Klarna produces more startups than any other European fintech: Accel

LONDON – More startups are being spawned from Swedish digital payments company Klarna than from any other financial technology unicorn in Europe, according to a new report from venture capital firm Accel.

Accels”Fintech founder factoryThe report shows that Klarna alumni have founded a total of 62 new startups, including companies such as Swedish tech company Anyfin, regulatory compliance platform Bits Technology and AI-powered coding platform Pretzel AI.

That’s more than any other venture-backed fintech startup valued at $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 ex-employees of both companies have each founded 33 companies, according to Accel data.

Accel labels these companies as “founder factories,” on the grounds that they have become incubators for talent who often start their own companies.

“We now have a very long list of large, sustainable, successful companies in Europe across the different ecosystems – including London, Berlin and Stockholm – that have generated interesting results,” Luca Bocchio, partner at Accel, told CNBC.

Of the 98 venture capital-backed fintech unicorns in Europe and Israel, 82 have spawned 635 new tech-based startups, according to Accel’s report, which was published on Tuesday ahead of a fintech event the company is hosting in London on Wednesday.

The data also takes into account fintech unicorns in Israel. However, most of the largest fintech founder factories come from Europe.

Klarna has made headlines in recent months for comments from the buy now, pay later giant’s founder and CEO, Sebastian Siemiatkowski, about using artificial intelligence to help reduce its workforce.

Klarna, which is currently in a company-wide hiring freeze, cut its total workforce by around 24% to 3,800 in August this year. Siemiatkowski has said that Klarna can reduce the number of people it hires thanks to the implementation of generative AI.

He wants to further reduce Klarna’s workforce to 2,000 employees, but has yet to specify a time for this goal.

Klarna’s ability to spawn so many new startups had little to do with corporate cuts or a focus on using AI to increase employee productivity and hire fewer people, according to Accel’s Bocchio.

Asked why Klarna topped the rankings of fintech founding factories in Europe, Bocchio said: “Klarna is an organization that is now maturing.”

That means it’s currently “well positioned to produce interesting founders,” Bocchio added – both because it’s big and has been around for a long time, and because of the “interesting” way its staff works internally.

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 where 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 broadly, the figures show that Europe is seeing a ‘flywheel effect’, according to Bocchio, as tech companies become so big that staff can learn the lessons and leave to set up their own businesses.

“I think the flywheel is turning because that talent stays in the flywheel. That talent isn’t going anywhere.” This, he said, “speaks to the maturity and appetite” of individuals within Europe’s fintech factories. “We expect this trend to continue. I see no reason why it should stop.”