My presentation on the Stockhlm FinTech Cluster in Sept 2015

1. Stockholm FinTech
An overview of the FinTech industry in the greater Stockholm Region
Robin Teigland
Stockholm School of Economics
robin.teigland@hhs.se
September 2015

2. Banking is
essential,
but banks are not.
Bill Gates

3. In just the past few years in Stockholm…
Company Founded Business
Klarna 2005 E-commerce payment services
MyLoan 2006 Loan broker
Trustly 2008 Online payments
TrustBuddy 2009 P2P lending
iZettle 2010 Mobile payments
FundedByMe 2011 Crowdfunding, crowd equity
Kivra 2011 Digital mailbox
Tink 2012 Personal finance
Safello 2013 Cryptocurrency exchange
KnCMiner 2013 Cryptocurrency mining equipment
Toborrow 2013 P2P lending for companies
Cryex 2014 Cryptocurrency clearing house

4. High concentration of
FinTech companies
around downtown
Stockholm

5. 1950 1960 1970 1980 1990 2000 2010
1959,
Bankgirot
founded
1985, Swedish
financial and credit
markets deregulated
1968, World’s first
online ATM in
Sweden
First wave of electronic trading
software companies emerges
2003, First
BankID issued in
Sweden
1990s, Sweden invests in Internet
infrastructure, today country with 3rd
highest Internet penetration
2010, iZettle
founded
2010, Neonet
$160M exit
2014,
iZettle
raises
$55M2014, Klarna raises
$125M in PE
1967, First ATM
installed in
Sweden
1984,
Optionsmäklarna
(OM) opens in
Stockholm, Sweden’s
first stock option
market, electronic
trading introduced
2012, TriOptima,
$160M exit
2005, Klarna
founded
1998, Merger
between
Stockholm’s
Stock Exchange
and OM
Stockholm
2007, NASDAQ
acquires OMX Group
Unicorns such as Skype, King, Spotify
and Mojang founded
2014, FinTech
Funding in
Stockholm
Explodes
Long history of “FinTech” in Stockholm

6. Stockholm #2 FinTech city in EU
2010-2014 investment
● #2 EU city with 18% total
● 31 investments - $532 M
● 8 exits - $381 M disclosed
2014 total investment
● 15 investments - $266 M
● 50% of 5 year investment total
● 3 exits (2 undisclosed) = $20 M
Top 2014 Investments in Stockholm
FinTech Companies (Mln)
Klarna $ 125
iZettle $ 55
Trustly $ 29
Bima Mobile $ 22
KNC Miner $ 14 ($ 29)
● 2014 FinTech investment in
Stockholm is 32% total investment
in Sweden
● But Stockholm FinTech workers
only ~0.05% of Sweden’s
population

7. ”New” FinTech on par with ”Old” FinTech
Trading & Banking Tech
● Classic heavyweights,
real base of Stockholm
FinTech
● Mix of new entrants in
past 10 years helped
drive growth
Payments
● New heros, currently
primary growth driver
● Received $470 M or
88% of FinTech
investments in past 5
years
2013 FinTech revenue in Stockholm
Cryptocurrency
0%
Transfers
2%
Innovative
Lending
5%
Wealth
Management
9%
Other FinTech
12%
Payments
33%
Trading &
Banking Tech
39%

8. International investors noticing Stockholm
0
5
10
15
20
25
30
2010 2011 2012 2013 2014
NumberofInvestors
Year
Other
US
EU (Excluding
Sweden)
Sweden
Where do investors come from?
0
5
10
15
20
25
30
2010 2011 2012 2013 2014
Year
# of
investments
# of Firms
investing in
Sthlm FinTech
Companies
Annual investment numbers for Stockholm
FinTech companies

9. Stockholm – The Ideal FinTech Location
● The Nordic tech and financial hub
● Supportive local startup ecosystem
● High-tech early adopters provide test market
● Natural global focus
● ”Down-to-earth” Swedish leadership style
● Relatively low wage costs
● Strong government and social security benefits

10. FinTech – An increasingly crowded space
• Growing number of entrepreneurs with experience from
established finance industry
• Increasing number of FinTech incubators
• Collaboration among established banks
• Open innovation through open APIs
• Other big non-banking entrants

11. Major actors running incubators
Actor Incubator Location
Citi Mobile Challenge Americas, EMEA,
Asia Pacific
DBS & Nest Investment Accelerator Hong Kong
Wells Fargo Startup Accelerator USA
Accenture and Bank of America, Merrill
Lynch, Barclays, Credit Suisse,
Deutsche Bank, Goldman Sachs,
HSBC, JPMorgan, UBS
Innovation Lab NY, London, Hong
Kong
“Innovation labs are a sign that banks are taking the FinTech threat
seriously as they recognize that we’re coming to eat their lunch.”
-FinTech Entrepreneur

12. Betting on the Blockchain - Together
Goldman Sachs, JPMorgan,
Credit Suisse, Barclays,
Commonwealth Bank of Australia,
State Street, RBS, BBVA, UBS
+

13. Opening up innovation…
Citigroup Capital One
BBVA Compass Silicon Valley Bank
Bank of America

14. IBM + Samsung

15. If the rate of change on the
outside (of an organization)
exceeds the rate of change on
the inside, the end is near....
-Jack Welch
Our FinTech report is here: http://www.slideshare.net/eteigland/stockholm-49722748

16. Robin Teigland
robin.teigland@hhs.se
www.slideshare.net/eteigland
www.funnovation.se
@RobinTeigland
If you love knowledge,
set it free…
If you like this presentation and would like to contribute to our research, we
accept bitcoins: 14hs4JbnQLXE87GGzu84uXGaspmxmnLpwC.
Thank you!!!!!

17. Under-representation in reports
● Before 2014 Stockholm investments were small
● VC vs PE, Stockholm is PE heavy
● Certain databases simply missing information
● London suffers also, $ 539 M self-reported often higher
than attributed numbers

18. Consistent exits
Name Year
Total Value of
Company at Time of
Exit (USD M)
Comments
Lendo 2010 $29 51% to 97% by Schibsted Growth
Neonet 2010 $158 Acquired by ORC
TriOptima 2012 $159 ICAP Group Holdings 38% to 100%
Shareville 2013 undisclosed Majority Stake Sold to Nordnet
TrustBuddy 2013 $15 100% to 360 Holdings AB
MPS 2014 undisclosed Acquired by Cidron SuperPay AB
Payson 2014 undisclosed Acquired by SveaEkonomi
TradeTech 2014 $20 Acquired by Virtusa
DIBS 2014 $107 Delisted/Acquired by Nets

19. Segments
Cryptocurrency: Bitjoin, ChromaWay, Cryex, KnCMiner, Safello
Innovative Lending: Consector, Crowdculture, Emric AB,
FundedByMe, kortio, Lånbyte.se, lendify, Lendo AB, Myloan (owned by
Insplanet), qvido, Toborrow, Trustbuddy
Other FinTech: Algorithmica, BehavioSec, Bimamobile (Milvik AB),
Bolånegruppen (Our Interest AB), Mopper, ORC Group/Orc Software,
Pantor, Tbricks, TriOptima, Zenconomy, Trema
Transfers: Seamless Distribution, Swish (GetSwish AB)

20. Segments (cont'd)
Payments: Accumulate, Allopass, Babs Paylink, betalo, Billhop, iZettle,
Klarna, Mondido, MPS (Mobile Payment Solutions), PayAir, Payex,
Payground, Payson, Prello, Qliro AB, Seamless Payments, Trustly,
Vaulted Payments, wywallet (4T Sverige)
Trading & Banking Technologies: Aphelion, Camerontec, Cinnober,
CMA Small Systems, Neonet, Nordnet, OMX Technology, Shareville
(part of Nordnet), SunGard Front Arena
Wealth Management: Avanza, InsPlanet, Qapital, Tink