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Shopify partners with Amazon to bring "Buy with Prime" to its US sellers
Shopify partners with Amazon to bring "Buy with Prime" to its US sellers, Klarna is ready for an IPO according to the company’s CEO, and JPMorgan increases its stake in Brazilian digital bank C6
Shopify sold its logistics business earlier this year and now partnered with Amazon to give its merchants access to Amazon’s logistics network. The investors seem to notice, as they now value Shopify higher than Citigroup. More on that in today’s newsletter:
Shopify partners with Amazon to bring "Buy with Prime" to its US sellers,
Klarna is ready for an IPO according to the company’s CEO, and
JPMorgan increases its stake in Brazilian digital bank C6
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Shopify Partners with Amazon to Bring "Buy with Prime" to Its US Sellers
Amazon (NASDAQ: AMZN) and Shopify (NYSE: SHOP) have reached an agreement to allow Shopify's merchants to utilize Amazon's logistics network. This collaboration will enable Shopify sellers in the US to access Amazon's "Buy with Prime" feature in Shopify’s Checkout. Merchants using the Shopify platform will be able to provide Amazon Prime members with Prime benefits like fast and free delivery, while Shopify will handle payment processing using its Shopify Payments infrastructure. The program started for select Shopify sellers and will be available to all interested Shopify merchants by the end of September.
Until recently, Shopify tried to build a competitor to Amazon’s logistics network. The company started experimenting with shipping and delivery in 2015 with the launch of Shopify Shipping. In 2019, Shopify launched the Shopify Fulfillment Network, a network of partner-operated and fully-owned fulfillment centers across the US. The company then acquired a warehouse robotics company 6 River Systems for $450 million in 2019, and a fulfillment technology provider Deliverr for $2.1 billion in 2022. Nevertheless, earlier this year, Shopify announced the sale of its logistics business to Flexport.
Klarna is Ready for IPO According to CEO
Swedish “Buy Now Pay Later” giant Klarna reported better than expected second-quarter results. Gross merchandise volume for the quarter increased by 14% YoY to SEK 238.6 billion ($21.8 billion) driving a 17% YoY increase in revenue to SEK 5.5 billion ($500 million). The company noted that its efforts to attract U.S. customers, including a partnership with Airbnb for flexible payments, have contributed to its positive performance. Klarna's credit losses continued to improve, decreasing to 0.41% of GMV compared to 0.80% of GMV in the second quarter of 2022. The company’s Operating loss for the quarter was SEK 0.78 billion ($74 million) compared to an Operating loss of SEK 3.6 billion ($370 million) a year ago.
Klarna’s CEO, Sebastian Siemiatkowski, told the Financial Times, the company is prepared for an IPO when market conditions improve. He outlined three requirements for an IPO: establishing a strong presence in the US, having a sustainable business model, and potential for continued growth. While Klarna is now meeting these criteria, raising funds is not a priority and the timing of the IPO will depend on market conditions, according to Siemiatkowski. Klarna's competitor, Affirm (NASDAQ: AFRM), recently reported better-than-expected results, but its shares remain below their 2021 listing price.
✔️ Klarna reports H1 2023 Results: smashes profitability target, continued growth ahead of e-commerce
✔️ Klarna’s Q2 results include profitable month as GMV continues growth streak
✔️ Klarna ready for IPO when conditions improve, says chief
JPMorgan Increases Stake in Brazilian Digital Bank C6
JPMorgan Chase & Co (NYSE: JPM) raised its ownership stake in the Brazilian digital bank C6 from 40% to 46%, according to Reuters. Since JPMorgan's initial investment in June 2021, C6 has expanded its customer base from 8 million to 25 million, increased its credit portfolio from R$9.5 billion ($1.9 billion) to R$40 billion ($8.1 billion), and introduced new products like auto loans. C6 reported a loss of R$2.2 billion ($0.44 billion) last year, primarily due to increased provisions for credit losses. The financial terms of the transaction were not disclosed. JPMorgan views its investment in C6 Bank as a crucial part of its global strategy for international consumer banking.
Thus, earlier in the year, JPMorgan’s CEO, Jamie Dimon, confirmed in an interview with Handelsblatt that the company will be expanding its online UK consumer bank to Germany and other European Union countries. JPMorgan entered the UK market with a digital-only retail offering in 2021 and managed to successfully compete with local digital banks such as Monzo, Revolut, and Starling. While the timing of the expansion is still undecided, Dimon stated that they have ambitious plans for this move. The expansion aims to increase competition for European rivals in the crowded market and target medium-sized firms in Europe's largest economy.
While JPMorgan is plotting its global dominance, Citigroup (NYSE: C) now has a smaller market cap than Shopify (NYSE: SHOP). I mean… Citigroup is a Global Systemically Important Bank (G-SIB) with $2.38 trillion in assets. Let that sink in.
Head of B2B Financial Services for North America & Emerging Markets
🇺🇸 Seattle, WA, United States
Data Science Manager, Amazon B2B Payments and Lending
🇺🇸 Seattle, WA or New York, NY, United States
Senior Product Manager, Amazon Pay
🇮🇳 Bengaluru, India
Fintech Partnerships Vice President
🇺🇸 San Francisco, CA, United States
Senior Director of Software Engineering – Payments Platforms
🇮🇪 Dublin, Ireland
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Cover image source: Shopify
Disclaimer: Information contained in this newsletter is intended for educational and informational purposes only and should not be considered financial advice. You should do your own research or seek professional advice before making any investment decisions.