Klarna is gearing up for its IPO, and the F1 filed last week revealed impressive numbers: 93 million active users, $105 billion in gross merchandise volume (GMV) for 2024, and, importantly, profitability. The fintech giant operates a hybrid payment network that blends traditional card processing with a proprietary closed-loop system, giving it control over transactions while maintaining merchant relationships. Klarna estimates its serviceable market at $450 billion in payment revenue, with additional growth from its expanding ad business, which jumped from $13 million in 2020 to $180 million in 2024. With a banking license in the EEA and $9.5 billion in consumer deposits, Klarna is well-positioned to compete in the evolving fintech landscape.

We did a special edition deep dive analyzing Klarna's F-1 for Toaster readers, breaking down its business (focusing on the Klarna Card), market strategy, customer economics, financial performance, and future vision.

F1 Breakdown - With 93 million users and profitable, Klarna's IPO might redefine fintech valuations.

Klarna nabs Walmart away from Affirm and boosts its IPO prospects

Klarna just scored a major win, snatching Walmart’s buy now, pay later business away from Affirm as it gears up for an IPO. The Swedish fintech giant, which has been expanding aggressively in the U.S., will offer installment loans to Walmart shoppers through its majority-owned fintech startup, OnePay, starting later this year. Affirm took a hit on the news, with its stock dropping 8% on Monday. Klarna, which swung to a $21 million net profit in 2024 after a rough 2023, is clearly making moves, and locking in Walmart—one of the biggest retailers in the world—only strengthens its U.S. presence. [TechCrunch]

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Square Receives FDIC Approval to Offer Consumer Loan Product

Block, Inc. just got the green light from the FDIC for Square Financial Services to offer Cash App Borrow nationwide, bringing small, short-term loans directly to consumers. Previously available through an external bank partner, the product saw nearly $9 billion in originations in 2024, with most loans under $100 and repaid within a month—far cheaper than payday loans. Square Financial Services, already known for providing loans and savings options to businesses, will now handle Cash App Borrow loans in-house, gradually ramping up volumes in the coming quarters. [Block, Inc.]

Cash App Launches National Brand Campaign Inviting Customers to "Cash In" on Better Banking and Savvier Spending

Cash App is making a big splash with its largest marketing campaign, “Cash In,” aiming to position itself as a go-to financial platform. Directed by Emmy-nominated Ramy Youssef, the ad series highlights how Cash App users can manage money smarter—whether it’s auto-investing paychecks or using free overdraft coverage. The campaign also promotes Cash App Afterpay, which lets eligible customers pay over time, a feature resonating with Gen Z. With 25 million active Cash App Card users and a growing banking suite, Cash App is doubling down on its “bank our base” strategy to keep customers engaged. [Business Wire] [Cash App]

A new 'introductory' card boosts competition for banks

GetAugie is shaking up the credit-building space with a new virtual charge card that acts like a debit card but helps users build credit by reporting subscription payments to major bureaus. Unlike secured credit cards, Augie requires no deposit, no annual fee, and no interest—just whatever is in the user’s bank account. The fintech, which is targeting young adults and new immigrants, is betting that easy access and no credit checks will make it a go-to option for those struggling to enter the financial system. With banks eyeing the growing demand for credit-building tools, Augie’s entry adds more pressure for traditional players to innovate. [American Banker]

Bolt CEO Ryan Breslow explains his troubled $30M personal loan, announces new ‘super app’

Bolt CEO Ryan Breslow, back in the driver’s seat after a turbulent exit, is defending his controversial $30 million personal loan while announcing bold plans for a new “super app.” Speaking at Fintech Meetup, Breslow called the loan an act of loyalty, insisting he took it instead of selling stock and expected to repay it after an IPO. Now, he's focused on Bolt’s next evolution, promising, “Instead of one-click checkout, we’re going to have one-click everything: financial services, peer-to-peer, crypto, cards, financial products, all in one app.” While Bolt boasts 80 million wallets, it has yet to monetize them, raising questions about its financial future. [TechCrunch]

Varo to leverage AI, machine learning in profitability push

Varo Bank is betting on artificial intelligence and machine learning to drive profitability, with incoming CEO Gavin Michael focusing on tech-powered underwriting, fraud prevention, and personalized customer experiences. The neobank, which grew revenue 22% in 2024 but remained unprofitable, recently secured $55 million in funding and aims to refine its existing banking and lending products rather than expand into new categories. Michael, who previously took Bakkt public, hinted at keeping "all options on the table" for Varo’s future, but for now, the focus is scaling efficiently. "The next stage is scaling and just taking the business to the next level, achieving profitability," he said. [Banking Dive]

OakNorth set to acquire Michigan’s Community Unity Bank to fuel US expansion plans

OakNorth is making a big move in the U.S., agreeing to acquire Michigan-based Community Unity Bank (CUB) in a stock-for-stock deal aimed at accelerating its expansion. CUB, a full-service community bank, will serve as a foundation for OakNorth’s U.S. growth, with its CEO, Greg Wernette, set to lead OakNorth’s American banking division. The UK-based challenger bank, which entered the U.S. market in 2023 and has already distributed over $700 million in loans, sees this acquisition as a way to “fill the funding gap” left by the collapse of several mid-market-focused U.S. banks. The deal is pending regulatory approval. [FinTech Futures] [Community Unity Bank]

Guru Sethupathy, founder and CEO of FairNow

Guru and Carlos discuss governance as essential risk management for organizations scaling AI usage. From his diverse background spanning academia to entrepreneurship, Guru outlines three core components: monitoring (tracking model performance, explainability, and bias), compliance (meeting lending regulations and AI laws), and establishing clear processes and procedures. Guru advocates for early implementation of governance frameworks, even for Series A to C startups, as neglecting this area can quickly become an existential issue during due diligence or regulatory audits.

Fintech marketers should take note of this, as effective AI governance directly impacts growth opportunities, partner relationships, and customer trust. Poor governance can derail sales cycles and partnerships, particularly with banks scrutinizing their fintech partners' practices. Fintech companies can mitigate business risks while building credibility in regulated industries by implementing a pragmatic, incremental approach to AI governance. This isn't merely about defensive compliance—it's a strategic opportunity to accelerate AI adoption while safeguarding brand reputation and competitive advantage in an increasingly regulated environment.

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Maxed out your affiliate marketing budget? Time to take a serious look at direct mail. 

Fintech lenders spend $4B-$6B annually on affiliate channels like Credit Karma and LendingTree, but direct mail quietly holds its own, with lenders sending 6 billion pieces last year and investing $3 billion in the channel. While affiliate marketing captures active borrowers, direct mail generates demand by targeting high-intent consumers before they start shopping. It’s expensive and slow, but once optimized, it scales predictably—just ask Capital One, Chase, and Amex, who keep doubling down. Smart lenders use both strategies in tandem to drive efficient growth. [The Free Toaster]