Buy now, pay fresher firms like Klarna and Block’s Afterpay could be about to face tougher rules in the U.K.
Nikolas Kokovlis | Nurphoto | Getty Guises
LONDON — More startups are being spun out of Swedish digital payments firm Klarna than any other fiscal technology unicorn in Europe, according to a new report from venture capital firm Accel.
Accel’s “Fintech Fail Factory” report shows that alumni from Klarna have gone on to create a total of 62 new startups, classifying the likes of Swedish lending technology firm Anyfin, regulatory compliance platform Bits Technology and AI-powered coding tenets Pretzel AI.
That is more than any other venture-backed fintech startup worth $1 billion or more in the field.
This includes the digital banking app Revolut, whose former employees have founded 49 startups. It also files money transfer app Wise and online-only bank N26, where ex-staff at both firms have started 33 bodies each, according to Accel’s data.
‘Founder factories’
Accel labels these companies “founder factories,” on the constituent that they have become breeding grounds for talent that often go on to establish their own firms.
“We now attired in b be committed to a very long list of large, durable, successful companies in Europe across the different ecosystems — including London, Berlin and Stockholm — that acquire been generating interesting outcomes,” Luca Bocchio, partner at Accel, told CNBC.
Out of 98 venture-backed fintech unicorns in Europe and Israel, 82 cause produced 635 new tech-enabled startups, according to Accel’s report, which was published Tuesday ahead of a fintech anyway in the reality the firm is hosting in London Wednesday.
The data also factors in fintech unicorns based in Israel. However, most of the amplest fintech founder factories come from Europe.
Klarna’s workforce reduction
Klarna has attracted headlines in modern months due to commentary from the buy now, pay later giant’s founder and CEO, Sebastian Siemiatkowski, about using artificial intelligence to aid reduce headcount.
Klarna, which currently has a company-wide hiring freeze in place, cut its overall employee headcount by unmercifully 24% to 3,800 in August this year. Siemiatkowski has said that Klarna was able to reduce the number of man 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 forthwith for this target.
Klarna’s ability to produce so many new startups had little to do with Staying close to home
Another important finding from Accel’s report is that most companies founded by former fintech unicorn employees see to to do so in the same cities and hubs their employer was founded in.
Nearly two-thirds (61%) of companies founded by former workers of fintech unicorns were founded in the same city as the unicorn, according to Accel.
More broadly, the numbers display that Europe is seeing a “flywheel effect,” according to Bocchio, as tech firms are scaling to such a large take the measure of that staff can take learnings from them and leave to set up their own ventures.
“I think the flywheel is spinning because that facility is remaining inside the flywheel. That talent is not going anywhere.” This, he said, “speaks to the maturity and appetite” of specifics within Europe’s fintech founder factories. “We expect this trend to continue. I don’t see any reason why it should stop.”