While there’s a lot of tech innovation brewing in the Nordics, the Norwegian startup scene may just be outshining them all. Norway has long been a small, and underestimated, tech center, but it seems the government’s heavy investment in the nation’s startup ecosystem is finally paying off.
In this week’s edition of PYMNTS’ Weekly Tech Center Roundup, we explore the Nordic region, where Norway is taking a strong lead across the FinTech landscape.
Before we jump into the post, here are a few quick facts about Norway and its tech scene:
- Norway has an estimated population of almost 6 million and a GDP of $388 billion.
- The country maintains the fourth-highest per capita income in the world.
- Norway is considered one of the best places to live — it has ranked number one on the OECD Better Life Index, the Index of Public Integrity and the Democracy Index.
- In terms of investments, Norway is the fastest-growing Nordic country.
- The largest venture investor in Norway is Investinor, which is a $588 million fund established by the Norwegian government.
Why The Nordics Have The FinTech Touch
Despite a relatively conservative banking scene and small populations, Nordic countries have been able to excel in the financial technology space.
According to a recent blog post from The Realization Group, the flourishing FinTech scene has developed out of an environment that cultivates experimentation, collaboration and various other qualities that are fundamental to innovation.
“I think it has to do a bit with how people are, mentally, in the Nordics,” said Morten Lindeman, CTO and cofounder of Infront. “Basically, I think we are people who look into things and think, ‘Hey, we can do this better.'”
“It’s probably because we have these long, cold, unpleasant winters so that we can sit inside, thinking about all these weird things that we do,” Lindeman added.
Though FinTech has evolved into a buzzword in recent years, the FinTech industry concept actually goes back many years in the Nordic region.
With a curiosity about technology and a general openness from management about pursuing new ideas, companies within these countries have a strong tradition of staying creative.
“I think our management culture is actually an important aspect of it,” Veronica Augustsson, CEO of Cinnober, stated. “It's also creating an environment where you will come up with ideas, where you are curious, where you're actually there to challenge something.”
This requires creating room for failure, while also investing in the time to test and develop new ideas and concepts.
Banking On Innovation
Financial services group Nordea is opening up its office in Oslo, Norway, to 35 startups as it gears up to help the companies with their own FinTech innovation endeavors.
The Nordea Startup Accelerator, a 12-week program where startups develop their ideas alongside Nordea and FinTech experts, selected around 20 teams to participate in the opportunity this fall in Stockholm and Helsinki.
Over 200 companies applied to take part in the accelerator, with the ones chosen hailing from a range of countries, including the U.S., Sweden, Norway, Denmark, India, Russia, Singapore and Finland.
Jan Sirich, head of experimentation and learning at Nordea, said the program will provide an opportunity for advancement in new technologies, such as cognitive computing, artificial intelligence and blockchain. Nordea is also interested in areas where “new technology can help us offer better services to our customers,” Sirich added.
The group’s first iteration of its accelerator granted the winning startups more than €600,000 in new financing, and it continues to work with some of those startups to this day.
Huddlestock Hits Milestone
Norwegian FinTech company Huddlestock, which provides a patented crowdfunding platform where users can access professional-grade investment ideas and strategies, closed on an historic $1.5 million seed round.
The startup’s mission to open up the hedge fund world to all has gained it a great deal of attention in the financial space.
The funding raised by Huddlestock is performance-based, meaning investors provided half of the capital now and will deliver the rest within 10 months if the firm can reach a certain target share price.
Murshid M. Ali, CEO of Huddlestock, explained: “The past few months have been exciting for us. We have been signing agreements with great partners and aim to collaborate with banks in several markets. They understand our value proposition and are interested in working with us in offering their customers our platform. We are building a hub where companies that provide genuine value to our users can benefit by working with us."
Oslo-based Huddlestock now has a valuation of $13 million.
The firm is part of the next generation of FinTechs, aimed at defying the status quo of the financial markets and democratizing the investment industry.
By opening up the investment space to more people, Huddlestock said it will enable users to reap the same types of benefits in the financial markets as investment professionals have always had access to.