Buy now, pay later companies like Klarna and Block’s Afterpay could face tougher rules in the UK
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LONDON — More startups have been spun out of Swedish digital payments company Klarna than any other financial technology unicorn in Europe, according to a new report from venture capital firm Accel.
According to Accel’s Fintech Founder Factory report, Klarna graduates have launched a total of 62 new startups, including Swedish lending technology company Anyfin, regulatory compliance platform Bits Technology, AI-powered coding platform Pretzel AI, and more. It is shown that there is.
That’s more than any other venture-backed fintech startup in the region worth more than $1 billion.
This includes digital banking app Revolut, whose former employees founded 49 startups. According to Accel data, former staff from both companies have founded 33 companies, including money transfer app Wise and online-only bank N26.
“Founding factory”
Accel refers to these companies as “foundation factories” because they serve as places for training human resources to establish their own companies.
Luca Bocchio, a partner at Accel, told CNBC: “We currently have large, durable and successful projects that are producing interesting results across different ecosystems in Europe, including London, Berlin and Stockholm. “We have a very long list of companies.”
According to the Accel report, 82 of the 98 venture-backed fintech unicorns in Europe and Israel have spawned 635 new tech-enabled startups. The report was released on Tuesday ahead of a fintech event the company is hosting in London on Wednesday.
This data also takes into account fintech unicorns based in Israel. However, most of the biggest fintech founder factories come from Europe.
Klarna job cuts
Klarna has been in the headlines in recent months due to comments from the buy now, pay later giant’s founder and CEO Sebastian Siemiatkowski that it will use artificial intelligence to reduce headcount.
Klarna, which is currently implementing a company-wide hiring freeze, reduced its total workforce by approximately 24% to 3,800 in August of this year. Siemiatkowski said Klarna was able to reduce its headcount by implementing generative AI.
He is considering further reducing Klarna’s workforce to 2,000 people, but has not yet specified a timeline for this goal.
Klarna’s ability to create so many new startups Accel’s Bocchio said the company is focused on reducing headcount, or leveraging AI to improve employee productivity and reduce its overall workforce.
When asked why Klarna topped the ranking of European fintech startups, Bocchio said: “Klarna is a maturing organization.”
That means the company is now “well positioned to produce interesting founders,” Bocchio added. This is due to both the company’s large size and long-standing presence, as well as the “interesting” way its staff work within the company.
stay close to home
Another notable finding from the Accel report is that most companies founded by former employees of fintech unicorns tend to do so in the same city where their employer was founded or based. That’s true.
According to Accel, nearly two-thirds (61%) of companies founded by former employees of fintech unicorns were founded in the same city as the unicorn.
More broadly, the numbers show that Europe is experiencing a “flywheel effect,” according to Bocchio. That’s because tech companies have expanded so much that staff can take what they’ve learned and leave to start their own ventures.
“I think the reason the flywheel is turning is because that talent remains in the flywheel. That talent isn’t going anywhere.” “It speaks to the maturity and appetite” of the company, he said. “We expect this trend to continue. We see no reason why this trend should stop.”
