shrink headcount and make your business way more efficient. This was one of the most wide ranging conversations we've had. Sebb was just awesome in the studio. It's a fucking great show. I loved doing it. He was incredible. Let me know what you think. Harry@20vc.com. I want this to be the best podcast that you listen to every week. But before we dive into the show today,

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## Conversation

**Harry Stebbings** [4:21]:

Sebastian, it is so good to have you in the studio, dude. We've done this before, but to have you here in person is fantastic. So thank you for joining me. I am so happy to be here. This is gonna be a lot of fun. Dude, this is gonna be great. So this is also gonna be the best show you've ever done. You've done a lot of shows. I'm telling you already. Dude, where the fuck is value in a world of Anthropic and Claude Code wiping billions of dollars off a stock market? How should I think about that?

**Sebastian Siemiatkowski** [4:48]:

You should think that cost of creating software is going down to zero, And that means that everyone will be able to generate software at any point in time. So it is a massive change. And I was 100% convicted about this already when I saw this one or two years ago, so that's been very, very clear

**Harry Stebbings** [5:04]:

to me. If the cost of software creation is going down, how do we determine which businesses have sustaining value versus which do not? So the

**Sebastian Siemiatkowski** [5:13]:

key thing right now is so far, the only thing that's gone down to or not to zero yet, but become extremely much cheaper is the generation of software. The next thing that's going to hit everyone bad is the switching costs of data. Because so far what you're seeing is you have proprietary data stuck in, for example, the CRM vendor or the, you know, other software as a service that you're using currently. So you may replicate and build the same dashboard or build the same processes in your own tool, but all your data is in there according to their data model, according to their setup. What's gonna happen is people are gonna start solving that problem. How do I get all of my data from the existing vendor and move it to the new vendor with the help of AI through one click? That brings down switching costs, and that's when

**Harry Stebbings** [6:00]:

the real threat to SaaS comes. So we had a niche from Andreessen on the show, one of their GPs, and he said agents in particular will dramatically reduce the friction of switching. Yes. Is that the method of which you're talking about which will allow for this migration to happen? Exactly. That's exactly what's going to it's going to happen. It's happening already. If that is the case, should ERPs and ServiceNow's and sales forces not be dramatically threatened?

**Sebastian Siemiatkowski** [6:25]:

I think the stock market woke up to that in the last few weeks, right? It's not like any business is going to disappear overnight because people tend to stick, they have used these things for a long period of time, they like them, etcetera. The question is at what multiples should they trade? And if you look at historically, could trade at a price to sales. I'm not going to talk price to earnings because some of them aren't profitable, so it's not an easy way to compare. But if you do price to sales, they've been trading at twenty, thirty, and now they're down at five, ten. But if you look at utilities, normal companies that are more utility, they may trade at one to two. So from that perspective, you would argue there is still some unfortunate potential to go down even further. Look at Chegg in The US, right? They're now trading at 0.2. ChatGPT was seen as basically wiping up their business a few years, and now they're trading at a depressed value. And now the revenue is also coming down, actually 34 percent last time I checked. Is that gonna happen? I don't think so. That's probably too extreme. 0.2 would be very extreme for some of these companies, but is it likely they could come down to one or two? Yes. I think so.

**Harry Stebbings** [7:26]:

My question, she would say, there's this kind of consensus from all investors, which is always a worrying thing, that if you think that we're really gonna vibe with a lot of these tools internally, you've never worked in a big organization. The permissions, the hierarchy that ensues with the implementation of these tools, we are not gonna see large companies vibe code mission critical systems, and they will keep the largest systems of record. How do you think about that when David Vzatk says that?

**Sebastian Siemiatkowski** [7:52]:

No, I understand that some people have that opinion. I am not. Because I think one thing is also, currently, the way AI is set up, and I've already started seeing people doing this differently, but one thing is, right now, AI is allowing us to reinvent the wheel all the time, right? So if you come in and say, I want to write this piece of code, somebody else prompted the same AI, the exact same thing, somewhere else. We're still using tons of server power to generate the exact same code. What people are going to start realizing, why? Why don't I cache these things? If I'm getting the same question, if I'm getting the same or why don't I use existing open source components and reuse software? Like, what if software becomes more like LEGO pieces that you put together that perfect? It's gonna be more and more efficient to just, like, bundle things together. And this also means that things like what you're talking about is, like, production ready, you know, security assured, and all these things, they will become almost standardized building blocks. And I'm I think in the future, I'm not sure AI was even gonna code that much. It's It's just gonna pick some pieces together and stitch them together to come to what you really need, which also actually means less need for compute.

**Harry Stebbings** [8:56]:

The other argument is enterprise software spends about eight to 12% of company budgets. And you look at that and you go, well, hang on a minute. Our core business is x. Mhmm. Why the fuck are we building a Monday replica or a, you name it, replica? That's not our core business. Why spend the internal resources on it? How do you justify that? I I think that's to

**Sebastian Siemiatkowski** [9:17]:

some degree correct. But, like, funny, the same weekend that this whole Claude Bot thing exploded on x, I was actually sitting myself and playing around with a project, which I was just calling Company in a Box. And the idea was just I just wanted to test a little bit. And the idea was to do very similar what Klarna but did, but for a small company. And I just put like a small workspace in there was accounting, and in that I put an open source accounting software. And then I put like a CRM, and I put an open source CRM. And then I put a Klarna agent on top of that. And then I told my Claude agent, Hey, can you bookkeep this invoice for me? Or, Hey, can you set up this customer account for me? On top of that software, right? And it worked really, really nice. I just wanted to test the idea. Because the point is that, and that's actually where it's also, I see the risks of even more jobs being threatened. Because to some degree, if I'm a small company today, then I may have an accountant firm that's helping me with accounting, and those are the ones I would email, like, Hey, can you fix this invoice? Or How much money do I have on my cash? You know, What's the current P and L look like? Etcetera. But now I have Claude as an accountant on top of the accounting open source software, and then I'm just asking, hey, bookkeep this invoice or check me my balance, and it works really, really well. So I think I'm not saying I don't think the plumbing firm, the electrician of the future will code Vibeco this themselves. Definitely not. They will buy off the shelf products for this. But the thing is, the question is, most of our ERP systems that we see today or software as a service, because coding was so difficult and hard, are still fairly siloed. They are not broad in their spectra of what they cover. And the kind of winner of the future is much more likely to be extremely broad. They're kind of coming with a clawed bot a clawed bot of companies. Like those services, that's how I think the future of that kind of things is. It's different for a company like Klarna because in our case, to some degree, this is the operating system of the company. And what we realized when we looked at SaaS and all of these things already two years ago, which is why we started closing down SaaS, for us was because we need to provide our AI the best context. We need to provide as good context as possible to be able to perform a job. And if your data is separated in these silos, a little bit in this SaaS, a little bit in that SaaS, a little bit here, here's all the project management stuff, here's all the product definitions, here is the accounting stuff, here is this, here is that, It's just harder to provide the appropriate context, right? So to us, was like, no, we need to reimagine the tech stack with AI first, being AI native, and incorporate AI and deterministic and probabilistic code into one tech stack that becomes the operating system of the bank. And I think that that's like the future of larger enterprise. And that's why to us, we're very mindful. Like, we do still use some SaaS for sure. Like, use Slack as an example today, like, is a Salesforce company, right? So that happens You should use slash work. It's one of ours. It's a Oh, Yeah. I'm happy to see. I'm so much better. Yeah. Yeah. Yeah. Happy to try it. We incubated it. Yeah. So you see what I mean? So it's just like for a large company, think that, like, it's obviously, not everyone needs to reinvent everything. I don't think the plumbing firm will reinvent it. I don't think they're gonna wipe code. That's not the point. I think they will buy something like looks like Klarbott or company

**Harry Stebbings** [12:22]:

in a box kind of thing. Totally get you. It's the idea of kind of the compound startup and the benefits that come from not having to integrate with 50 different providers. So totally get that. Do agents not just make that easy, though? Do agents not just make the data migration between different tools from third party providers way easier? And actually, we'll be looking at this going, it was a ridiculous idea to ever think that we needed to own every part of every element. Yep. That's exactly you're exactly right. That's what's gonna happen. But if that's the case Mhmm. Why do you need to vibe code it all yourself and build it all yourself if you're gonna have agents that are able to move data between different products much more easily? It depends on what kind of company you are.

**Sebastian Siemiatkowski** [12:57]:

As I said, like, if you are plumbing company, maybe Claude will offer a solution for all of this an Anthropic, or maybe there will be somebody else who kind of uses Claude and empowers this kind of company in a box experience. That, I think, is still the kind of unknown answer. We don't know what's gonna happen.

**Harry Stebbings** [13:13]:

Custom support is one I just cannot get as a category because there have been 14 players funded with over a 100,000,000 in the last fifteen months, and then you have all the existing incumbents. And then I speak to Ariel and Ivan, Jack at Air, Wallachs, and they're building their own. Are you building your own custom you are.

**Sebastian Siemiatkowski** [13:29]:

I mean, we were one of the early ones, right? So this is actually one of the things we were surprised, but I think I announced already in '23 that our AI customer service had done the equivalent of 600 agents jobs, and it caught a lot of attention at that point in time. Now, media always tends to simplify these stories a little bit. The truth was that at that point in time, our customer service was doing very simple questions. It was like, Hey, did I pay Klarna? Yes, you did. Okay, thank you. So obviously, that wasn't that hard to do. But it's still like, mean, some degree, large company like ours, what do we do? We try to improve our product. Partially, try to do that for fewer people to contact us and ask, hey, it isn't working or I don't understand what I'm supposed to do. Right? I mean, part of it is you just want your product to be so good that people don't feel they have to do that. Sure. So we've always tried to reduce customer service calls, right? The only, to me, shocking experience back then was that we'd roll this thing out. We've rolled a lot of product improvements out. I've never rolled a product improvement out that instantaneously took away 600, you know, the equivalent of 600 agents worth of work. Now, because we don't hire these people ourselves, they work for customer service companies, they just shifted and started working on over. So fortunately, in that situation, nobody lost their job, but it was still like an eye opener for us, like, wow. And then the point is, what you realize when you're early on that journey is, again, for customer service agents, whether it's AI or humans for that sake, for them to be able to answer questions really well, they need as much context as possible. Where is that context? It's in the source code of your software. How does Klarna calculate interest? Well, we can have a a documentation of that, but the truth is in our source code, is somewhere deep in our source code where that interest calculation is actually explained, right? And documentation may be inaccurate. So what you realize when you pursue this is that, like, customer service isn't just like, hey, I need an agent that answers questions. Sooner or later, you wanted to read the source code and explain to the customer how it works. You want them to provide as much context as possible to be able to give the right answers. And that's when you start realizing that it's not something you in our case, at least we come to the conclusion we cannot buy it off the shelf because it actually becomes part of our tech stack. Will every large technology first company build their own customer support system? I'm not sure. I think there will be no, I think, obviously, I believe that for Klarna, the right thing was to be early to try to find what we can do with this technology and where it can bring us. And I think it's going to be a competitive advantage over time to incumbents that haven't done that. But a lot of incumbents will obviously procure fantastic AI customer service solutions in order to try to reduce the gap between what we're doing and they're doing. So, you know, who knows? We'll see what happens. But in our case, it was very evident that we needed to do this ourselves.

