Klarna CEO: SaaS is dead
Klarna co-founder Sebastian Siemiatkowski argued that the traditional "system of record" SaaS model is being replaced by AI-driven "agentic" systems that take action on a user's behalf. He also noted that with AI, Klarna needs "less people than ever before" and that high software revenue multiples are gone unless a company is differentiated by AI or network effects.
- In the "Twenty Minute VC" podcast, Siemiatkowski elaborated that AI is driving the cost of creating software to near zero, which will in turn drastically lower the costs for businesses to switch between SaaS vendors, thereby threatening established enterprise resource planning (ERP) systems. - Klarna's AI-driven approach initially led to the replacement of approximately 700 customer service employees between 2022 and 2024, with the company claiming its AI assistant handled two-thirds of all customer queries. - However, this move resulted in increased customer complaints and lower user satisfaction due to the AI's inability to handle nuanced problems and provide empathetic support, leading Klarna to begin rehiring human agents in mid-2025. - Despite the reversal in customer service, Klarna's CEO has stated the company is not backing away from AI and continues to invest heavily in it, aiming for a hybrid model where AI handles routine tasks and humans manage more complex issues. - The concept of "agentic AI" replacing "systems of record" suggests a shift from software that stores information (like a CRM) to autonomous AI systems that execute multi-step workflows and take action on behalf of the user. - Some industry experts argue that SaaS is not dead but is instead becoming the foundational layer, the "system of record," on which the new "agentic" or action-oriented AI systems will be built. - The "SaaS is dead" narrative has been fueled by other tech leaders as well, including Microsoft CEO Satya Nadella, who suggested that in the "agent era," the business logic will move to AI agents that can interact with multiple databases, diminishing the role of individual SaaS applications. - Some venture capitalists and founders of agentic AI startups are seen as promoting the "SaaS is dead" narrative, which some speculate could be a negotiating tactic to acquire stakes in startups at lower valuations.
