ASX-listed Zip Co Ltd (ASX: ZIP) has been one of the top-performing stocks in 2024, gaining 241% since January.
While Zip has solidified its presence in the Australian buy now, pay later (BNPL) market, Swedish fintech company Klarna has also been crushing it in the global BNPL space.
So how does Zip compare to Klarna? Let's break down the numbers after Klarna's H1 2024 financial results.
Note: At the time of writing, 1 AUD = 6.91 Swedish Krona.
Image source: Getty Images
Zip's ASX growth shines in FY24
Zip continues to shine on the ASX. As my colleague Bernd recently reported, A $6,000 investment in Zip around 12 months ago would now be worth over $42,000.
But Zip also delivered strong business growth in FY24 to back up this change in market value.
Revenues jumped by 28% to $868 million, while total transaction volume (TTV) reached $10.1 billion — a 14% increase.
Even more striking was Zip's gross profit, which soared by 53% to hit $373 million.
Consequently, after navigating through a challenging period in FY22 and FY23, Zip has now posted four straight quarters of profits.
The stock was lifted to a 'strong buy' from the consensus of analyst estimates in August, according to CommSec.
Klarna's global dominance
While Zip's ASX growth is notable, Klarna's global growth is hard to ignore. The Swedish fintech company was founded in 2005 and has an interesting history.
It now operates in 45 countries and reported a 27% revenue increase in the first half of 2024, reaching 20.9 billion Swedish Krona (around AUD $2.93 billion).
The company's operating income also turned positive at 673 million Swedish Krona (AUD 94.2 million).
This is a sharp contrast to its 1.1 billion (AUD 154 million) loss in H1 last year.
Klarna's growth in the US was particularly noteworthy. During the first half, US revenues jumped 38%, and gross profits climbed 93%.
It has now been profitable for seven consecutive quarters, a little ahead of Zip on that timeline. Furthermore, it is now the "partner of choice for 1 in 4 of the top 100 US merchants".
Fintech investment author Linas Beliunas noted that Klarna is "building the ultimate shopping destination of the future", and that it. is aiming "to become the Google of Shopping."
Zip vs Klarna: By the numbers
Taking the numbers at face value, Zip's ASX growth is solid, but Klarna operates on a much larger scale.
For instance, Klarna's gross merchandise volume (GMV) hit 1 trillion Swedish Krona (AUD 140 billion) over the past twelve months.
Zip doesn't use GMV, but TTV instead. Whilst these two terms aren't explicitly interchangeable, they are similar.
GMV refers to the total value of goods sold. Whereas TTV refers to the total value of transactions processed on a platform, regardless of whether it involves goods or services.
So, one is based on the value of physical goods sold, and the other is based on the transaction values.
On this basis, Klarna's GMV surpasses Zip's TTV of AUD $10.1 billion.
Growth-wise, however, the two are similar – Zip posted 28% revenue growth and Klarna 27%.
While Zip remains focused on its Australian market, Klarna has partnerships with major global brands like Uber and Airbnb.
Zip has a lot to do to match Klarna's pace, especially in the US. Time will tell if it can capitalise on this opportunity.
Zip ASX takeaway
Zip's ASX growth has been strong, showing that it can hold its own in the competitive BNPL space.
It is up more than 635% in the past 12 months.