**Harry Stebbings** [16:12]:

When you said this, it was a brilliant headline. It was like, seven planners, replace 700. Yeah. And it was a big for all. And my question to you was, do you think that did more to harm or to help you? Because for me as a marketer, I actually thought it helped you because it put you in a AI first CEO camp that very few public company CEOs are in. Yes. But it's a good,

**Sebastian Siemiatkowski** [16:35]:

very valid question. And one of the things we also realized is that as a Polish person, I think when things are about to change, I look at them very cynically. Right? Like, I'm just like, okay, this is what's happening. I'm not that kind of person that's, like, gonna try to gloom things over. I'm like, okay, this is happening. It's gonna be a big change to the world. How do I adopt? What do we do the best out of it? And I'm sure there's gonna come a lot of positive things and a lot of negative things. In this case also, when we announced this, we obviously had some people being very frustrated with us. Like, oh, you know, you're you're laying people off because of AI. People were angry to some degree as well. Yeah. And I I respect that. I understand why. Right? And that's why a few months later, we tried also to go out and say a different story. You walked it back? Yeah. We don't think so. I think Bloomberg changed kind of the headline, and then that got misinterpreted. But what we were trying to say a little bit later on is that, like, to me, as we explore this further, we were like, well, but to be honest, if AI can do customer service, it means it's going be the cheap customer service. It's going to be the one that everyone gets because it's cheap and simple. But as has always happened historically, like when people started in factories making cheap clothing or cheap furniture, we started appreciating artisan things. We started appreciating an artisan coffee shop and artisan furniture that was done by artisans. So we said the future of VIP experience will be the human connection, the relationship. And that we genuinely believe. So we said we need to transform our customer service from thinking about it as like, okay, yes, it's officially just like good customer service, but to some degree, when I kind of challenge it internally, I said, look, what I've seen has happened is also too much focus on cost. There's been too much focus on that. We have to rethink this and make customer service into this human part of what Klarna is and make sure that we offer everyone who wants a human connection. That's gonna be what VIP service looks like in the future, like, oh, I am not dealing only with machines. I'm dealing with a human. You know, that's what we think at least. So that's the message we try to get out.

**Harry Stebbings** [18:28]:

I completely get you, Seth, but I am sorry, dude, for being so blunt. Yeah. That sounds a bit Silicon Valley idealistic. Yeah. I mean What I mean by that is I most people are not actually as good as we think they can be. Often customer support is roles where you're in there for a year or two and you move on. Yeah. And what you need is, Sebb, I know that you have, you know, x number of kids and you often like to travel here. Yeah. I thought about these three restaurants for your romantic Valentine's Day trip with your wife. Yeah. That's a really thoughtful agent or person. Yeah. The trouble is most people are not that, and it takes training and development to get there. The low skilled labor, ala that, ala social media marketing, content creation that's low level, is gonna be eroded faster than ever before. No?

**Sebastian Siemiatkowski** [19:08]:

But you're right, and that's exactly why we started changing. So one thing that we've done that has worked fantastic for us, and we're rolling this out, we started saying, okay, to your point, if we looked at, like, these agents that we were hiring previously, even through other companies, we didn't really have a relationship with them. We don't know who these people were. Like, some of them were great, but it was like, to your point, a mix, right? And we said, how do we create something very different? And so what we started since then, which has worked amazingly well, and we're kind of just starting to ramp it up, is we actually built like our own Uber model, which means that we encourage today, we recruit our own customers, the most passionate customers that live in rural areas and so forth. And we say, hey, do you wanna work extra? Or do you wanna work part time in our customer service? And they actually just like somebody can go and drive an Uber for a while, they can actually jump on and work for Klarna's customer service. And these are our most passionate customer. They love our products. They love how it works. They know Klarna in and out. And now they were earn extra money by actually working on our customer service. And obviously, the NPS and the customer satisfaction of those interactions with our customers is through the roof. So we to your point, we need to change not and that was what we were trying, but it's, like, very hard in the Bloomberg article. Like, I'm not gonna blame the journalists. Like, I think actually if you read the article, the original article, it's actually fairly balanced, and it kind tries to describe this, but then the headline is like, the rolling AI back. Know? And then the whole media circus go on. So it's like, oh, Klarna has just announced that they're rolling it back. It's like, no. That's not at all.

**Harry Stebbings** [20:30]:

Well, the truth is no one reads the article anymore. Exactly. Read the headline. Yeah. Exactly. CEO of Bricks and the Finance. Yeah. I was just

**Sebastian Siemiatkowski** [20:35]:

laughing with Dan because, like, yesterday on x, somebody wrote, like, Klarna like Klarna like company is gonna offer buy now pay later on rent. It was Klarna like. So was actually another company, but people didn't see that. They just say Klarna is gonna offer buy now pay later on rent. And then suddenly, we're all over the press. People are calling us like I'm just like, what are we gonna do?

**Harry Stebbings** [20:53]:

Like, it's just not true. I remember when I was called in an article, former teenager. Yeah. I was like, I think this is a broad spectrum of people right now. Former teenager. Me and Warren Buffett both have that in common, but I'll I'll take it. I sat down with the team the other day. Our job is to find value and invest in amazing companies. I was like, if they sell per seat, we're not doing it. We need to replace jobs. Labor displacement is what we're investing into. That's the only way that we can actually return the amount of money that we need to now to make funds worth it. Do you think that's fair?

**Sebastian Siemiatkowski** [21:23]:

Unfortunately, I think that is going to happen. And I feel like Dario is one of few that actually is willing to stick up and say that officially. I feel a lot of the other executives of these big companies are getting nervous. They're seeing the negative backlash of talking about this, and then they're trying to portray something different. Yeah. But I don't wanna be one of them. I'm more in Dario's camp. I wanna be honest about the fact that I do think there's gonna be a very big shift. Now, in addition to that, then I think more like Elon that it might lead to a golden age of humanity where AI does more jobs and more people can enjoy themselves and do other things, that we can have a richer society. That is not an unthinkable outcome. It could be a positive outcome. It could happen, and I think it's not unlikely that it could happen. So I still am an optimist at heart, but I also wanna be realist around what's going to happen in the shorter term, and it's gonna be a lot of turmoil in this.

**Harry Stebbings** [22:15]:

When you said the statement about replacing 700 customer service agents at Klarna, what did you not know then that you wish you had known, knowing all that you know now? Nothing. You haven't had anything that you've seen that has changed your mind?

**Sebastian Siemiatkowski** [22:28]:

You you know what, Harry? Like, in 2015, I sat down with my management team. At that point of time, we had been trying to compete with Stripe and Adyen for five years. And we were, like, losing it. Like, they were just, you know, crushing us. We were like, this is it. And Adyen had just signed with Daniel x Spotify, my neighbor. And I was like, this is over, man. Like, we're not gonna win in this checkout wars, like, payments wars. Forget it. So we're like, what are we gonna do as a company? What what what are we gonna do? And then we sat down as a team and we're like, what's the future of banking? We said, the future of banking is gonna be some kind of digital financial assistant, wakes you up in the morning, say, I checked your mortgage. You're overpaying like hell, and I have renegotiated for you, and I can do all the paperwork. You just need to say yes to save £50. Right? And, like, that's the future of retail banking. And that we said in 2015, okay, so what does that mean for Klarna? We're like, hey, let's become your digital financial assistant. Let's be that assistant that saves you that time and money. And ever since that, it's been like where we're going. So all these things now, obviously, I didn't predict ChatGPT. I didn't predict all this stuff happening, but that to me, that we're gonna become a digital financial assistant and we need the kind of technology AI is to accomplish that, was crystal clear for me for the last ten years. And I've just been running down that path continuously. And to me, it's like self driving cars. We all know it's gonna happen. And at first, there was a huge hype, and every day we're reading the paper like, oh my god. It's happening tomorrow. Tomorrow, everyone's investing, it's crazy. And then the hype dies away. But, like, I was always saying people are asking me, like, what do think about stuff? I was like, look. It's gonna happen. My daughter is not gonna get a driver's license.

**Harry Stebbings** [23:58]:

Do you think you're best positioned to do that? Like, if you look at, like, the entry point and where you sit in the stack, are Revolut not in a more strategic better position to be that digital financial assistant than you?

**Sebastian Siemiatkowski** [24:08]:

That's it. I

**Harry Stebbings** [24:08]:

mean, I love Revolut.

**Sebastian Siemiatkowski** [24:10]:

I think Nik is a fantastic guy. I think he's an amazing company. Nik is the greatest CEO I've ever interviewed. I'm also

**Harry Stebbings** [24:14]:

terrified he's gonna kill me.

**Sebastian Siemiatkowski** [24:17]:

I love Nik. He's amazing. I've always felt very competitive with Nik. And, you know, and I think he feels competitive with me. We have a common friend who we talk to a lot about these things, which is funny. But the point is that if you look at it, Klarna has 110,000,000 customers worldwide. Revolut now has 65. I'm twice the size in number of customers, but the engagement that I have is not as high yet as it is with Revolut. So people may use us less frequently and for other things, right? So what I'm doing right now, what we're doing at Klarna, is moving from being kind of your infrequent payments solution to being your high engagement banking provider. Right? That transition is going extremely well. It's going extremely well and it's accelerating. People are adopting our banking services at a very rapid pace.

