Klarna quadrupled its net loss in the first quarter to $250 million.

According to a report in the Wall Street Journal, Klarna, the fintech company famous for its ‘buy-now-pay-later’ product, is in talks to raise funding at a valuation of $15 billion, nearly a third of its 2021 valuation of $46 billion. (WSJ)

Quoting people familiar with the matter, the WSJ said Klarna is now in talks to raise at least $500 million – that’s down from $1 billion being negotiated just last month at a valuation in the $30 billion range. It is not certain that the funding will actually materialize.

The situation is emblematic of the current dire straits that tech companies find themselves in, the WSJ said.

Affirm (NASDAQ: AFRM), a rival to Klarna in the BNPL space, has lost over 82% of its value year-to-date.

Last month, Klarna laid off 10% of its workforce.

Sebastian Siemiatkowski, Klarna’s CEO and co-founder, said the Ukraine war, inflation, a shift in consumer sentiment, a volatile stock market and a potential recession had all combined to roil the business plans Klarna set for 2022 last year in autumn.

The situation has shifted investors’ preference for profitable companies from growth-focused startups with low potential of achieving profitability in the near future. This is a pointer to why Klarna is having difficulty raising funds, even in a down round.

To compound problems, the massively cash-rich Apple (NASDAQ: AAPL) is now stomping into BNPL fintechs’ backyards. Earlier this month, the company announced its Apple Pay Later service.

Apple users in the US will be able to avail Apple Pay Later and split the cost of an Apple Pay purchase into four equal payments spread over six weeks, with zero interest and no fees whatsoever.

Related Story: Apple Announces New Fintech-Like Features For Its Wallet App Including BNPL