1. March 2016
Claire Ingram
Claire.Ingram@hhs.se
Michal Gromek
Michal.Gromek@phdstudent.hhs.se
Nicholas Wesley James
nick.wesleyjames@gmail.com

2. http://www.slideshare.net/eteigland

3. If the rate of change on the
outside exceeds the rate of
change on the inside,
the end is near....
-Jack Welch

4. Thx to R. Wieselfors, Ericsson for photos

5. Thx to R. Wieselfors, Ericsson for photos

6. 2015

7. People
• Millenials
• Digitally removing friction
• Sharing not owning
• Sustainability
• Global yet local
• 24x7 “mobile” workforce
Technology
• Broadband
• Smart phones
• The cloud
• Internet of Things
• Big Data
• 3D printing
• Robotics/AI
• VR/AR
• Holography
Open Source IP
• Software
• Hardware
• Physibles
Convergence of…..
Finance
• Microlending/microfinance
• Crowdfunding/equity/P2P
• Cryptocurrencies
• Blockchain
• Mobile money/payments
• M2M payments

8. Uber
• Launched June 2010
• >330 cities in 60 countries
• Limited physical assets
• > USD 60 bln valuation
(Ericsson – USD 30 bln)
“Doing more with less” through a global
platform

9. The Sharing Economy is enabled through
peer-to-peer (P2P) transactions on
multi-sided platforms (MSPs)
http://sloanreview.mit.edu/article/strategic-decisions-for-multisided-platforms/

10. Cost to launch a tech start-up

11. Local Stockholm success story:
Flippin’ Burgers
Money raised:
SEK 36,502 /
€4,000
Number of
investors: 186
Date funded:
September 2011
Sector: Food

12. Enabling local, small-scale solutions
http://travel.cnn.com/best-americana-restaurants-europe-023346

13. Crowdfunding
Accumulation of small investments in individual
projects by large number of individuals (the
“crowd”) via or with help of Internet and social
networks (De Buysere et al., 2012)
Picture: FundedByMe

14. What is FinTech?
Technologies for banking and corporate finance,
capital markets, financial data analytics,
payments, and personal financial management
- Accenture/CB Insights
Finance TechnologyFinTech

15. What is Fintech?

16. Banking is essential,
but banks are not.
Bill Gates

17. Recent surveys of millennials

18. Commoditization of banking

19. Negative trust in banks

20. Heavily increasing regulatory activity

21. FinTech customer segments & products 2015

22. >USD14
2015E

23. 12 top VC FinTech investments since 2007

24. And other big corporates investing too

28. Crowdfunding growth 2012-2015
USD 34 bln E

29. But in China alone in 2015…
http://www.crowdfundinsider.com/2016/01/79612-report-china-p2p-lending-topped-150-billion-in-2015/

30. Rethinking risk analysis

32. Automated investing based on algorithms

33. Profits from non-mortgage retail lending, e.g., credit
cards, car loans, could be reduced by 60% and revenues
by 40% over next decade.

34. In just the past few years in Stockholm…
Company Founded Business
Klarna 2005 E-commerce payment services
MyLoan 2006 Loan broker
Trustly 2008 Online payments
iZettle 2010 Mobile payments
FundedByMe 2011 Crowdfunding, crowd equity
Kivra 2011 Digital mailbox
Tink 2012 Personal finance
Safello 2013 Cryptocurrency exchange
KnCMiner 2013 Cryptocurrency mining equipment
Toborrow 2013 P2P lending for companies
Dreams 2013 Savings bank

35. Company
Founding
Year
Newly
Found
Source Description Segment
Inkassogram 2015 x 2016 Crowdsourcing Simplifies debtor and creditor relationship Lending
Lenovium 2015 x 2016 Crowdsourcing Mortgage maturity optimization service Lending
Primepilot 2015 x Tobjörn AI based investing advice Wealth Management
XBT Provider 2015 x 2016 Crowdsourcing
XBT Provider manages Bitcoin Tracker One and
Bitcoin Tracker Euro. With these instruments anyone
can invest in Bitcoin as ETN:s, exchange-traded
notes, from anywhere in the world
Crypto Currency
ZignSec 2015 x 2016 Crowdsourcing
ZignSec is Scandinavia´s most modern verification
platform. ZignSec help bank customers (Merchants)
to verify users through a series of look-ups in real-
time; Nordic eID, IP-checks, device geolocation,
device usage, blacklists, credit checks, AML checks
and much more.
Other FinTech
Zimpler 2015 x Tobjörn Mobile gaming focused payment service provider Payments
Barnpengar 2014 x Industrifonden Personal finance tool for children Wealth Management
Billecta 2014 x Industrifonden Billing software Other FinTech
Bitrefill 2014 x Tobjörn Recharge your mobile phone with bitcoin Crypto Currency
Capcito 2014 x Industrifonden Short term loans against receivables Lending
Chromaway 2014 x Tobjörn Enterprise platform for coloured bitcoins Crypto Currency
Co-Owning 2014 x 2016 Crowdsourcing Crowdfunding for real-estate investments Crowdfunding
Consector 2014 Previous Study Personal loan comparison services Lending
Cryex 2014 Previous Study Institutional financial trading platform Crypto Currency
Leaseonline 2014 x NFT Ventures Online car leasing service Lending
Leasify 2014 x NFT Ventures Business lease managagement system Other FinTech
lendify 2014 Previous Study Loans between private individuals Lending
Monetise 2014 x Industrifonden Short term loans against receivables Lending
NOWO 2014 x NFT Ventures Credit card with automatic retirement savings Other FinTech
Pensionera (Pensionera förmedling
i Sverige AB)
2014 x Industrifonden Pension comparison and monitoring Wealth Management
Pensionskraft 2014 x NFT Ventures Pension comparison and monitoring Wealth Management
Pepins (Pepins Nordic AB) 2014 x Tobjörn Equity crowdfunding platform Crowdfunding
Prello 2014 Previous Study mobile POS Payments
Qliro AB 2014 Previous Study Online payment solution provider Payments
Slipp 2014 x 2016 Crowdsourcing Accounting solutions provider Other FinTech
Strawpay 2014 x Tobjörn Developing a highly scalable open trasaction protocol Crypto Currency
Tessin Nordic AB 2014 x NFT Ventures Property Crowdfunding Crowdfunding
TradeVenue 2014 x Industrifonden Social meeting place for savers Wealth Management