**Harry Stebbings** [24:59]:

Do you look at Robinhood? I've had Vlad on the show multiple times, and I think Vlad is astonishing. He's got 11 lines of business that produce over a 100,000,000 in revenue. I think it's an incredible model for moving from entry product, be it BNPL or for him, you know, kind of frequency trading into the full stop banking provider. Do you look at him and do you take lessons from that?

**Sebastian Siemiatkowski** [25:19]:

Yeah, absolutely. But we all have different entry points. I mean, Revolut to some degree was like an early, like, hey, I'm an expat. I travel a lot in Europe, and, like, this is better for my currency, or I trade in crypto. That was kind of the early adopter thing. I think, you know, Robinhood was like, I'm trading, I love trading. Klarna is very different. Like, our customers, like, I shop online, I do shopping, you know, we skew more female than male. We have a very different brand. I would think of us more like a lifestyle brand, like a digital version of American Express. That's how I think about Klarna. So I think all of these growing fintechs, know, know David from Nubank since early days, right? Like, I have a funny story where I was down in Brazil meeting David when he was just leaving Sequoia starting, and, you know, we had a fantastic conversation. We talked about the future of banking. And then he sends me an email, which was like, Hey, Sebastian, would you like to, like, advise me a little bit? I'm starting this new company. And I was like, I'm sorry. I don't have the time. So I lost out on a lot of I would have been a great angel investor there. But that's how life goes. Yeah. You know, that's how life goes. So anyway, David, I'm gonna

**Harry Stebbings** [26:22]:

be honest. I'm not crying for you. No. Okay. Okay. Okay. Yeah.

**Sebastian Siemiatkowski** [26:24]:

I don't think anyone will cry for me over that. I will cry over myself. That's okay. I can I can I can fall asleep crying over that? But the funny thing is that, like so you have these fintechs now who are actually starting to become really big. I mean, Revolut is really big. Klarna is really big. Nubank, you know, etcetera. So but we're all coming from slightly different angles. We're just all coming from slightly different. And now the people who are going to be threatened by this is incumbents primarily. Like, of course, I'm gonna partly compete with Revolut. I'm partly doing that already. But if you look at, like, they're very big in Romania. Romania is not a big market for me. Right? Like, I think they're the second largest market or something for Revolut if I look at, like, number of users. Like, Romania is not a big market for me. You know, I'm very big in other markets. So, like so that's gonna differ. Right? But whose market share are we eating? Barclays, Wells Fargo, Capital One. Those are the companies that we are going after. Right? So I don't really see there's a big conflict between us. It's more the incumbents that are going to lose customers.

**Harry Stebbings** [27:16]:

You spoke about Nubank and and David. I love David. He's amazing. Fucking legend. Legend. But, anyway, obviously, you just got a banking license in The US, and they're very much aggressively planning The US. Is The US the main goal for you? Yes. So going back now is okay. Sitting in London. Just like, I feel so special

**Sebastian Siemiatkowski** [27:33]:

in you.

**Harry Stebbings** [27:33]:

No.

**Sebastian Siemiatkowski** [27:34]:

But listen. It's like this. It comes back to what I said. In '15, we're, like, the future financial services is going to be this digital financial system. Okay? So then the next question is, who is gonna participate in that challenge, and why would Klarna stand the chance? Because those are the two questions we need to answer. Right? And we say, well, first and foremost, there's gonna be three types of company participating. The tech companies, Google, Amazon, Apple. There's gonna be fintech, Revolut, and so we didn't know. I mean, that's why the Revolut hadn't even started, but we knew they were gonna become entrants. And then banks. Right? That was kind of our our view. Okay. So, like, what's gonna be critical for us to win in that big transformation? Global. We realize first, if we're just big at that point of time, we weren't even in The UK yet. But, like, if we're only in The Nordics and Germany, we're not gonna have the scale to be able to win this big transformation that's coming. So we need to be global, and global means US. Like, if you're not in The US, if you're not big there, you're just not gonna be big enough, and the risk is you're gonna get acquired by somebody in The US. Mhmm. So to us, like, nailing US was, like, super high priority. Super high priority. Second, we realized that data. The more I understand about you as a customer, the more likely I am to give you that advice that you said, hey, you know, you should pick up the flowers when you go there or whatever. So the key thing we saw is different than Revolut and all the others. We have our own payments network. Just like Amex, we have our own rails. Every time you shop with Klarna, the information that flows on the rails isn't just the amount that you purchase for, it's the exact products. We have the full digital receipt. So we know you shopped at Sephora, but also what cosmetics you bought at Sephora. And the benefit of that is if I'm then supposed to advise you on your purchases or your day to day finances, I just have much more richer information that allows me to provide you good advice. Oh, these contact lenses were really expensive. You can get them cheaper, etcetera. Right? So if I wanna help people in their everyday spending, I have more information. So we said understanding the customer depth is very, very critical, and data was gonna be very, very important. And so it was being global and having a good understanding of our customer and having a lot of trust and brand. The other thing was brand. Build a brand that people relate to, that people feel emotionally connected to and not just like an utility. Right? Create something

**Harry Stebbings** [29:40]:

I'm sorry. I struggle. And, you know, I'm a proud European. I struggle when I look at the European neobanks and I look at Chime and I look at Dave and I look at all the other current I mean, they're all a fart compared to the market cap of Revolut right now or whatever the private latest valuation with market cap is a very different thing as you know as a public company CEO. Like, why if The US is such a focus? Has it been such a lackluster performance from their domestic participants?

**Sebastian Siemiatkowski** [30:04]:

Well, partially because competition is better. If you take your Amex app in The US and compare it to one here, it is significantly better there. Right? Your JPMorgan app is significantly better. So the financial institutions in The US are just better. And the problem is that then people try to find an entry point that is probably, for example, very big lending, and then they walk into a lot of subprime and they make huge losses, there are other things, right? So people struggle to find that entry point. But we have 30,000,000 users in The US, right? Almost like, I think it's 28 or something. So the BTSU is gonna be 30. Our card is growing at a very rapid pace in The US. So your core focus is can I turn those 30,000,000 users from BNPL into core customer account? Yes. And we launched a card in The US, and I have to be careful now because we haven't released the new earnings yet coming next week. So I have to use the Q3 numbers. But if I remember correctly, we're like a two, three million active cardholders in just a few months in The US. So we are transitioning these buy now pay data customers into full banking relationship customers at a very, very high pace.

**Harry Stebbings** [31:06]:

Totally. Yeah. When you look at Nubank and Revolut moving both aggressively into The US, if you were to put money on who's gonna do better, who would do better? That's a good question. I think I

**Sebastian Siemiatkowski** [31:17]:

have to go with David.

**Harry Stebbings** [31:18]:

Wow. Why?

**Sebastian Siemiatkowski** [31:19]:

Because I think Nick's challenge right now might be that he is so distributed. I mean, he's trying to go for the whole world. Right? I mean, he's launching in Dubai. He's launching in India. He's launching everywhere. Banking is not your standard tech company. It's difficult. And so I just wonder if he's, like, running out of bandwidth. Right? Like, I think it's more risky. David, at least, has slightly more focus. He has a very solid base in Brazil, making a lot of money from there. He has his Mexican thing and the other thing that are growing pretty good. But if he then does US, that's just like one more big market. It's very different. Nick is so thinly spread right now.

**Harry Stebbings** [31:54]:

Question for you, which is you mentioned Stripe earlier and the competition there. You're a public company CEO now. I think you're go there and you can do a no comment. I have so many public companies here. I've never met a happy one. Never. Are you happy as a public company CEO? Happy is a strong word.

**Sebastian Siemiatkowski** [32:11]:

No. But I think I mean, look, to us, it's like we have, over the years, so many shareholders, so many employees. At some point of time, it's actually easier to be public for us. We were already reporting on an earnings on a quarterly basis. We're a bank. So I'm not sure that the difference is that big, to be honest, from our perspective. So it is what it is. But, like, yeah, of course, if I could own the company 100% and be private, I would prefer it. Right? But that's not reality.

**Harry Stebbings** [32:37]:

Do John and Patrick with Stripe have advantages that you don't have as private companies in their ability to invest in long term, invest in R and D, not think about next quarter quite so religiously? Historically, yes.

**Sebastian Siemiatkowski** [32:52]:

But this has changed due to AI. One of the things I remember vividly is that when we came to the board and said that, like, the same plan that I said from '15, right? Grow global, get customers across the board in all countries, and then once you have the love and affection of these customers and the relationship with them for day to day purchases, then go deeper with them, offer them more banking like services, and increase the revenue per customer, right? So we had this interesting board meeting where we're like, Okay, now it's really going to happen, guys. We are now going to truly start focusing on this transition from just like single payments customer to banking. And we're going to launch peer to peer, and we're going to launch, potentially, which has also leaked to the press already, trading, and we're going to do a lot of the other banking services that we at that point in time didn't have. And we're gonna, you know, increase the card, and we're gonna increase balances and deposits, and we're gonna do international remittances and all these things. And then the board looks at this like, yeah, you know, these kind of transitions can be hard. It changes what the bank is. We have this discussion. For an additive thought. Thank you, Bolt. Yeah.

**Harry Stebbings** [33:57]:

This

**Sebastian Siemiatkowski** [33:57]:

can be hard, but no shit. Yeah. Exactly. But but the funny thing, I went out and I was like, why was that so easy? Like, I was like, how come that went so easy still? Like, it makes it, oh, yeah. Now I know why. Because usually, when a CEO come to the board and say, we're gonna do all of these new services, we're gonna launch all of this new stuff. Hence, I need to increase my investments and my cost by a $100,000,000, if it's the size of our company, to be able to do all of this. But I, at the same point of time, was showing them a budget. I mean, Klarna has been shrinking. We used to be 6,000 or over 7,000 people, and we're now less than 3,000. And I didn't ask for a single dime to do all this. And the reason for that is because I've seen the acceleration of AI, and I know we can ship all these things on the existing organization. We've gone from 7,000 people, we're now below 3,000. We've shrank 50%. And the majority of that is just through normal attrition. Initially, when we had twenty twenty, we did a little bit of layoffs, but that was not that big of a number compared to what has happened since then. So that was the reason. There was a reason it was easy for the board to take decisions. I didn't ask for a single dime in investments. Is twenty thirty How many employees do you have then? Less, for sure.

