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FinTech Hubs: Stockholm A.K.A The "Unicorn Factory"

Often when people talk about fintech, you will hear the term “Unicorn” being thrown around. A “unicorn” is a startup that’s valued at over $1 billion and is a reference to the mythical one-horned horse which highlights the rarity of ventures reaching this kind of success.

However, Stockholm seems to have mastered the formula to producing $1 billion dollar startups, earning it the nickname “Unicorn Factory”. It has the 2nd highest startup unicorns per capita in the world. Many of the names, like Skype, Spotify and Klarna, you will instantly recognise.

Klarna, in particular, is a hot topic these days. Open any fintech news site and this online payments platform with a twist, will pop-up. The company allows you to buy now and pay later, “separating the buying from the selling” (as CEO Sebastian Siemiatkowski puts it). This credit concept has seen the company reached success of epic proportions. Klarna was valued at $2.2b in 2015, recently obtained a full banking license and partnered with Visa in a strategic move to expand outside of its core market.

The Nordic countries as a whole have become a very prominent business stronghold, producing more than half of Europe’s billion dollar exit strategies through IPO’s, M&A’s, and buyouts. Stockholm is at the centre of this and is recognised as the top performing financial city within the Nordic territory.

The Swedish capital has also become renowned for innovation and technology and there are a number of factors that have supported its growth into a leading fintech hub, enabling it to punch way above its weight.


The city attracts fintech investment from all over the world. Some big names include American Express Ventures and Intel Capital. It accounts for one fifth of total fintech investment in Europe. Not bad for a city that ranks at number 20 in terms of city size in Europe, with a population of just over 910,000 (in the city itself).

But don’t let its small stature fool you. 2014, in particular, was a pivoting point for fintech investment in Stockholm, reaching $280m.

What makes this really impressive is the fact that the total for the previous five years was around $530m. That means in one year alone, fintech investment surpassed more than half of the combined total for the previous five years.

This figure includes $55m invested in iZettle, which offers a range of financial products such as a powerful point of sale system and contactless card technologies. Close to $30m was invested in Trustly, an online platform that enables you to shop and pay from your bank account, making transactions quicker and more secure.

But the biggest investment magnet was Klarna. $125m was invested in the company in 2014 and, as we mentioned earlier, it continues to make waves around the world. With 60,000,000 customers and total transaction volume at 470,000,000, it truly is a fintech export that Stockholm can be proud of.

Investments in the payments sector have evidently attracted the most of the funding in recent years. And the effects are clear. Sweden is breeding a cashless society, with less than 2 percent of payments made using cash in 2015.

However, the trading industry is not trailing too far behind. SunGard’s Front Arena helps traders and brokers to manage risk in global capital markets. The company got awarded “Best front-office trading system” in Banking Technology’s 2015 Readers’ Choice Awards.

Aphelion is a leading online FX trading solution, which endorses super-fast trades through supreme hardware, top tier network access and integration of real-time technology. The company collaborates with some of the biggest banks on the planet, including Barclays, Morgan Stanley and BNP Paribas.

The personal finance sphere is also enjoying a bit of attention. Qapital raised $12m earlier this year in Series A funding and Tink attracted $10m in its Series B funding in 2016.

World-Class Talent

Stockholm employers are spoilt for choice when it comes to talent acquisition. Tech companies have the convenience of choosing from a highly-skilled workforce, with more than 40% of the population having a 3-year university degree as a minimum.

Apart from the local talent pool, Stockholm also relies heavily on foreign workers for the fintech industry. Thankfully, Sweden as a whole does lend a helping hand to ensure the capital keeps enticing skilled employees from around the world to live and work there. The country has been voted the best place to raise a family and companies offer flexible working hours (essential for that all-important work-life balance). Another key ingredient is English, which is widely spoken across Sweden, specifically in Stockholm.

Stockholm also has a very strong entrepreneurial ethos where success generates success. This attracts other entrepreneurs who feel that they can learn from, and feed of, the accomplishments of their predecessors. The established players in turn invest in younger startups and are not scared to share their knowledge. This willingness to help each other out is what has driven the growth of the fintech industry in this small Nordic city.

Institutional and Governmental Support

In order to maximise the success rate of fintech startups, they need a lot of support from external parties. And Stockholm is embracing this concept with open arms.

Stockholm Fintech Hub is a dedicated physical space for communication, collaboration, and cooperation, tailored to the specific needs of the fintech community. It partnered with the likes of Visa and KPMG to support and drive innovation across the Nordic region. The fintech centre launched earlier this year and shows Stockholm’s dedication to becoming a world leading fintech hub.

In addition, the Stockholm-based incubator, STING (Stockholm Innovation and Growth Hub), has worked with over a 180 startups and is dedicated to providing a “faster path from idea to global company”. This incubator is set to join forces with Stockholm Fintech Hub.

Government authorities are also doing its bit to support the Stockholm fintech sector. The technology fire in Stockholm was lit by the government’s initiative of a tax subsidy for buying personal computers in the 1990’s. This meant younger generations were very familiar with computer software and extremely comfortable with digital technology. By 2000, as many as 76% of Swedish households had a personal computer. They also had one of the highest internet and smartphone penetrations in the world. Looking back, it’s not surprising that Stockholm developed into a booming tech city.


Up until a few years ago, Stockholm would not have been on many people’s radar when talking about fintech hubs. However, the Swedish capital has proven it is a city of innovation. Entrepreneurship and success are not necessarily celebrated but rather shared to push the “unicorn factory” to new heights throughout 2017.

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