Mapping early stage FinTech in the Nordics

Although I’ve been delving into different verticals over the past couple of years, it seems FinTech is a sector that I’m constantly drawn back to. While the frenetic FinTech hype of 2015–2016 seems to have died down, i’m a firm believer that we’re still in the early days of software domination in the world of finance.

We will see fundamental changes to our financial institutions by optimizing and automating the archaic processes that are still draining consumers and businesses today. Companies like Klarna and iZettle have brought exponential improvements to areas such as payment processing, while proving that Nordic companies can rival giants like Stripe and Square.

However, the next generation of up-and-coming FinTech startups will focus on more niche problems, such as back office administration (e.g Hiveonline) or financial budgeting for young families (e.g Ernit). New developments in areas of blockchain and machine learning will only serve as leverage for these companies to not only offer more specified solutions, but to reach and disrupt previously uncontested financial systems.

The Nordics continue to be a particularly attractive region for FinTech, which is evident in the 250% increase in funding from 2016 to 2017 alone.

To provide a better overview of where some of this capital is allocated, I decided it’d be interesting to map out the local early stage FinTech space:

As exemplified above, there is a lot of diversity within the vertical, but with larger capital allocations for consumer and investment related services. Of the approximately 80 deals in 2017, about half were first time checks in pre-seed and seed stage companies.

While Sweden continues to dominate, the rest of the region is finally catching up to consolidate the Nordics as a globally competitive FinTech hub.