**Harry Stebbings** [35:07]:

2,000?

**Sebastian Siemiatkowski** [35:08]:

No. I think it it may very well be even less than that.

**Harry Stebbings** [35:11]:

No.

**Sebastian Siemiatkowski** [35:11]:

Yes. But listen, again, relationship cannot be replaced. One of the show in 2035,

**Harry Stebbings** [35:17]:

and that's gonna be the issue.

**Sebastian Siemiatkowski** [35:19]:

Yep. I think that the one thing that's important for us is relationships. We have relationship with merchants as an example, retailers, and we have those relationships locally. So I have people in Portland talking to Nike. I have people in China talking to Sheen. I have people in Amsterdam talking to Adyen, etcetera, etcetera. So we have over 50 locations where there's people. AI is not gonna move those jobs. Like, that we need. It's very important, the relationships with our partners. And the same customer service is going be I'm still going argue that it's going be vital to offer a human connection there. So those jobs will remain, but for the rest, it's going to be definitely smaller. So we're shrinking through natural attrition with about 20% per year. It's just people leaving. They stay about five years and then they move on, which is natural. And then what we have said very clearly is that, like, we're not gonna recruit. So we're we're recruiting a little bit. People then came again on X, like, oh, it's not true. Look. They're recruiting. It's like, come on, guys. Yes. Occasionally, we hire somebody here and there. But if you look at the neck, you go to LinkedIn and look at the insights, you're gonna see how the company is shrinking. The point is that we've shrank 50%, but we also promised our employees, which is very important, we said, guys, this is gonna mean we're gonna do much more with much less people. This is gonna make more profit for us, and you're gonna share in that profit. So our employee compensation has grown almost 50% per head during the same time. So we have given a lot of that money back, and that creates safety for employees. They know that, like, through this AI transformation and using these utilities, they are, you know, getting some of the benefit of it.

**Harry Stebbings** [36:44]:

Weird question. How do you think about the current state of SBC, stock based compensation for anyone, which is obviously how we dividend or give stocks to employees? You see aggressive from OpenAI, argument being why does Sam give a shit if he doesn't have any stock anyway? Dilution doesn't matter to him. Evan Spiegel is the the godfather of SBC, astonishingly high amounts. How do you feel about the state of SBC?

**Sebastian Siemiatkowski** [37:06]:

Well, I think it's very clear when we compare American companies to European companies, there's a huge difference. Yeah. I mean, I think that, like, American companies are five to 10x more than European companies do. And Klarna, that perspective, we're a European company. We have come from very low levels. We have increased because we need to stay competitive for talent, and talent today can move between US and EU pretty easily with the help of companies. But I still think also the thing that's gonna happen. There's been these industries. They're called tech and they're called fin, financial services. They have all had this amazing thing, which is that you create this service, and there's a huge switching cost, so your customers can't really switch that easily. And hence, you create this money printing machine, and then life is sweet, right? And then you build these campuses and you play volleyball in your office and you go and get free lunches and, you know, and you live off the spoils of this money printing machine in your basement. And that's not how normal business work. If you're in retail, if you run a restaurant, you freaking wake up every morning and you ask yourself, how do I put the right product in front of the right customer, bring them into my store so that I can actually sell them and make them happy and so forth? You have to wake up every day and do care about that. Right? And so the point is that, like, this is gonna be brutal awakening for Finn and tech. That's what's gonna happen to all of us. Like, we're gonna have to wake up every morning, make sure that we serve our customers, we work really hard and effortlessly to make them happy with what we're offering them, and it's not gonna be what it used to be. And so I think that share based compensation as an example, like, everything that was, was it really because it made sense or to what degree was it just sports? And I think to some degree, it's sports. Right? And some degree, it's relevant, like, because some people can make a huge difference. But

**Harry Stebbings** [38:50]:

there's a balance between the two. There is an incredible number of incredible CEOs attacking the incumbent banks. What happens to BNP ING 2035?

**Sebastian Siemiatkowski** [39:02]:

I think so that again comes back to what we talked in '15. Our conclusion was there's gonna be different. So what I thought was interesting, Solomon also recognized this at Goldman Sachs, he created Marcus. And then talking about public companies, the challenge was that when fintech was like, everything was high 2021, you know, valuation's up, Marcus is the best thing that Goldman ever did. And then suddenly what ends up happening is, you know, Marcus' turn, and it's very hard for Solomon to defend Marcus. But the problem is, like, Marcus would have needed five, ten years to fully mature. And when you're a public company, that's hard to defend. I don't know. Maybe Solomon doesn't agree, and he's like, I did the right thing and I changed it. But, like, in my opinion, he should have sticked the guns to doing that. Jamie is now doing neobanking, he's going in, but he's going in a bit later now. And so you will see different banks. I think some of them will reinvent themselves, become neobanks, become tech led, use AI to reinvent themselves. Some of them will not, and they will with their way, right? Which is always what's happening in the disruption of an industry. So it will depend on the leadership of those financial institutions.

**Harry Stebbings** [40:08]:

You said about 2021 and high valuations, high prices. I remember the round where you were done at '45. Yeah. By SoftBank. No?

**Sebastian Siemiatkowski** [40:16]:

It's not entirely true. There's also a bit of media, but, like, yes, there was there was some shares bought at 45 as well. Yes. That's right.

**Harry Stebbings** [40:22]:

Knowing what you know now, are you happy you did that, and is there anything you would have done differently? Yeah. That's a good question.

**Sebastian Siemiatkowski** [40:28]:

I think that when you're in that kind of high growth phase, one thing to keep a close eye on is your multiple expansion going faster than what your revenue is growing. If your revenue is growing faster than your multiples, then you're probably fine. But if you start seeing the opposite, where multiples are expanding faster than revenue growth, that may potentially be a problem longer term, right? So I think today maybe that I could have been more careful, specifically on the hiring side, because it was very sad and difficult to me to, like, a few quarters earlier be hiring at a high pace, and then a few quarters later have to announce layoffs. That I felt that I should have predicted and been more cautious about.

**Harry Stebbings** [41:10]:

Mentioned the board meeting earlier where I was like, oh, that was kind of kind of nice and easy with the expansion. You've got an amazing board. Mhmm. And we're not talking about the board in any other capacity. Just talking about, like, a hard board meeting. Does Mike ever get angry, by the way? No. He doesn't? No. Angry is not

**Sebastian Siemiatkowski** [41:23]:

the word for Michael. I would be shit scared if he was No. I mean, it's actually it's less scary because he doesn't get angry. He's, like, disappointed. Disengaged is the worst. Like, the worst thing you don't wanna get with Michael is disengaged. That's, like, the big warning sign. He's never lay on the floor and pretended to sleep. No. He no. But you no. I mean, yeah. He I mean, he's so amazing. I love him so much. I think he's fantastic. But you obviously care a lot to make sure that, like, you wanna see that he's engaged.

**Harry Stebbings** [41:49]:

Can I ask you, what's been your biggest lesson from working with him? Because you're like his

**Sebastian Siemiatkowski** [41:53]:

chosen child in the nicest way. Look. I worked with him so many it's a funny story how we ended up working with him because at that point in time, Sequoia there was a guy called Chris Olsen, which is an amazing fellow friend of mine who was at Sequoia, and he did kind of found Klarna in He did drive. No? Yeah. Exactly. Yeah. And he did the investment. So, you there was just like this story where, like, I'm talking to this guy saying, hey, do you because there was a guy in Stockholm that knew Sequoia a bit. So I was talking to him, hey, do you think that Sequoia could be interested in investing in Klarna? And he's like, no. That would never happen. I was like, okay. Fine. So we just talked to the European funds, which is like, it's not even worth. Right? But I was still looking there in Google Maps. I was looking like Sandy Hill Road, and I was like dreaming, you know, could I have the chance to work with these guys? And then suddenly, my phone is buzzing, And and I'm like, oh, I had a message. I was like, is Chris Olsen from Sequoia. And, you know, I was like, oh my god. I was like, uh-oh. So what I do is like, I know, like, okay, this is like dating. Right? I can't call back in three days. So I have to wait I have to wait three days before I call back. So I'm just sitting there, like, counting the hours. Like, I cannot I don't wanna look too interested. Yeah. Exactly. So was thinking, then I call Chris, and we take a meeting, and they get super excited. And we instantly wanted to work with Sequoia. We were like, they're the best. That's how we saw it. Like, we saw this was gonna be a huge brand uplift for a company. At this point of time, you know, Daniel Leck at Spotify is getting all the tech credibility. Like, all the engineers in Stockholm wants to work with Spotify. Klarna is some boring invoicing company. People are like, what the hell is that? Like so we're like, we need tech. We need tech credibility. Right? So Sequoia is gonna give us that. So, anyways, what happens is little bit later on, Sequoia decides to make the investment. Chris flies to Stockholm, and we had met Michael in a in a hotel breakfast here in London. And then Chris comes, and he makes this beautiful presentation. Right? And the presentation is like, these are the Apple guys in the garage. These are the Google guys in the garage, and these are the Klarna guys in the garage, and you're gonna be the next Google, you know, and we're all sitting there. I was like, oh my god. We're gonna be Google. You know, like, we're just like, we're buying it all. And then I feel afterwards like, this is not good. Like, we have to do something cocky here. We can't just, like, you know, just swallow this and be like, okay, please, can we work together? So when Chris exits the room and he's just about to leave, I say, hey, just one thing. If we are genuinely the next Google, how come you're the only one from the Sequoia partnership that's here in Stockholm today? And then Chris looks at me and says, oh, I'm so sorry. The other guys couldn't make it. You know, whatever. You have to remember, they invested they took a 25 percent stake at a $100,000,000 valuation. Right?

**Harry Stebbings** [44:14]:

They took a 25% stake?

