Buy now, pay later Companies like Klarna and Block’s Afterpay could be about to face tougher rules in the UK
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LONDON — There are more startups from Swedish digital payments company Klarna than any other fintech unicorn in Europe, according to a new report from venture capital firm Accel.
“Accel”Fintech Founders Factory“The report shows that Klarna alumni have created a total of 62 new startups, including Swedish lending technology company Anyfin, regulatory compliance platform Bits Technology and AI-powered coding platform Pretzel AI.
This is more than any other venture-backed fintech startup worth $1 billion or more in the region.
This includes digital banking app Revolut, whose former employees have founded 49 startups. It also includes money transfer app Wise and online bank N26, where former employees of the two companies have started 33 businesses each, according to Accel data.
“Founding factories”
Accel calls these companies “founder factories,” on the grounds that they have become a hotbed of talent who often start their own companies.
“We now have a very long list of large, sustainable and successful companies in Europe in different ecosystems, including London, Berlin and Stockholm, which have generated interesting results,” Luca Bocchio, partner at Accel, told CNBC.
Of 98 venture-backed fintech unicorns in Europe and Israel, 82 have created 635 new tech startups, according to Accel’s report, released Tuesday ahead of a fintech event the company is hosting Wednesday in London.
The data also takes into account fintech unicorns based in Israel. However, most of the biggest fintech founding factories come from Europe.
Klarna downsizing
Klarna has been in the news in recent months due to comments from the buy now, pay later giant’s founder and CEO Sebastian Siemiatkowski about using artificial intelligence to help downsize.
Klarna, which currently has a company-wide hiring freeze in place, reduced its overall workforce by about 24%, to 3,800 as of August this year. Siemiatkowski said Klarna has been able to reduce the number of people it hires through the implementation of generative AI.
He plans to further reduce Klarna’s workforce to 2,000 employees – but has not yet specified a date for this goal.
Klarna’s ability to produce so many new startups had little to do with discounts in the company or its concentration on using AI to increase worker productivity and hire fewer people overall, according to Accel’s Bocchio.
Asked why Klarna tops the ranking of fintech founding factories in Europe, Bocchio said: “Klarna is an organization that is coming of age now. »
This means it is currently “well-positioned to produce interesting founders,” Bocchio added – both because it is large and has been around for a long time, and because of the “interesting” way its staff works internally. .
Stay close to home
Another notable finding from Accel’s report is that most companies founded by former employees of fintech unicorns tend to do so in the same cities and centers in which their employer was founded.
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 generally, the figures show that Europe is experiencing a “flywheel effect”, according to Bocchio, as technology companies grow to such a size that staff can learn from them and go off to start their own businesses.
“I think the wheel turns because that talent stays inside the wheel. That talent doesn’t go anywhere.” According to him, this “testifies to the maturity and appetite” of individuals within European financial technology creation factories. “We expect this trend to continue. I see no reason why it should stop.”