FinTech Investments in the Nordics hit a five quarter high in Q1 2017

Nordic FinTech companies raised $122m in the first quarter of the year, more than 6-times the total funding in Q1 2016

Despite fluctuations in FinTech investments in 2016, the Nordic region had a strong start to 2017 with funding levels in Q1 growing nearly seven times compared to Q1 2016. This jump in investments can partly be attributed to Swedish payments giant iZettle, which raised more than $60m in January across a $15.9m Series D and $47.6m debt financing rounds. Q1 2017 also saw other companies raising rounds in excess of $10m, with Norway’s Xeneta and Sweden’s Qapital picking up $12m each. However, the signs for the FinTech industry in the region are not all positive. Despite an increase in quarterly deal numbers during the first three quarters of 2016, the last two quarters saw a pullback in FinTech transactions in the area.

Total FinTech Investment to the Nordics has been declining year-on-year

  • Total FinTech funding in Nordic companies has fallen continuously year-on-year. However, this is mostly due to a fall in deals valued above $40m, which generally are ‘lumpier’ than smaller deals over time. In 2014 56% of all investment in Nordic FinTech came from only two deals, with payments companies iZettle and Klarna raising $55.5m and $115.8m, respectively.
  • If we exclude deals over $40m then total FinTech funding in the region actually increased from $131m in 2014 to $230m in 2016, showing the great traction of the Nordic FinTech ecosystem.
  • Additionally, the number of total deals grew at a CAGR of 30.95% between 2014 and 2016. This is mainly due to the increase in earlier-stage deals valued under $20m which grew at a CAGR of 30.6% between 2014 and 2016.
  • Q1 2017 was a particularly good quarter as Nordic FinTech companies received more than half of the total funding in the whole of 2016.

Sweden’s deal share has consistently increased since 2014

  • Nearly two thirds of Nordic FinTech investments went to companies based in Sweden in 2016, an 18.5% share increase since 2014.
  • The share of deals to Finnish companies has been steadily falling since 2014 in contrast to a steady increase in the share of Danish deals in the same period.
  • Q1 2017 saw investors pull back on deals in Danish FinTech companies in favour of those based in Finland and Norway. As a result, Norway, Finland and Denmark received an equal share of deals in Q1 2017.

Payments & Remittances, WealthTech and Infrastructure & Enterprise Software companies received 65% of all FinTech deals in the Nordics since 2014

  • The Payments & Remittances Sector received the highest number of deals between 2014 and Q1 2017. The largest deal to the sector went to E-Commerce payments platform Klarna, which raised $115.8m in Q2 2014.
  • Whilst Sweden is home to arguably two of the most successful payment companies in Europe; i-Zettle and Klarna. Norway, Finland, Iceland and Denmark are all home to successful payments companies of their own. In 2016 Finland’s Wolt raised $12.5m, Norway’s PreGo raised $7m, Denmark’s Bancore raised $6.7m, and Iceland’s Handpoint raised $3.4m. Apart from Handpoint which specialises in Point of Sale technology, each of the remaining companies concentrates on processing Mobile Payments.
  • A further 23% of deals went to companies specialising in Funding Platforms, Marketplace Lending, Data & analytics and InsurTech.

The data for this research was taken from the FinTech Global database. More in-depth data and analytics on investments and companies in the Nordics as well as across all FinTech sectors and regions around the world are available to subscribers of FinTech Global. ©2017 FinTech Global

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