**Sebastian Siemiatkowski** [44:15]:

Yeah. At a $100,000,000 valuation. That was the deal they eventually did that. Oh my god. So Chris is like, I'm so sorry. We couldn't I couldn't make it. And he goes into the elevator. And literally, twenty seconds later, this is so impressive. Twenty seconds later, my phone starts butting and it's Michael Moritz. And Michael Moritz is like, hey, I'm so sorry. I couldn't make the meeting. And if we get to do this investment, I'll join the board. So thanks to me saying that and being a little bit cocky and not being so freaking Swedish, we actually got Mike on the board. And then since then, I've worked with Mike and gotten to know him. The thing people don't understand with Mike is that, like, Mike has this you know, I always think that if for you to be really good, for you to really understand the topic, you need to be in every freaking detail. You need to read up a lot. And and he does, but the point is it's almost like sometimes I feel like he can just take this huge mass of information and he can, like, without a second of thought, he's just, that is important. And he just gets that at a at a level I I other people I interact with, he's just brilliant at that. It's just amazing. He can like he called me in 2019, in summer. I don't know why he called me, but he was like and this was when we were we had been in The US for a few years. We weren't getting any traction. The business wasn't doing. And then Nick another Nick from Afterpay in Australia was starting to get, you know, traction in in The US with buy now pay later. And Michael just calls me out of the blue and just like, Sebastian, I think it's now or never. If we don't do US now, we're never gonna do it. And I just like, I don't know how the hell he knew that, but he was, like, so spot on. It was exactly the thing. And I just dropped everything, and I was just like, we have to win The US. And then I just spent, you know, the next two years focusing a 100% on that. Do Sequoia move the needle for a company? In my opinion, they do. Yeah. I mean, I think that I've been very impressed with all the people I work with there. I think it's amazing. And there's a new generation now with Sonya and Andrew and and the new guys coming. So, like, it's really cool. Pat and Alfred. Yeah.

**Harry Stebbings** [46:05]:

I think they're amazing. When you talk about the expansion of products, you've said obviously about kind of Afterpay and BNPL. God, I'm gonna get in trouble for this. I'm pleased to hear about the movement away from just pure BNPL because is that not just evidence that for all the people that said landing's a shitty business to be in, they were right? Landing? What does that mean? Well, like, BNPL is a shitty business. Why would it be a shitty business? Oh, it's really hard to build, like, a $2,030,000,000,000 dollar business on BNPL. Consumer landing is a hard business to make a of Yeah. Okay. Yeah. When I get a startup pitch me consumer landing, I'm like, sorry. Look. You're like, wow. He's on a steez, dude.

**Sebastian Siemiatkowski** [46:42]:

Yeah. Think the way I thought about this is, like, when we started Klarna twenty years back, we were just like, okay. Look. Why are we not just making these banking products better working online? Because you gotta remember in o five, the bank's Internet offering were shit. Dude, in 2026, that's all shit. Yeah. Exactly. So it's just like, they're all shit. So we were just like, okay. We're gonna take some of the stuff that the banks do, and we're just gonna do it better online. We did that. And then that grew and we were successful. I mean, people don't know this, but we raised $60,000 in our first angel investment. Dollars 30,000 of that was spent, and then we became profitable. And we were running this as a profitable company from 'five to 'nineteen. We had almost ten consecutive years of high growth and profitability that actually got us this reward because we were like only one of two companies in Sweden that ever had such a long streak of high growth and profitability at the same point of time. But what we realized also over time was suddenly, I'm sitting one evening and I'm looking at my P and L, and I'm like, wow, what is that line? Oh, shit. That's late fees. That's a big revenue line. And I was like, that's not gonna be long term sustainable. So at some point of time, started thinking, wow, you know what? We're actually doing lending. What does that mean? What does it mean for consumers? What does it mean for their financial life? What's the implications of this? And at that point of time, I thought, well, there's two things I can do here. Right? I can either sell this business and say, oh, shit. We're We're making a little bit too much on interest and and late fees. Let's go and do something else. Or I can try to change this. And one of my co founders left at that point of time. Right? But I said, no. I'm gonna stay, and I'm gonna make the change. And I realized that the buy now pay later credit offering is a healthier one than your credit card. Like, on your credit card, you put all your spending full month on that, and then the bank tries to push you to revolve. You build up a balance of a few thousand pounds or dollars, and then you pay very high interest. So I was like, but I remember when I worked at Burger King, it used to be like press 1 for debit, press 2 for credit when I would swipe my card. And so, like, where did that go? Well, banks didn't like it because the problem was if you were pressing debit now and then, your bill at the end of the month was much smaller and you were less likely to revolve and borrow money and they would make less money. So they removed the debit button. And I was like, no, no, no. Let's bring that back. Let's make sure Klarna offers press one for debit. 20% of our transactions are debit, and then the rest is credit, but the credit is interest free, fixed installments, no revolving. Revolving, we've removed. It cost us we gave up $100,000,000 of revenue when we removed revolving because we used to do it in The Nordics. We took it away. We even didn't have late fees in The UK for a period of time at all. But it turned out that that wasn't great either because then people to some degree overextending themselves. So it's good to have a little bit of fees, some kind of consequence of not paying on time. We got that back, but you have to be mindful of not making too much money on it. So you just have to find the balance. But over the years, we iterated on a model that we feel like is a better alternative to credit cards. If ten years from now, less people have credit cards, more people have debit cards, and then use buy now pay later occasionally, I would argue it's a better society. Society. And that's what we've been pushing, and the consumers now, we see they love that. They reward us for that. They agree with that. Right? And that doesn't mean you're still in credit. So you're still gonna have, unfortunately, occasionally people who overextend themselves. You have to be mindful about that. You have to how do you help them when they're distressed and so forth. It's a difficult business in that sense. It's a bank. Right? So you have to be mindful about these things. But generally speaking, the type of product we're offering is a better product than the traditional products of the banks.

**Harry Stebbings** [49:58]:

You mentioned starting with Spotify and Klarna in Stockholm together. And, obviously, Stockholm's been the birthplace of great AI companies in the last year with Lagora and Lovable, to name a few. I'm a young 18 year old Stockholm entrepreneur. Sebb, you've got this incredible experience, and you've been to the and, oh, how wonderful. Do I have to be in The US if I want to build a big startup today? No. Do you disagree? No. But every US experienced founder tells them, yes, you do.

**Sebastian Siemiatkowski** [50:28]:

Yeah. I think, I mean, to some degree from a European perspective, it's obviously partially sad to see that a lot of the successful AI and companies in The US where actually the founders are European. 100. All right. It's a bit sad. But that's just how it is. I remember Truecaller, our friends of mine, also a fantastic company, European. I was

**Harry Stebbings** [50:46]:

at Atomic when

**Sebastian Siemiatkowski** [50:47]:

they

**Harry Stebbings** [50:47]:

did that.

**Sebastian Siemiatkowski** [50:48]:

Yeah. Nami and xAI. And they were, like, told by the VCs, the American VCs, like, You have to move your engineering center to Silicon Valley because otherwise, everything's gonna go to shit. And they did. And it was a disaster. And they had it for a year. They tried to recruit, but obviously, nobody in Silicon Valley knew what Truecaller was, and they were already a pretty grown company, so they couldn't, like, attract as a startup in that sense. And they had a hard time recruiting and whatever, and they're just like, why are we doing this? And then they shut it down. They lost a year on that. They lost so much traction. And then some of these VCs were like, oh, you're not doing well, so now we're not gonna put our partner on your board anymore. We put some junior guy on your board because we don't care because you're not our top priority of companies. That's

**Harry Stebbings** [51:28]:

the most savage

**Sebastian Siemiatkowski** [51:28]:

indictment,

**Harry Stebbings** [51:28]:

isn't it? When you get the associate join the board and you're like, oh, fuck. Yeah. Exactly. Relegate it.

**Sebastian Siemiatkowski** [51:32]:

Exactly. So first, they're advising them to do this thing. And then when they actually go and execute it and it turns out to be a disaster, then like, I'm sorry. Your company is not that good. Like, I mean, it's just terrible. Right? It was terrible. Do you think the state of VC is very good today? I think, again, it's changing so fast. I think that the challenge right now is a lot of them are piling money into AI that they don't necessarily fully understand. Like, how good is it? How differentiating is it? Does it have a real moat? Well, what should I know then as one of these VCs piling money into AI? Well, I think what you should be doing is coding with Cursor and building things yourself. If you do that I think you do that, if I remember correctly. Exactly. Lovable. Yeah. You only look Lovable or only have you tried Cursor as well? I've tried Cursor Okay. Good. Yeah. So the point is, like, I just think that, like, if I meet investors today that haven't actually downloaded and tried to build something themselves, I think they don't have the skill set to make an evaluation of the company they're looking at. I think it's so critical to actually just understand how powerful these tools are today before you make those decisions. If you have that insight, if you understand that, and then you make your decisions, fine. Like, there's gonna be opportunities. I think Cursor

**Harry Stebbings** [52:37]:

will lose half of its revenue in 2026. Is that your prediction? Yeah. Why is that? Because Cool Co's just eaten their lunch. I didn't see any engineering team that's still on Cursor. And that's it. Love it, actually. We use it all the time. Really? Yeah. That because you have an enterprise deployment and contracts?

**Sebastian Siemiatkowski** [52:51]:

I don't think so. I don't know why. Like so I kind of switch between Clog I'm a big Entropic fan. I love I love Clog, the chat version of it as well. I use that all the time. I just find that it depends on kind of the tasks. So I'm almost using them as like, I would go into Cursor, would write some things, then I go to Clawed Code, then I'll ask Clawed Code to do some other things. I still feel they have almost distinct personalities and skills. And so I kind of enjoy still and and I need an ID. The problem is also, like, because I wasn't an engineer, I never used, like, Versus Code or any of these tools. I still need an ID today. So, like, Cursor is my standard ID, right, just like as a as a consequence of that. So you could be right, but I'm actually more optimistic about their future than that.

**Harry Stebbings** [53:28]:

You can invest in Anthropic at $3.60 or OpenAI at 500. I'm giving the discount Don't to make it make me answer

**Sebastian Siemiatkowski** [53:34]:

this question, please. Why? I think they're going in very different directions. Think that if you least my experience with OpenAI is that it's becoming a consumer company. And if I'm building AI for, like, a billion people, I'm building AI that I would focus on making sure that, for example, there's gonna be people that are gonna seek AI as a friend, as a friend in their day to day life, as somebody more like from that movie, what's the movie again?

**Harry Stebbings** [54:01]:

The Scott Ehansen one? What?

**Sebastian Siemiatkowski** [54:02]:

Her. Yeah. Her. Exactly. Right? So some people are gonna more look for the her experience. And I think if, you know, that's chat that ChatGPT to me because if I'm and I'm I'm so big. I'm such a big consumer brand. I'm gonna start looking at my KPIs, and I'm gonna optimize for emotional connection for people wanting to, like, you know, how much time are they spending with my product?

**Harry Stebbings** [54:20]:

Is that really gonna be a chat GBT there, or is that gonna be a companion product and there's a 15 provider which is so specialized in hand bundle?

**Sebastian Siemiatkowski** [54:27]:

It could be. But my point is that, like, if I'm just looking at who their audience is today, it's very likely that they will optimise for that relationship aspect of being your counsellor, your provider, your play friend that you're playing with or playing games with or whatever, right? Claude to me is very different. Claude is like my intelligent adviser. And I am trying to push, and I say to Anthropic all the time, like, I don't want an AI that tell me, you're so great, man. Like, I understand that that's like a nice experience, and some people may enjoy that. Like, I I actually enjoy somebody just telling me how awesome I am every day. Personally, I'm not that interested in that part. What I'm interested in is rather somebody's telling me, Sebastian, that's freaking stupid. Like, don't do that. That makes zero sense. Like, I want an AI to tell me you're wrong, man. Like, don't do that. That makes no sense. And I feel currently, it's more likely that Klarna provides me, like, less biased. It's trying less to please me. And I think if you're building a product, OpenAI, the risk is you becoming into the pleasing because I think a lot of people like that. And I would I mean, I understand. If I would use AI for entertainment, then also I wanna be, like, I wanna be entertained, I wanna feel pleased, I wanna feel happy, I wanna feel you know, it's a different product. See what I mean? It's just a different thing you're looking for. And I have less interest in that. I have more interest in somebody telling me, you're totally off. Don't do that. So would rather be Anthropic.

**Harry Stebbings** [55:43]:

Yes. For that perspective. Yes. Yeah. A 150 or a $149,000,000,000.

**Sebastian Siemiatkowski** [55:47]:

I didn't look at the valuation. I didn't understand the numbers. Billion dollars was the

**Harry Stebbings** [55:50]:

revenue expectations by 2030. Oh, really? Yeah. Mhmm. Which was phenomenal. Yeah. You invest now a lot Mhmm. As well through flat. No? What have you changed your mind on since also being an investor?

**Sebastian Siemiatkowski** [56:01]:

No, I have changed my mind on software, right? So I think that software is getting much more risky, and it's much unclear what the future of SaaS is. So we, for example, big Flat made a big investment in Defensor, which is like a military arms type of thing. Not arms, but military defence. Yeah. And that's very much like not you know, there's some drones in there and stuff like that, but it's not it's very different. It's not SaaS. Right?

**Unknown** [56:27]:

I

**Sebastian Siemiatkowski** [56:28]:

think

**Harry Stebbings** [56:28]:

data center is the one that's the most underinvested categories today. Mhmm. When you look at inference needing to run for twenty four hours a day for most of the knowledge worker population and it running for, like, 1% of knowledge worker population today, I'm like, why the fuck is more money not going into data centers? Mhmm. Do you agree with that? And do you think

**Sebastian Siemiatkowski** [56:45]:

I I I have a very it's funny you asked me about this. I actually play I play around sometimes when I have time. I play around with Sooner. Have you played around with Sooner? Dude, I love Suno. I

**Harry Stebbings** [56:53]:

actually I actually sent Nik at Revolut Yeah. A song to get him to come on the show most recently, and it helped get him Yeah. Yeah. Awesome. It helped get him on.

**Sebastian Siemiatkowski** [57:02]:

Yeah. I I love Suno. So what I've done with Suno is, like, I was I was playing around, and I've been doing some songs. I even published it on Spotify for the fun of it. So you can go to Klarna Stebb. I have like 74 monthly listeners or something. And my kids get so annoyed when I publish songs in my name. It's really funny. But two of those songs are called Compression. And this came from a conversation I had with Klarna. So I blame all the lyrics on Claude, don't blame him on me. I was only the producer. Claude wrote the lyrics. Then I had to give Claude some artistic freedom. I'm very interested in this. Like, I got this question. I was on a conference in Yellowstone, and I was on the stage crazy enough with Sam Altman and Eric Schmidt. And from the audience comes to this question, how is it possible that you can take the whole of ChatuchPity five as an example, one of these once they've been trained, once the training is over and the whole thing is done, and fit it on a USB stick. How is that possible? That it's not bigger in size. It's just like a few 100 gigabytes or whatever the size of the models are. And then they gave different answers. And I had an answer in my head, but I felt embarrassed in that setting to say, And I think what people underestimate with AI, it's a compression technology. So what that means is if you historically put data in a database, you say a database record, okay, Klarna has a customer called Sephora. And then we write again, Klarna has a customer in Sephora. You created this tremendous amount of duplication. If you look at any large enterprise company, they will have the same information over and over and over again. But if you look at Wikipedia, how many articles is there about Klarna? One. Why aren't there 15? What do they do so magically? How can it be that Klarna historically had a customer relationship with Sephora and we had information about that customer relationship in Slack, in Salesforce, in Google Docs, in Google Slide? Kind of the same information over and over again, but on Wikipedia, it's just one article. How do they do that? And I realized when you train the model, if I tell that Harry is not only running a fantastic podcast but also runs a VC, that if you tell it once when you train it, it will forget it. It will ignore that information. But if you tell it enough number of times, it will remember it. And then when you go and ask it, it will know that information. But it's not storing it twice. Because if it's getting the same information that it already knows, it doesn't move the tokens. So it's automatically compressing all the information. This is why you can take the whole freaking Internet, all human knowledge, and compress it down to a few 100 gigabytes. That's a huge amount of information. Now, obviously, you lose precision. This is why it's very worthless to go and ask, what is the opening hour of the Starbucks down on the corner? And the AI would be like, I have no clue. The equivalent of Chattypiti five I asked this AI, so AI is responsible if I'm wrong. But the Chattypiti five, as an example, the equivalent of the number of gigabytes that that model is, is equivalent of about two, three days of weather data from the whole globe. That's it. So how can it then be so capable of answering all these questions? Because, unfortunately, despite what we humans would like to say, the amount of true novel information and knowledge in human society is quite limited. What we see is repetitions and variations on the same themes over and over and over again. So the point being, to answer your question, when we realize this, we also realize that we're compressing knowledge. That's why people are playing around doing this, like, oh, look at my iMac Mini. Was running my own model on it. It actually works. Like, I can run this on a Raspberry. You know, like, the thing is, like, Romeo and Juliet, that story exists in a 100 different variations. And the unfortunately thing is when you compress it down with math, it knows AI sees that not as Romeo and Juliet and then another love story, another love story. It sees a love story and then knows it has slightly different names in different variations. So it's a massive compression. And now comes the question, do we need all of that compute in the future? And I happened to have this amazing conversation with Michael J. Burry about this the other week. Wow. Because I was talking about this because he's doing those bets that it's not, right? And I said, look, I think there's two arguments for and against. One is, if you look at enterprise, what does enterprise want? Enterprise wants highest quality at lowest cost. Why would I recompute my information about Sephora over and over again? If somebody could help me to compress that down to just one single source of truth and not having all that information unnecessary, I'll take it. I'll save a lot of money. I don't need that all to compute. Why do I wanna do So in enterprise, you're gonna see this dramatic squeeze and compression. The counterargument to this is you and I then go out and say, hey, we've had this amazing podcast. Now let's watch a movie together. We wanna watch Star Wars but with our faces. You'll be Darth Vader and I'll be Luke. Right? Now, that needs generation. That needs a, you know, a data center to generate that for us. So the question is just like, what power will be greater, the compression of enterprise data or the generation of new stuff for entertainment and other things? And I don't know the answer to that question. I think you can argue both ways. But in enterprise data, there's gonna be a massive compression that's gonna come naturally through this technology. And that's why I'm a little bit like and I don't wanna be the guy who said there's only gonna be four computers in the world. Like, I don't wanna be that guy. So I wanna be a little bit mindful of Klips stay forever, Seth. Don't do this to yourself. He said there was only gonna be In 2040, they're gonna play this clip. I was like, can you believe that? You were so stupid. No. But I but I'm just saying that, like, it will so I I don't know which power gonna be greater. Right? Like, which one is

**Harry Stebbings** [62:25]:

If run with that enterprise compression Yeah. What does that mean for data centers and for chip companies like NVIDIA? Well, that would mean

**Sebastian Siemiatkowski** [62:33]:

that you would need significantly less. That's the consequence. The problem is, why do we have so much big software? Why do we have so much data? It's all a mess because we had humans who were trying to do their best but the right hand didn't know what the left hand was doing and they were overriding that and the code over there didn't there. And then people start doing transformations and stuff, and it all becomes a big mess. And actually, Wikipedia is the most successful knowledge graph in the world, I would argue. But if you look at the standards that they apply, how do they do that? Like, very I'll give you a very simple, like, I love this principle. So if you go to Wikipedia and you try to create a new article about a new topic, it's very hard. Like, if you go to Google Docs, you just click new. Boom. You start writing a new document. If you go to Cursor, you start new, new code base. Wikipedia, where is the new button? There is none. Do you know how to find a new button? No. You have to search for an article, and if you search for something that doesn't exist, then you're allowed to create new.

**Unknown** [63:26]:

Wow.

**Sebastian Siemiatkowski** [63:26]:

See what I mean? Yeah. And that's so different. And companies doesn't work like that. In companies, it's like, hey, I have an idea. I think Klarna should be doing this. And like, okay, let's just start coding. But let's go and check. Maybe we already have code doing this. Maybe we already do that. So the point is that, like, the reason that compression hasn't happened historically is just because so many people have been involved with different experience, knowledge, and so forth, and it just creates this massive mess. And nobody has been as disciplined as has been to keep it to one source of truth and so forth. They've really been amazing at that. You can read up a lot about how they've been doing, but AI is going to help with that. AI is going help organizations say, hey, should we really be doing this thing because we already have code for this and so forth? It's not there yet, but that's going to happen not because AI gets smarter, because it's economically sound. In a business, it's not economically sound to duplicate. It's economically sound to reuse what you already have. That's the reason it's gonna happen. It's not because, like, it makes sense economically to not do what you've already done again.

