Sifted - Klarna’s founder factory

Good morning there,

This year I've reported on employees-turned-entrepreneurs emerging from later-stage fintechs like Monzo, Checkout.com and GoCardless. