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Fintech investment overview: A new, Nordic frontrunner and two technologies on the rise

@rasmus

A fabled animal – and valuation – came out of the Nordic fintech scene and toppled the reigning investment champ, Sweden. Denmark came out ahead in 2018, but the Swedes may make a blockchain powered comeback on the back of AI.

A fabled animal – and valuation – came out of the Nordic fintech scene and toppled the reigning investment champ, Sweden. Denmark came out ahead in 2018, but the Swedes may make a blockchain powered comeback on the back of AI.

As a year turns it affords the possibility of looking back and take stock of the year passed. And what a year it was for for the entire Nordic fintech scene. Among a host of highlights the former saw its first fintech unicorn as Tradeshift closed a round, which was joined by Goldman Sachs.

But there is no getting around it. When it comes to investments and fintech companies in the Nordic region – for now – there are two fintech frontrunners: Denmark and Sweden. Last year the championed the art of attracting the most fintech funding. The question remains though: Did the Swedes manage to keep the first place once again?


As the graph shows they did not. Denmark – and by quite a large margin – managed to grab the throne. But as a famous saying goes: “Statistics are like bikinis. What they reveal is suggestive, but what they conceal is vital.”

Had Tradeshift’s monster round at 213 € not happened Denmark would still be tailing behind Sweden, but the same could be said for Sweden’s total last year. The numbers are not yet in from Finland and Norway unfortunately.

Denmark: The dawn of the fintech partnerships

Reaching a critical mass of users is just as important for fintech startups as any other. Incumbent financial institutions have scores of customers. By entering partnerships or white-label solutions the two can benefit immensely. 2018 has been a record year for partnerships for the Copenhagen Fintech Lab’s residents. With good reason according to Thomas Krogh Copenhagen Fintech CEO.


“The main reason that we see more partnerships is that both types of companies see the value and the win-win opportunities in working together – instead of fighting against each other. Furthermore many fintechs are faced with taxing regulatory demands, which take more resources than a startup can afford, ” Krogh says.

Therefore the smaller fintechs partner with already regulated organizations and sidestep the regulatory process. The larger entities on the other hand gain access to cutting edge innovation. But other than solving each others’ immediate pain points the partnerships need to be sustainable.

“The definition of partnerships is up for debate. Larger financial institutions might use a startup’s product. But furthermore a partnership needs to defined in such a way that the idea behind the relation is for both parties to solve challenges together over a longer period of time,” Krogh highlights.

Krogh believes that the trend will continue to gain momentum in 2019 as Copenhagen Fintech as the association leverage their sponsors and partners’ reach.

“The network acts – in a sense – act as scouts and guides startups towards relevant financial institutions. Furthermore, our different startup-programs offer direct access between startups and larger companies. Lastly,  we will try to create international partnerships that span national borders through our Global Fintech Alliances program,” Krogh says.

AI and Blockchain dominates Swedish fintech investments

When pressed artificial intelligence is a lever that is said to improve customer service and efficiency. In fact, it is to transform the financial landscape. Combine that with blockchain, a dash of financial services and innovation and you have yourself a powerful cocktail.

One that investors in Sweden have been sipping on – or well rather gulping down – for the last year.

An example of the strides that AI is taking is Lysa. Stockholm-based startup that provides asset management services that runs on robot advising landed a round twice the size (4 million euros) of the one they had the year before that.

While investments in Blockchain were plentiful the none of them exceeded one million euros. Enigio came halfway as the startup were on the receiving end of a seed-round at 0,57 million euros. They offer a blockchain based digital solution that replaces the need for paper where an original is legally required.

If the investments will help the Swedes to reclaim their position as first in the fintech investment game – only time will tell.

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