**Harry Stebbings** [64:25]:

Were there any other takeaways from your conversation with Michael Barry? He's a phenomenal thinker.

**Sebastian Siemiatkowski** [64:30]:

Yeah, yeah. No, we enjoyed it. I think in this regard, I think we were aligned, right? But it was funny because we were talking about this how much novelty is there really, right? And it's an interesting concept because, as I said to him also, there's other data that suggests otherwise. I've heard data that suggests that 30 of the searches on Google every day are new. Like, I don't know if that's true. It sounds crazy to me, but there are some data to suggest. So maybe there is more novelty. And I think that's like the I don't know the answer to these questions, but I think this is very, very fascinating to me to see the counter effects of these.

**Harry Stebbings** [65:00]:

Before we go into a quick fight, it's been not knowing the answer to the questions. I'm sure you're in CEO groups, go to CEO events, sit in green rooms, and there are topics or themes that CEOs discuss about AI that they do not discuss publicly. What do you think they most are?

**Sebastian Siemiatkowski** [65:16]:

First of all, I don't go to that many of those, to be honest, because I'm hard coding and working with my teams and trying to make sure that Klarna is as successful as possible through this transformation. I spend very little time on those kind of, you know, things.

**Harry Stebbings** [65:27]:

Does this generation make every CEO, even public company CEOs, a builder again? I think it has to be. Yeah. Doesn't it? Well, we were again, I was with Mike last night from Atlassian. He's, I'm up at 5AM coding. Mhmm. I'm like, was that the same before? He's like, no.

**Sebastian Siemiatkowski** [65:41]:

Well, I think so. But it's also amazing. Right? It's I mean, I think for somebody like myself who didn't use to code or couldn't code, I think it's fantastic to be able to take my ideas and thoughts and turn them into something I can show others. It doesn't mean to have to be production ready, but I can articulate things at a very different level of quality than just like trying to explain something on a whiteboard or, you know, whatever. Now I can actually bring things to people. I had this very, very unique experience with Klarna just last week, where we were trying to talk about to kind of communicate a very specific thing that was like touching on accounting and finances and predictions. Stuff. It was pretty like very, very complex thing, and we were just talking about it. This was like the first time I Klarna went I said, Hey, can we like interact a few times? I wanted to like see if we can like explain this concept. And after a few iterations, I got this like beautiful animation. It wasn't even a slide because it was an HTML file. I thought to myself, Wow, you know what? This is actually the first time I felt that AI could do something that humans couldn't. And it was the first time I had that experience. And the reason was because if I would have liked to do the same animation and beautiful pedagogical explanation of a very complex technical accounting finance thing, historically, would have brought in an animator, a designer, an accountant, a finance Google Sheet guy, etcetera. And each one of them may have been extremely skilled at what they do, but didn't necessarily know what the other person needed in order to perfect that outcome. And so the animator would have been like, yeah, can animate like this and that, but they don't really understand what they're animating. Right? The financial concept. The financial guy may be like, can do the numbers like this and that, but I don't really understand why we would need this like animation because I read the numbers and I get everything. I don't need this freaking visualization. Right? So the point is that here, Claude Claude had all the skills in one and then created this. And I was like, I could not a human would not have done that. Like, and it was just, like, such a experience to me. Was like shit.

**Harry Stebbings** [67:33]:

Special moment when AI exceeds human capabilities.

**Sebastian Siemiatkowski** [67:36]:

And I think in this in this experience to me, it did. Like, it did something that I I don't think a sing it's not like a single person could have done each part of different parts, but what was like, how many people are gonna find in the world that are great animators, great visualization people, super pedagogical, knows everything about financial accounting, understand financial services? Like, you know, it's like, how who are gonna find that have Rev Venn diagram. Yeah. I mean, like It's gonna be hard to find the person that's good at all of these things in one.

**Harry Stebbings** [68:00]:

Right? Final one before a quick find. Yeah. What happens to Elon with Grok? I would never dare to bet against Elon. Would you ever do? No. But the trouble is I would never dare to bet against is when you have two people you would never dare to bet against in the same market, and most people would never dare to bet against Sam.

**Unknown** [68:14]:

Mhmm.

**Harry Stebbings** [68:15]:

And so if you'd never dare to bet against Sam, but you'd also never dare to bet against Elon, one of your prior assumptions has to be wrong.

**Sebastian Siemiatkowski** [68:22]:

Yeah. I I think he's gonna do really well. I I mean, I think it's if you think about the fact that he could, in a few weeks in a few weeks, put together a frontier model at that quality level, you gotta give the credit to the guy. Like, I mean, that's just, like it's it's insane. Do you use it, Ever? I actually you know what I love about it is and this is funny because this is exactly what Elon has been saying all the time, and nobody wants to give him credit for this. But the point is, On X, people spread all these rumors. Like, were saying, like, yesterday was a little rumor that, like, like company offers buy now pay later for rent.

**Harry Stebbings** [68:53]:

Yeah. Yeah. You're doing rent.

**Sebastian Siemiatkowski** [68:54]:

Yeah. We're doing rent. You're doing rent. And we're like, no. We're not doing rent, and nobody cares. Right? But one thing that makes Too late. Yeah. It's too late. And people are just like, it was Klarna like. Next And now they're disappointed you don't do rent. Exactly. And then next tweet is Klarna does rent. And then we're trying to, like our comms team's jumping on and trying to, but, like, if it was established media, they would fix it. But, like, these x posts and TikTok posts, like, nobody goes bonanza. Right? But then people write, at grok, is this true? And grok actually almost always answers correctly. And I think that to me is very, very impressive. I think it speaks to Elon's vision of x, that over time, it can become the trusted source of information.

**Unknown** [69:33]:

Mhmm.

**Sebastian Siemiatkowski** [69:34]:

And what he's done with Gorkipedia, where he's taken inspiration from Wikipedia, what I said, and so forth. So I think that there's something there, and that's gonna be critical for our societies because right now we have this scam ink, the scam is flowing over, like AI is creating, you know, virtual versions of everything. So I think that that's to me where the holy you know, where there's something really, really exciting.

**Harry Stebbings** [69:54]:

I agree. Do know what? I just wish you could hide the grok because I'm too embarrassed to ask, like, what is an IDE? Yeah. Exactly. They can have a purse IDE. Yeah. Like, personal idea. You just explain it. Yeah. Just, like, quietly. I don't want anyone to see this. Dude, I wanna do a quick fire with you. So what have you changed your mind almost in the last twelve months?

**Sebastian Siemiatkowski** [70:14]:

I've changed my mind most about the pace at which the transformation is happening. I was probably in the camp of I thought it was gonna happen faster than it did. But I think I've I'm always my problem is that, like, I overestimate. It takes time for people to change habits and and ways of working and stuff like that. So I actually think it's gonna take a little bit longer. The adoption, it's not necessarily the capabilities of the technology, but, like, how fast people will adopt it and how it will change.

**Harry Stebbings** [70:38]:

Do you think that differs for enterprise versus consumer? I'm actually the opposite. I'm, like, surprised by how quickly consumers adopted it when you look at the wow numbers for chat Yeah. But consumer is always gonna be faster. Right? Way faster. Yeah. Way faster. And we underestimate how fast consumers adopt and overestimate how fast enterprises adopt it.

**Sebastian Siemiatkowski** [70:55]:

Yeah. I think in in kind of work life, it's definitely going to be slower. What criticism about you stings because it's partly true? No. I think the criticism that stinks is the one that isn't true. Which is? Well, I think people sometimes said it like, oh, he's just trying to make an exit. He just tries to make a big, fast buck, or that, like, I I just wanna and after twenty years, I feel like, Hello, know, haven't I proven now? I'm in it for the long term. I think the other one is that like, he doesn't care about the consumer, he just wants to make money on interest rates, etcetera, etcetera, you know, reckless lending and all that stuff. None of that is true. I deeply care about our customers, I deeply care about them being financially well off, and I think I'm providing a product that is better than the alternative. So that's the one that stinks, because it's just not true.

**Harry Stebbings** [71:43]:

I don't understand how you'd ever level that criticism against you, like, battling public company CEO ship every day. I mean, it's like the opposite of, like, quick buck, man. Anyway, what would you do first if you were not a public company and had no scrutiny on you? Like, if I said, here's an invisibility cloak. You can do anything, spend any money on anything internally, what would you do?

**Sebastian Siemiatkowski** [72:05]:

No. I think the only thing I would do different is spend less time on communicating and talking to investors. Right? That's it. I mean, to be honest. But when I look at the strategy and what I'm trying to do with the company, I honestly feel like, as I said, that twenty fifteen vision, let's be that digital financial service assistant. That's the one I'm executing on. We're executing on it. The company's executing on it. I feel we're having tremendous momentum on it. We see the, you know, the affection of our customers picking up our banking products is amazing. Do you think you've told a good story around that? No. I think communication is hard. Think because I respectfully, I didn't

**Harry Stebbings** [72:40]:

I didn't know this.

**Sebastian Siemiatkowski** [72:41]:

No. I feel terrible. But you and I talked about it even before this podcast started that I I think my problem is, right, is that, like and this is definitely what Michael gives me as feedback. Like, I need to stick more on message. I need to I failed probably at this podcast again, and I tried to talk about all kind of things. I'm just like, I love my work. I love what we're doing. I think so many things are so interesting and complex. And then I sometimes wanna tell people everything. I wanna explain everything to them. I should be better at, like, sticking to a clear message, consistent No. Totally bad advice. Do you

**Harry Stebbings** [73:13]:

think so? People buy you, not what you sell. Yeah. Okay? We don't release 30% of shows because CEOs come on and they just sell. Let me tell you why our banking product's about it. It sucks. People buy you, not what you sell.

