Late-stage deals pushed FinTech investment in the Nordics to record levels in 2017

Nordic FinTech companies raised over $600m in 2017

  • Nordic FinTech deal volume remained little changed between 2014 and 2015 with 58 and 59 deals recorded, respectively. However, total investment dipped by 7.7% from $311.1m to $287.2m during the same period.
  • Despite a significant uptick in activity to 141 deals in 2016, Nordic FinTech funding grew by only 0.9%. This was mainly caused by more early-stage transactions such as the $10,000 seed investment that Lenovium, a Swedish banking risk management solutions provider, received from Nordea Startup Accelerator in Q3 2016.
  • The Nordic region recorded only 78 deals in 2017 but FinTech funding more than doubled to $620.6m. The bullish funding landscape for Nordic FinTech companies last year was driven by later stage transactions such as Klarna’s $225m private equity funding from Permira in Q3.

Q3 2017 was the strongest quarter to date bringing in nearly 50% of all funding for the year

  • Investment in Nordic FinTech companies reached $134.6m in Q1 2017, a substantial 3.7x growth compared to the previous quarter. This higher level of funding was driven by iZettle, which raised $47.5m in debt finance from Victory Park Capital.
  • Compared to previous quarters, FinTech investment surged in Q3 2017 to $290.2m. However, almost 90% of Q3 investment was driven by the aforementioned private equity funding that Klarna secured and iZettle’s $35.8m debt facility from the European Investment Bank.
  • Q4 2017 deal activity remained unchanged from the previous quarter, with 10 deals raising $128.8m. Three of the 10 deals in Q4 were valued above $15m, with iZettle’s $55.4m Series E round being the largest. As the FinTech landscape in the Nordics continues to mature, we may see fewer but larger transactions going forward.

Nordic FinTech deal sizes have been increasing, as the funding landscape shows signs of maturity

  • Sub-$5m deals have dominated the Nordic FinTech funding landscape over the past four years, growing from 76.5% of deals in 2015 to 91.4% in 2016, before dipping last year to 70% of deals.
  • Despite smaller deals taking the lion share of deal activity across the Nordics in 2016, there were still some larger capital raises that year. The biggest deal of the year was the $67.0m venture funding that Pomegranate, a Swedish investment platform, raised from Sarava in Q1.
  • Last year showed signs of a maturing funding environment for Nordic FinTech companies with 23.3% of deals valued above $10m, compared to a share of just 4.3% in 2016. One of the deals in the $10 – $25m deal size bracket is the $12m Series B funding that Xeneta, a Norwegian data & analytics provider, raised from Smedvig Capital, Alliance Venture and Creandum in Q1.

The top 10 FinTech deals in the Nordics raised almost 80% of the total capital invested in the region last year

  • The top 10 largest FinTech deals in the Nordics collected $489.3m in 2017, 78.9% of the total capital raised across all FinTech deals in the region last year. This ratio increased from 62.3% in 2016, as investors are now investing across fewer but larger FinTech deals in the region.
  • Nine of the largest 10 investments went to Swedish companies with iZettle raising $154.6m across four deals in 2017. The company currently has operations across 12 markets in Europe and Latin America and plans to use this additional capital to fund its expansion into new markets. Helsinki-based Nosto’s $17.1m debt financing was the only top 10 investment outside of Sweden last year.
  • Seven of the top 10 Nordic deals in 2017 were Series D and above or debt investments, with Swedish InsurTech company, BIMA, raising $36.2m in Series D funding led by Allianz X.

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. ©2018 FinTech Global

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