This document describes the Sweden FinTech landscape, approaching the analysis from a FinTech, regulatory, Investment and talent standpoint. This document serves as a snapshot of the key pillars of a FinTech ecosystem in a country and provides a good overall view of the state of FinTech at a glance.

1. Industry
Associations
► Swedish Financial
Technology
Association
► SVCA Sweden
► National Innovation
Council
► Life Science Village
Overview
Sweden is one of the important tech hubs globally and is house to unicorns like Spotify, Minecraft
and Klarna. According to OECD, Sweden has 20 startups per 1000 employees as compared to
just five in the US. Sweden-based point-of-sale (POS) service provider, iZettle, was bought by
PayPal for US$2.2bn in one of the largest FiInTech deals of 2018. In 2017, Sweden-based
payment company Bambora was sold to Ingenico Group €1.5bn. Sweden is one of the leading
cashless economies in the world. According to The Riksbank, Sweden’s central bank, only about
2% of the total value of transactions in Sweden is estimated with cash and the same is expected to
dip to below 0.5% by 2020. According to the UN, more than 80% of Swedish citizens use e-
government services.
FinTech Ecosystem
FinTechs
Stockholm FinTech hub was established in 2016 to support in creation of a well-rounded
and supportive ecosystem where Fintechs can flourish. In Jan 2018, the hub was renamed
as FinTech Hub as it aims to unify with Nordic and Baltic FinTech ecosystems. According
to association there are 188 FinTechs in Stockholm Greater Area, a 5-yr CAGR growth of
21%. Key FinTech sub sectors include payments, consumer lending, brokerage and
wealth. Klarna, the biggest Swedish payments start-up picked up a full banking licence
from Finansinspektionen, the Swedish Financial Supervisory Authority.
Payments Unicorns such iZettle, Klarna besides platforms including Trustly and Swish
app, enabling peer-to-peer payments, have also been a major catalyst in Sweden rapidly
evolving as a cashless society. In 2012, six Sweden’s largest banks and some smaller
savings banks launched Swish. At a volume of 275mn transactions in 2017, Swish is one
of the most successful Payments app in Sweden.
Regulators
Businesses that tend to provide financial services generally have to obtain licenses from
and under the supervision of Sweden Financial Supervisory Authority (FSA). In May 2017,
the Swedish Government has given the FSA an assignment to facilitate FinTech
innovation. The innovation centre will serve as the first point-of-contact at the FSA for
FinTech companies that are unsure of the rules, processes and principles that apply on the
financial market in conjunction with innovation.
Some of the key regulatory frameworks for payments and lending include the banking and
financing business act, electronic money act and payment services act among others.
The FSA is taking measures such as engaging in discussions with market participants to
develop regulations and policies that shall nurture the FinTech innovation in the country.
In 2015, the FSA also issued a report on crowdfunding, highlighting the problems and
inconsistencies in the Swedish laws.
Sweden
► Digital Payments
► Blockchain
► Lending
F O C U S

2. Key takeaways
Riksbank, the central bank of Sweden, is also taking steps to create a growing FinTech
ecosystem. For example, Riksbank is preparing to launch its own digital currency e-krona by
2020 that can be used for small purchases – to complement the declining use of cash.
In 2018, Stockholm launched a regulatory sandbox to encourage FinTechs to discuss their
ideas and seek guidance directly with regulators. This sandbox shall also enable FSA to
facilitate FinTech innovations and develop policies that promote a conducive environment.
Government has taken number of initiatives to help start-ups including physical spaces
enabling co-working, one of fastest broadband speed in the world, BankID project and e-
government services.
Investors
In 2017, the FinTech companies in Sweden raised US$358m across 59 rounds.
Swedish banks have set up accelerators and VC funds to finance the FinTechs in the region.
For instance, the Swedbank has set up a FinTech accelerator and collaborates with firms to
run its own app and open banking platform. Nordea bank has also set up its venture arm to
support FinTechs in the region.
State-owned agencies like ALMI and Vinnova also provide funding for start-ups. For
instance, ALMI, a European investment fund, offers loans, venture capital and advice to
existing companies in early stages with growth potential. Vinnova, Sweden’s innovation
agency under the Ministry of Enterprise, Energy & Communications invests US$240m
annually in various initiatives. They also plan to contribute US$240k in a Stockholm FinTech
Hub strategic project for a period of 2 years (May 2017 – May 2019) to strengthen the
FinTech ecosystem.
Talent
The Swedish Fintech success is majorly credited to the culture and the talent in the country.
More than 40% of the population has a 3-year university degree at a minimum. Stockholm is
a hotspot for technology talents, with unique access to high in-demand front-end technology
skills from both international and national workforce. It has more User Interface Designers,
Software Engineering Management and Strategic Planning experts than any other European
Country.
Presence of a tenured technology community and successful unicorn stories in the country
have encouraged a virtuous cycle of grooming and attracting technology talents from all over
the world. In 2015, the City of Stockholm and the region’s leading tech companies launched
the initiative – Move to Stockholm to attract tech talent.
Grants and trainings are also being provided by the government to nurture a FinTech ready
talent. For instance, ALMI provides the initial grant which is not needed to pay back if the
funding is used in the right purpose. Vinnova provides funding through a range of grants
aimed at different industries.
Universities are also setting up incubators and innovation hubs to encourage the talent
development at an initial stage by providing financing or free office space at the incubator
along with a broad expert/investor network. Lund University, a leading Swedish education
institution set up an innovation hub to implement business ideas using innovation.
Investors in the
region
► ABN Amro
► Accel Partners
► Alfven and Didrikson
► Creades
► EQT Ventures
► Industrifonden
► NFT Ventures
► Nordea
► Northzone
► SEB Venture Capital
► Sunstone capital
► Victory Park Capital
• The legacy for innovation in the Swedish culture along with early adoption
of technological solutions by the consumers has been a major reason
behind the rapid growth of FinTech in the country; There are a number of
unicorns in the country that act as role models and provide guidance to
start-ups
Varun Mittal
Global Emerging Markets
FinTech lead
varun.mittal@sg.ey.com
Contact us
www.ey.com/sg/FinTechHub
FinTech Hub