**Sebastian Siemiatkowski** [73:27]:

I hope so. I hope that over the years that will pay off. But I also see, what's funny is, like, when we were the most highest valued fintech in Europe, blah blah blah, then, like, I could do no wrong. Whatever I said was like, that's brilliant. Like, he's so smart. And then when we, like, you know, when we came down to 6.5 and we had to do layouts, and I was like, everything he does is a disaster. Was that a brutal time for you? Of course. Of course, it was. It was How do you deal with that? To me, it's also like one story I had this crazy thing, is I've been doing this for many years now, so I'm a little bit more like, you know, thick skinned. But what happened is I'm on this interview with MSNBC, and I've been with an interview with them many times. And generally speaking, like, you know, questions have been, I would say, balanced and fair. But suddenly, on this interview, they bring this new guy on board, and this was exactly when this was happening. And I'm sitting in my home because I was doing this interview for my house, and the guy comes in and he's like, this is a disaster. The company is going to shit. I basically didn't say that word, but, like, basically, oh, you know, this is the end of Klarna. It's all going down. And it's like and he's just, like, putting this massive pressure on me. And I'm just sitting there, and I'm I'm almost starting to crack up and laugh because it was just, like, so insane. I was like, come on. The business is doing really well. Like, obviously, we need to do some changes, but, like, it's gonna be fine. And I'm trying to kind of deal with it as professional accounts. Like, no. I don't think that less I don't blah blah blah. As you try to do in those situations. But the point is, I go out of that. I was like, oh my god. That was intense. So I get in my car. I drive to to the office, and I was like, there's only one song that I can listen to now. And, obviously, I put on Queen under pressure. I put it on max volume, and I'm just sitting there, under pressure. And I crack up. And the thing is, I said to myself, look, one of the biggest idols of mine, obviously, Slater Ibrahimovic, born in Sweden the same day I am, 10/03/1981. And I think of him, and I say, I wanted to play Champions League. How the hell does it feel to go into the finals and play Champions League? He actually never won the finals, unfortunately, for him. But the point is, like, every soccer player dreams about being in the Champions League finals, right, or a football player. The pressure. Can you imagine the pressure when you're going into that stadium? Everyone's screaming the height of your career. This is the chance you got at winning this thing. That's what I signed up for. I signed up for being on that interview with MS and C. This is what I signed up for. It is stressful. It was hard as hell, but this is what I wanted. I wanted to play in this level of league. So I also have to cherish and be happy about the fact, look at it, and be with gratitude that I get the fantastic opportunity in life to experience these things. It's amazing. I'm going through this amazing experience, and that's the only way to look at it. So as much as it halves and I can cry and I cried and I can be sad and, you know, I've had really tough times where I feel, like, super depressed about stuff, But at the same point of time, I'm always always looking at it, putting on on the pressure and being like, but this is what I signed up for. Yeah. I love

**Harry Stebbings** [76:21]:

Zlatk too.

**Sebastian Siemiatkowski** [76:22]:

Yeah.

**Unknown** [76:23]:

Did you ever interview him?

**Harry Stebbings** [76:24]:

Do you know what? You should bring him here. No. We should do. Yeah. And there's a brilliant, like, video where he's like, when I step on the pitch, I think I am God.

**Sebastian Siemiatkowski** [76:31]:

Yeah. I don't think I'm God, though. But yeah. Did you always think you would succeed, though? No. But it's exactly the same. There's funny. There's this email that I found that I wrote only six months into a company, and it's to my co founders. And it basically goes like this. This is like six months into the company. We just started. We're getting our first customers. And basically, the email goes like this. I'm sitting here. It's late evening. It's written like 11:30 p. M, you know, something. Oh, yeah. Yeah. And it goes like, I'm sitting here myself. I started thinking like, you know what? What if, like, we're actually successful with this thing? What if we start, like, growing maybe from Sweden to Finland and Norway, and then we go to Germany? What if we actually grow this globally? What if we actually go and then we go after the banks and we start building financial services? And so I basically, in that email, I write everything that's happened in the last twenty years. So the point is that obviously, did I know that was going to happen? No. But just like when he was kick kicking a ball down in Malmo on the street, did he dream about being at the finals? Of course, did. And of course, I did as well. I dreamt about being where I am now and even more so where I want to take the company in the next decades. Right? You dreamt about being here with me?

**Harry Stebbings** [77:41]:

Of course. Sweet. I I I just see it. This was a very vivid dream. But, like, I think visions are bullshit. All VCs are, say, hey. What's your vision Right. For a pre seed company? Dude, if I told you that when you were starting your business twenty years ago, you would not have been like, we're gonna be a fully fledged banking provider, we're gonna have BNPL as the insertion point, we're gonna own The US as well. You would not have been like that. You unlock the next chapter with every achievement in my mind. And so I think visions are the most actually constraining thing that we force founders to try and articulate. Am I wrong? Well, I think you're wrong with

**Sebastian Siemiatkowski** [78:16]:

me. I mean and and, again, I don't I'm not telling you that I know how we were gonna do it. I had no clue. But I was dead dedicated to doing it. And I did see I don't know why. When I was a kid, I was an immigrant kid, my parents quarrel a lot. They divorced when I was eight. My dad started drinking. Quite a chaotic upbringing. And in that, my childish interpretation of what was happening in the family was that they were always fighting about money. If I fix money, then everything will end happily ever after. That was my childish interpretation. And so I got, for whatever reason, also very interested in Richard Branson. And I read his book. And I now met him, was a fantastic experience for me. But I read him and I was just like, Wow, you know, this guy built Virgin, did the records, this and that. And then the other guy that really inspired me was Ingvar Kamprad, the founder of IKEA. You know, who built this. He was, for a period of time, seen as the most wealthiest man in the world, And so, like, I just, for whatever reason, I was always, like, so enthusiastic about building businesses. I remember we had this, like, school night in middle grade where the cafeteria was always the place that did the most money, and then there was tons of other businesses, but they all failed and nobody was really making a lot of money. But the point was to raise money to go to like on a class trip or whatever. And I started a pizzeria. I started selling pizzas, and we out competed the cafeteria. And we took all the money, and my class could go on a high school trip because we made all the money that the cafeteria was making. I've always wanted to drive a business. I've always had this. And then eventually, I said to myself, the coolest business to build must be a bank. Like, that must be the ultimate business because banks always wins, banks always prevail. You see these things, you see like the JP Morgans of the world and all this. They go through this. Yeah, of course, sometimes they get financial crisis and whatever. But, like, in the longer term, the bankers always wins, you know? So that was always an inspiration to me. Can I ask a hard question?

**Harry Stebbings** [80:12]:

I've I've invested in 13 unicorns. Yep. Well done, me. VC is congratulating themselves. And the single most common feature is a broken relationship with their father. Did that drive you in a way that you wouldn't have had otherwise, if you don't mind me asking?

**Sebastian Siemiatkowski** [80:26]:

No, think for sure. I think it's a combination of that and being an immigrant kid. I think that the seeing all these other Swedish kids going to their summer holiday houses and having a surplus that to me looked great, and then us eating pancakes seven days in a row because it was the cheapest food that mom could put together because we were out of money. Even though I love pancakes and I thought they were really delicious. I think it created this like, I felt my parents were smart, my dad deserved something. Better is the wrong word, but like, he started driving a cab, you know, and he was very smart, very intellectual. That was not the right job for him. He was saddened when he saw drunk people and he was driving them and seeing what people were saying. Think he was just not his place to be in life. And just it broke him down. And I felt that if I was going to fix things, if I was going to get money, then I was going to fix this. Now, problem was, once I got money, it turns out that life isn't like that. Because I gave a lot of money to my father and he used it to drink more. And he drank himself to death. So, like, it turned out that money was not going to solve those problems. There are some problems that money won't solve, right? And again, I don't want have that discussion about, does money make you happier? Blah, Because obviously, when you've been as fortunate as I have in life, and I can take my kids on an amazing vacation, I can do things, and I don't have to think every day about, you know, can I afford this? I mean, can I do this? That's a tremendous luxury and privilege in life, to be in that position. But at the same point of time, I've also experienced that it doesn't solve all problems. And it's sad because that was partially my aspiration with doing this. Right?

**Harry Stebbings** [82:03]:

Final one. I'd to finish on a theme of positivity. What are you most excited for in the next ten years? My mother's got MS. I'm very excited for developments with diseases and treatments for diseases like MS. What are you most excited for?

**Sebastian Siemiatkowski** [82:17]:

I think with AI, obviously, the thing is that if you, five, ten years ago, could say that, like, well, I kind of think I know what's gonna happen in the future. Like, it's gonna kind of continue like this or whatever. And then suddenly came COVID and the war in Russia, you know, it doesn't it's like the world just changed. And suddenly came AI, and you suddenly sit there and like, I have no idea how the world is gonna be in two years. Like, I have no clue. Like But for myself, what I'm most excited about is like, a, I'm still an optimist at heart. I do believe that these technologies will make life better for humans. I think it will actually lead to something positive. I'm in that camp. You can have an intellectual debate with me if you want to, but I think that's true. And then what I'm most excited about for me is I wanna realize the vision of Klarna. Like, against what you said about not having visions, like, I wanna put that vision into reality. I wanna bring finally a banking product that truly helps people save time, save money, be in control of their finances. That excites me. It excites the hell out of me. And I think that, like, all these incumbents have been having all these excess profits. They've made so much money because people don't switch because and honestly, they didn't care enough about their customers. They didn't wake up like that restaurant or retailer every day and said, what can I do to make my customer better off? They didn't do that. I'm honestly excited about that. That journey is exciting to me. And I know that if I make more money, I'm not gonna be happier because I have a bigger pile of money. It's not the point. But the journey of trying to accomplish to make Klarna into that global retail bank and the adventure it encompasses, that excites me. Going through all these different challenges and opportunities and trying to make the best that I can of delivering on that, that thing really excites me. And now AI is enabling me to do things that I couldn't do with this company before. I can realize those visions faster and at a higher quality than was ever possible before, and that's super exciting.

**Harry Stebbings** [84:07]:

Dude, I've so enjoyed this. It's do you see it's so much nice to do in person? Yeah. Thank you so much for being so brilliant and being so open, but it's been such a joy. Thank you. It's been a joy to be here. But before we leave you today,

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