Stockholm is staking a claim as a major European fintech hub after recording $266 million in startup investments over the past year, leaving it trailing only London as a magnet for VC inflows.
While the Swedish capital lacks an extensive financial ecosystem of accelerators, incubators, and niche investors compared to other European financial centres, it nonetheless accounted for 18.3% of all fintech investments in Europe over the past five years, according to figures from the Stockholm School of Economics.
The $266 million funding figure for 2014 accounted for nearly one-fifth (18%) of the total of $1.48bn FinTech investments across Europe and one-third of all startup investment activity in Sweden.
Torbjörn Bengtsson, of the stockholm business region development states: “This report highlights how fintech is rapidly growing in Stockholm. The city has so much going for it and to be the second most popular destination in Europe for this industry in the past five years is an impressive achievement. This growth will likely continue and even intensify in the years to come."
The three biggest fintech deals in Stockholm in 2014 were worth over $100m, with Klarna receiving the lion’s share of $125m investment followed by iZettle ($55.5mn) and Trustly ($28.8m).
Prominent investors include Intel Capital, Mastercard and American Express Ventures while local support comes from the likes of NFT Ventures, a specialty venture capital firm focused on fintech in the Nordics with Stockholm as its base.
In terms of employment, the industry is estimated to employ 4,600 full time employees (as of 2014), with fintech roles increasing by 44% from 2010 to 2013.
Daniel Blomquist, partner at venture capital firm Creandum, says: “I think what makes Stockholm unique is that we have a high level of execution intelligence here. This combined with our bottom-up Scandinavian management style enables firms to successfully navigate the many uncertainties in today’s financial services.”