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LONDON — More startups are being spun out of Swedish digital payments firm Klarna than any other financial technology unicorn in Europe, according to a new report from venture capital firm Accel.
Accel’s “Fintech Founder Factory” report shows that alumni from Klarna have gone on to create a total of 62 new startups, including the likes of Swedish lending technology firm Anyfin, regulatory compliance platform Bits Technology and AI-powered coding platform Pretzel AI.
That is more than any other venture-backed fintech startup worth $1 billion or more in the region.
This includes the digital banking app Revolut, whose former employees have founded 49 startups. It also includes money transfer app Wise and online-only bank N26, where ex-staff at both firms have started 33 companies each, according to Accel’s data.
‘Founder factories’
Accel labels these companies “founder factories,” on the basis that they have become breeding grounds for talent that often go on to establish their own firms.
“We now have a very long list of large, durable, successful companies in Europe across the different ecosystems — including London, Berlin and Stockholm — that have been generating interesting outcomes,” Luca Bocchio, partner at Accel, told CNBC.
Out of 98 venture-backed fintech unicorns in Europe and Israel, 82 have produced 635 new tech-enabled startups, according to Accel’s report, which was published Tuesday ahead of a fintech event the firm is hosting in London Wednesday.
The data also factors in fintech unicorns based in Israel. However, most of the biggest fintech founder factories come from Europe.
Klarna’s workforce reduction
Klarna has attracted headlines in recent months due to commentary from the buy now, pay later giant’s founder and CEO, Sebastian Siemiatkowski, about using artificial intelligence to help reduce headcount.
Klarna, which currently has a company-wide hiring freeze in place, cut its overall employee headcount by roughly 24% to 3,800 in August this year. Siemiatkowski has said that Klarna was able to reduce the number of people it hires thanks to its implementation of generative AI.
He is looking to further reduce Klarna’s headcount to 2,000 employees — but has yet to specify a time for this target.
Klarna’s ability to produce so many new startups had little to do with cutbacks at the company or its focus on using AI to boost worker productivity and hiring less people overall, according to Accel’s Bocchio.
Asked about why Klarna topped the ranking of fintech founder factories in Europe, Bocchio said: “Klarna is an organization that is coming of age now.”
That means it is currently “well positioned to produce interesting founders,” Bocchio added — both because it’s large and has been around for a long time, and because of the “interesting” ways its staff work internally.
Staying close to home
Another notable finding from Accel’s report is that most companies founded by former fintech unicorn employees tend to do so in the same cities and hubs their employer was founded in.
Nearly two-thirds (61%) of companies founded by former employees of fintech unicorns were founded in the same city as the unicorn, according to Accel.
More broadly, the numbers show that Europe is seeing a “flywheel effect,” according to Bocchio, as tech firms are scaling to such a large size that staff can take learnings from them and leave to set up their own ventures.
“I think the flywheel is spinning because that talent is remaining inside the flywheel. That talent is not going anywhere.” This, he said, “speaks to the maturity and appetite” of individuals within Europe’s fintech founder factories. “We expect this trend to continue. I don’t see any reason why it should stop.”
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A new push to move credit card users to a digital statement will now come with a penalty for those who don’t want to comply.
Credit card companies from big name retailers have been silently rolling out a fee of $1.99 if you wish to keep receiving paper statements.
One of the biggest offenders is Synchrony Bank, and they have co-branded and store-affiliated credit cards with over 100 cards in their lineup, which include Sam’s Club® Credit Card, the Lowe’s Store Card, and the Amazon Store Card.
In November of last year, Citibank released new guidance to its customers saying that going paperless was “now required to access your account on Citi.com and the Citi Mobile App,”
MasterCard and Visa cards are seen in this illustration photo taken in Krakow, Poland on March 29, 2024. (Photo by Jakub Porzycki/NurPhoto via Getty Images)
There isn’t a law banning paper statements, however, but permission is required in order to start paperless billing.
In a report to NBC Los Angeles Alicia Galowitsch said that the change started to add up for them. They account for every penny.
“It’s very tight. It’s very tight to where we had to start going to a food bank,” said Ms. Galowitsch. “It’s going to be $11.94,” said Galowitsch.
The couple has a number of credit cards and receive statements to help with organization.
‘If I’m not here, the payments are going to be late because Mark’s not going to know what to do. With paper statements, everything is written down for him,’ she noted.
In this photo illustration, one and five dollar bills seen on display. (Photo Illustration by Igor Golovniov/SOPA Images/LightRocket via Getty Imagehoto Illustration by Igor Golovniov/SOPA Images/LightRocket via Getty Images))
Other concerns come with users who are not technologically savvy.
Business professor Elaine Luther from Point Park University says online banking can pose a threat to security.
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Online Reddit users have also been raising concerns regarding the fee.
For its report, WalletHub analyzed almost 5,000 deals from the Black Friday ad scans of 21 of the largest retailers in the U.S. (iStock) (iStock / iStock)
‘I have the Paypal mastercard and got a letter in the mail today. Beginning in April they will start charging if you are not using electronic statements. It is a small fee of $2.50 but still just a heads up if anyone has any cards by them may want to check.’
‘Closing my account, ’one user wrote on a thread titled: Synchrony to begin charging for paper statements,’ they said.
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