An interview with Klarna's CEO on Fintech, Stockholm, London and Europe

A couple of weeks ago, at TechCrunch Disrupt in London I finally had the chance to sit down with Sebastian Siemiatkowski, the CEO of Klarna, Europe's leading Fintech company to talk Fintech, Stockholm, London and Europe. Sebastian is certainly not afraid to speak his mind, as demonstrated by what he said during his talk at the event (see below), and he was also very candid with me in response to my questions.

Neil Murray (NM): Something I always find interesting is that London is classed as being the Fintech capital of the world, but when you look at valuations, it’s companies like Klarna and Adyen that lead the way in Europe. Do you feel London’s reputation is justified or do you see Fintech as a European strength, rather than just London’s?

I don’t know, to me it’s not that obvious that London is that main fintech hub to be honest. For me, where I see the most interesting stuff is Stockholm and London.
— Sebastian Siemiatkowski, CEO of Klarna.

Sebastian Siemiatkowski (SS): Berlin has a very different flavour to it and then there’s basically not much left. I think it's fun that in London there’s that spirit around Fintech, as there is in Stockholm and Berlin, but unfortunately in the rest of Europe there’s very little that we see. I’m sure there is great companies out there in other places but there’s not much visibility for them.  

NM: My personal view is that the Nordics certainly challenge London when it comes to Fintech, but there is still more VC coming into London right now, but this might change in the next couple of years, do you feel that the Nordics will become a bigger hub than they are right now?

SS: Yeah, maybe, Atomico did this great study recently where they looked at things per capita and Stockholm did fantastically, but Sweden is always going to be limited by the fact that it is drawing talent from 9 million people and historically its been much more popular to go to Berlin , and London is a much larger proposition, so it's great that Sweden has done well relevant to its population, but I think we can continue to do extremely well. I like the fact that in Sweden now, it feels like everybody is now supporting this industry, but that wasn’t always the case before.

Actually the politicians in the UK were much faster at adopting and promoting tech. I always laugh about the fact that we were invited to Downing Street three times before a Swedish politician ever visited us in Stockholm, so there’s definitely now more support from Swedish society for the tech community and I think that’s a benefit.
— Sebastian Siemiatkowski, CEO of Klarna

NM: Do you think that in many ways Sweden has done well in spite of the odds then? And what would you put down as the main reason behind Stockholm’s success?

SS: I think Sweden has always done well in terms of per capita. If you look our music industry for example, Sweden has performed really well. And for me, I think it is a society that really tries to give everyone a chance, free education, free healthcare, it is really good at creating opportunities for everyone, say opposed to the U.S being the counter-example where that’s more challenging. I think that, in combination with the fact that Sweden was very early in the tech industry, we had Ericsson, an early mover in the mobile market and all these technologies came to us.

I came from a family that didn’t have a lot of money but there was something called "PC at Home" which the Social Democrats gave us as subsidised computers, so families like mine had a computer even though we couldn’t really afford one in the early 90’s. The other thing is, broadband was something that was pursued by the Government. Even if I think about the early days of Klarna, where did we see transactions? In the places that had broadband rather than dial-up. And if you're the first country in the World that's using internet daily in their lives that's going to create ideas and concepts, so of course that fosters innovations and gives abilities to entrepreneurs and companies.

So I think a couple of these things played out well for the country, plus there’s always been a heavy engineering culture, plus there’s a lot of dark nights with nothing else to do but work! I think these things in combination have worked in favour of it, but I think in order to be sustainable going forward whats most important is that we continuously push that. What if we were one of the first countries in the world to offer free basic 4G for example? Thats going to happen anyway, everything is going to be connected and it's basically going to be free to be connected. more or less, so that will foster more innovation too, so let's move first.

NM: Are you using your higher-profile now to attempt to impact policy etc?

SS: Theres a couple of us trying to do some stuff, I’m fairly close to the Spotify founders, also Niklas Zennstrom, and there’s also Truecaller and iZettle and we regularly meet and talk about the opportunities, but all of us are fairly pragmatic as well and I’m not sure that all of us have huge beliefs in politics' ability to foster innovation. Ultimately it's down to the individual to start a company and eventually become something. There’s always that balance, how much can you really push innovation, for example, can you teach it? I’m not so sure. 

NM: I still feel that Klarna are a little under-the-radar, yet you are Europe’s fifth most valuable company, do you care that you don’t have a higher profile or do you think it’s weird you don’t have a higher profile with such a high valuation? 

Actually, I would say I think it’s weird we are not better known. But on the other hand, is it something that we need to actively pursue or would it create a lot of value for us? I’m not so sure.
— Sebastian Siemiatkowski, CEO of Klarna

SS: I think it's been fairly good to have been under the radar in respect to getting things done. We now see our competitors cloning and copying things we implemented a couple of years ago, so, in our sector, we are not getting away with being under the radar anymore. But in the end, we create value for our customers, they like we do, and that is what will drive our growth. That’s the most important thing. We like talking about things that we actually do, rather than things that we could do, that’s more our style but that might hurt us a little bit in terms of our profile.

NM: You speak very fondly of Stockholm, are you driven by giving back to the Stockholm ecosystem further down the line?

SS: Well, I’ve already done a couple of angel investments, but they’re actually across Europe, so I’ve done one in the UK, one in Germany and a couple in Stockholm. I think because of my Polish background, although I love Sweden, in general I’m a European, I love Europe. I’m a big fan of making Europe successful, so for me I’m quite indifferent between the UK or Sweden or Poland or Germany, but I do think a lot about how Europe can position itself going forward and what’s going to make us succeed. 

If you really want to keep on top of what's happening in The Nordic startup scene, then sign up to our weekly newsletter where we curate all of the need-to-knows news from the region

In the tech world, things move fast and companies are born anywhere in the world. I’m able to have an ear to the ground with The Nordic Web - the content is fresh, local, and of high quality, which is exactly what you need as a seed investor.

In fact, it’s through Neil Murray’s newsletter that I first heard about Mapillary. Several months later, I was fortunate to lead our firm’s investment in the Company to help drive the creation of a crowdsourced visual representation of our world
— Nathan Benaich, Playfair Capital