Despite Covid-19, FinTech investment in the Nordics continued to go from strength to strength in 2020.
FinTech companies in the Nordics raised nearly $1.6bn last year with Klarna contributing more than half of that amount
- FinTech investment in the Nordics recorded strong growth between 2016 and 2019 as investors backed the strong entrepreneurial scene in the region to solve challenges in financial services related to digital transformation and customer acquisition strategies. In that period, total funding grew at a CAGR of 62.5% from $253.2m to over $1bn at the end of last year.
- Deal activity also increased during the period, peaking at 109 transactions in 2018 before slowing down to 80 in 2019. However, that year FinTech companies in the region raised a record amount of capital, nearly $1.1bn, mainly driven by a massive $460m funding round completed by Klarna, the Swedish digital payments and e-commerce giant.
- FinTech investment growth in the region powered through to a record breaking 2020 despite the coronavirus uncertainty. FinTech companies raised $1.59bn last year, a growth of 46.3% year-on-year compared to 2019. However, again Klarna was responsible for the main chunk of that growth as the company raised 53.5% of that funding via two large deals raising $650m and $200m in September and January, respectively.
- If we look at the capital raised coming from deals under $50m there are signs that the FinTech industry in the Nordics is consolidating. Funding in that deal segment had remained stable at around $340m since 2017 before shrinking to 304.4m last year. Coupled with the decline in deal numbers from the peak in 2019. it looks like investors are turning to other markets to find new early-stage opportunities as some of the FinTech giants in the region such as Tink, Klarna and iZettle could be stifling innovation.
Swedish companies raised six of the top ten FinTech deals in the Nordics last year
- The top ten FinTech deals in the Nordics in 2020 raised in aggregate just over $1.4bn, making up 89.2% of the overall investment in the region during the year. The high levels of concentration of capital in large deals is to be expected given the massive deals raised by Klarna and investors scaling back on early stage investment risk due to increased economic uncertainty post Covid-19.
- Swedish companies took two of the top three spots on the list with Klarna raising the two biggest deals so far this year. The top three was rounded off by Kodit.io, a Finnish PropTech offering home sellers “fair cash offers” for their properties within 24 hours, which raised €100m to scale its reach in existing countries, while expanding into new geographies.
- Danish FinTech companies also had a strong representation on the list with three funding rounds taking place in the country. The largest deal was raised by Lunar, a digital challenger bank, which closed a €40m Series C round. Funds from the round will be used to help the company enter the “buy now, pay later” space.
The data for this research was taken from the FinTech Global database. More in-depth data and analytics on investments and companies across all FinTech sectors and regions around the world are available to subscribers of FinTech Global. ©2021 FinTech Global