36. Stockholm #2 FinTech city after London in EU
2010-2014 investment
● $532 Mln
2014 investment
● $266 Mln
($141 Mln VC)
2015 investment
● $96.4 Mln VC
Top 2014 Investments in
Stockholm FinTech
Companies (USD Mln)
Klarna $125
iZettle $55
Trustly 29
Bima Mobile $22
KNC Miner $14
http://www.slideshare.net/eteigland/stockholm-49722748

37. 1950 1960 1970 1980 1990 2000 2010
1959,
Bankgirot
founded
1985, Swedish
financial and credit
markets deregulated
1968, World’s first
online ATM in
Sweden
First wave of electronic trading
software companies emerges
2003, First
BankID issued in
Sweden
1990s, Sweden invests in Internet
infrastructure, today country with 3rd
highest Internet penetration
2010, iZettle
founded
2010, Neonet
$160M exit 2014,
iZettle
raises
$55M
2014, Klarna raises
$125M in PE
1967, First ATM
installed in
Sweden
1984,
Optionsmäklarna
(OM) opens in
Stockholm, Sweden’s
first stock option
market, electronic
trading introduced
2012, TriOptima,
$160M exit
2005, Klarna
founded
1998, Merger
between
Stockholm’s
Stock Exchange
and OM
Stockholm
2007, NASDAQ
acquires OMX Group
Unicorns such as Skype, King, Spotify
and Mojang founded
2014, FinTech
Funding in
Stockholm
Explodes
Long history of “FinTech” in Stockholm
http://www.slideshare.net/eteigland/stockholm-49722748

39. Forming partnerships…
+
…to rethink and encourage saving among millenials
+

40. Disassembling the value chain

41. Transforming insurance

43. Toborrow.se

44. FinTech Companies in Stockholm by Segment
Segment 2009 2010 2011 2012 2013 2014 2015
Transfers 1 1 1 2 2 2 2
Crowdfunding 0 1 2 3 3 6 6
Crypto Currency 0 0 0 3 5 9 10
Wealth
Management
2 2 2 4 5 9 10
Other FinTech 3 6 8 9 10 14 15
Trading and
Banking Tech
14 15 15 15 15 15 15
Lending 5 6 6 8 9 14 16
Payments 10 12 16 18 20 22 23
Total 35 43 50 62 69 91 97
No. of FinTech companies in Stockholm per Year
0
10
20
30
40
50
60
70
80
90
100
2015201420132012201120102009
#ofCompanies
Payments
Lending
Trading and Banking Tech
Other FinTech
Wealth Management
Crypto Currency
Crowdfunding
Transfers

45. Stockholm FinTech Revenue and Employee #s
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
0
2
4
6
8
10
12
14
16
2010 2011 2012 2013 2014 2015 (est)
Employees
Revenue(bnSEK)
Revenue
Employees
2010 2011 2012 2013 2014 2015 (est)
Revenue
(bn SEK)
7.5 7.8 9.0 12.0 13.2 14.3
Employees 2,889 3,210 4,255 4,710 5,261 5,812

46. In 2015 VCs invested USD 96 mln in
Stockholm FinTech Companies
Company Segment 2015 Investment (m USD)
iZettle Payments 66.6
KNC Miner Crypto Currency 15.0
Cryex Crypto Currency 10.0
Tessin Crowdfunding 1.8
Mr Shoe Box Other FinTech 0.7
Capcito Lending 0.6
Pensionskraft Wealth Management 0.6
Fidesmo Crypto Currency 0.5
TradeVenue Wealth Management 0.5
Safello Crypto Currency 0.1
96.4
141.0
14.0
41.4
181.4
11.1
0
50
100
150
200
201520142013201220112010
mUSD

47. https://safello.com/

48. Within 6 years:
Challenging the
fiat money
system?
Bitcoin – An emergent phenomenon
• Open source project on SourceForge in Jan 2009
• Original source code by “Satoshi Nakamoto” – pseudonym?
• Developed by self-organizing community of thousands of
strangers across globe
• Approx USD 6.3 bln market cap and approx 180,000 daily
transactions volume 1 BTC = USD 413 (March 2016)
Teigland, Yetis, Larsson 2013 http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2263707

49. What is a cryptocurrency?
 Digital
 Decentralized, peer-to-peer (P2P), i.e., no central,
third party
 Uses cryptography to validate/secure transactions
 Also uses cryptography to generate currency itself
 Non-technical explanation of Bitcoin
− https://www.youtube.com/watch?v=t5JGQXCTe3c

50. Institutions
Emergent Collective
vs
E.g., Central Bank
~ Long-standing financial
institutions and regulations
E.g., Bitcoin Community
~ Emergent collective of users across
globe connected through internet
Teigland, Yetis, Larsson 2013

51. Screenclip from: How Bitcoin Works under the hood, by “Curious Inventor”
Bitcoin: one application of the block chain
Block chain
• Shared digital ledger
anyone can access
• Run by all participants
• All transactions logged
and transparent
• Chronology and
integrity enforced by
cryptography

55. Betting on the Blockchain - together
42 banks and counting…
Goldman Sachs, JPMorgan,
Credit Suisse, Barclays,
Commonwealth Bank of
Australia,
State Street, RBS, BBVA, UBS,
Nordea, SEB, + ……
+

57. IBM + Samsung on blockchain

58. The (Ethereum) Blockchain

59. Benefits of blockchain technology
 Core concept is very powerful for financial services
− Lower costs through shared infrastructure
− Faster settlement that leads to lower capital and liquidity
needs
− Increased transparency, especially with cross border
payments
− Perfect record-keeping
− Greater security through cryptography, transparency
Citi Research, Jan 2016

61. Issuing private equity and public shares

62. Enablers of a “true” Sharing Economy?
Blockchains
Sharing/
Collaborative
Economy
IoT/sensors
P2P/M2M
micropayments
Big data

63. Enabling smart contracts
Imagine a blockchain-based script that is activated
when two parties send bitcoins to an escrow Bitcoin
account controlled by the script, and which
will release the bitcoins in the future to whoever wins
a bet on the average level of rainfall over a certain
period.
This smart-contract is programmed to read data from
weather agencies, and after a set amount of time
releases the bitcoins from the escrow, sending it to a
farmer who requires protection against low rainfall.
This is a blockchain-based weather derivatives
contract. -Brett Scott

64. robots

65. Some FinTech challenges
 Regulation
− How to avoid stifling innovation?
 Privacy
− Ensuring integrity of data?
 Security
− Preventing security breaches/hacking
 Untested
− In periods of high interest rates, increased risk,
and reduced investment

66. A reversal of early “onerous” regulations
Italy’s recent changes
 Expand definition of ”professional investor”
 Allows a limited amount of public advertising
 Making transactions completely online

67. State of regulations in Sweden
Tax considerations
 VAT due on reward-
based crowdfunding
money raised
 Tax deductions on
private investments
under 50,000 kr per
year
Jurisdictional problems
 Much of FinTech is
consumer-facing
 Problem: who oversees?
Finansinspektionen or
Konsumentverket?

68. In Europe, PSD2 actually mandates “opening up”

69. Opening up innovation…
Citigroup Capital One
BBVA Compass Silicon Valley Bank
Bank of America

70. Democratizing innovation
through access to capital?

71. “Made in Africa” 3D printer (Togo)
Winner of International
Space Apps Challenge
http://www.engineering.com/3DPrinting/3DPrintingArticles/ArticleID/5712/E-Waste-3D-Printer-to-Mars.aspx

72. Enabling financial inclusion

73. FinTech – An increasingly crowded space
• Growing number of entrepreneurs with
experience from established finance industry
• Increasing number of FinTech incubators
• Collaboration among established banks
• Open innovation through open APIs
• Other big non-banking entrants

74. https://www.cbinsights.com/research-venture-capital-2015
State of the VC industry?

75. Previously…..
From Netscape IPO in
1995 to PayPal
acquisition by eBay in
2002, more than 450
attackers – new digital
currencies, wallets,
networks, etc.
challenged incumbents
McKinsey, 2015
Fewer than five
survive as stand-
alone entities today.

76. The future is already here,
it’s just not very evenly
distributed.
- William Gibson

77. Robin Teigland
Robin.Teigland@hhs.se
@robinteigland
Claire Ingram
Claire.Ingram@hhs.se
Michal Gromek
Michal.Gromek@phdstudent.hhs.se
Nicholas Wesley James
nick.wesleyjames@gmail.com

78. Robin Teigland
robin.teigland@hhs.se
www.slideshare.net/eteigland
www.funnovation.se
@robin.teigland
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