Large funding rounds in Q1 set Nordics FinTech funding for a record year

Last quarter saw more than double the level of investment from deals valued at $50m and over than the whole of last year

 

  • Total capital raised by Nordic FinTech companies reached $181.8m in the first three months of the year. The funding is already at 74.3% of last year’s level, setting 2019 on track to beat 2017’s record year. This strong start to the year can be attributed to two funding rounds, which together raised $128.8m, making up 70.8% of the total value invested in this quarter.
  • The largest round last quarter was Tink’s €56m Series D round. The Stockholm-based startup builds consumer facing APIs for Financial Institutions. These APIs offer financial services including Account Aggregation and Personal Finance Management. The round was led by American venture capital and private equity firm Insight Venture Partners. The CEO and co-founder, Daniel Kjellén, reported that the latest capital injection will be used to, “accelerate our European roll-out but also invest further in our data services.”
  • The second largest round was €48m raised by Bynk. Using the Bynk app customers can take out and then manage mobile loans. The Stockholm-based lender, which was launched in 2017, plans to use the funding for European expansion as the company continues to build their brand and release new products.
  • The number of deals in Q1 2019 was 13, which is equivalent to 24.5% of last year’s total level.

FinTech investment in the Nordics in Q1 2019 was substantially higher than any quarter in 2018

  • Total capital raised by FinTech companies in the Nordics last quarter was at least 70% higher compared with any quarter last year. There have already been two transactions valued at over $50m completed this year, compared to just one deal in this bracket in 2018. This large deal last year was Mash’s €50m funding round. The company offers proprietary algorithms, machine learning capabilities and an automated platform to deliver superior finance and payments solutions to thousands of customers.
  • Deal activity in the Nordics, which declined in every quarter last year, increased from a low of just seven funding rounds in Q4 2018 to 13 transactions in the first three months of the year.
  • The third quarter was the weakest in 2018. There was just $16.4m raised across 10 deals.

Nordic companies in the Payments & Remittances subsector attracted almost one in every four deals since 2014

 

  • Payments & Remittances companies have driven the growth of FinTech investment in the Nordics, raising 47.0% of the total investment in the last five years. They are also the most active companies in terms of deal activity, attracting 23.2% of total deal share in the last five years. The two largest transactions in this subsector, valued at $225m and $125m, were completed by Stockholm-based Klarna. Klarna, which provides digital payments solutions for businesses, is the only Nordic-based FinTech company to have raised a funding round valued at over $100m. The company was granted a full banking licence by the Swedish Financial Supervisory Authority in June 2017.
  • Companies in the WealthTech and Infrastructure & Enterprise Software subsectors are also pivotal to the growing FinTech landscape in the Nordics, with the subsectors taking the second and third top spots both in terms of total amount invested and deal activity since 2014. In fact, total amount invested in the Payments & Remittances, Wealth Tech hand Infrastructure & Enterprise Software makes up more than 70% of the total capital raised since 2014. The biggest round in the WealthTech subsector is Tink’s previously mentioned Series D round, which took place earlier this year. A large deal raised by an Infrastructure & Enterprise Software company was Zervant’s €6m Series B round. The Finland-based company offers free, unlimited invoicing to Europe’s entrepreneurs and small business owners.
  • Approximately, two out of every 50 deals have been raised by Cryptocurrency companies. Bitcoin mining firm KnCMiner AB raised $32m across 3 transactions, which made up 71.2% of total value invested in the subsector since 2014 in the Nordics. London-based investment firm GP Bullhound and American venture capital firm Accel each took part in two rounds. KnCMiner declared bankruptcy in 2016.
  • The Other subsector, which makes up 9% of deal activity, is comprised of companies operating in the Data & Analytics, Blockchain, Real Estate and Institutional Investments & Trading subsectors.

Swedish companies are driving the growth in total funding

  • The share of deals raised by Swedish companies peaked at 62.5% in 2016 and decreased to 41.5% last year. Additionally, all but one of the 15 largest transactions completed since 2014 in the Nordics were raised by companies based in Sweden.
  • The second most popular country for deal activity has alternated between Denmark and Norway since 2015. However, companies in neither of these countries have obtained a deal share higher than a quarter since 2014. The average deal size in Denmark ($4.0m) is noticeably larger than in Norway ($2.8m).
  • FinTech companies in Iceland had a strong start in 2019 and attracted 7.7% of deal activity in the first three months of the year. This is much larger than Iceland’s total deal share in any of the last five years, which has not reached more than 4.0%. A large round this year was Authenteq’s $5m Series A round. The company is a digital identity and authentication platform and part of its most recent funding round will be used for hiring more people.

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. ©2019 FinTech Global

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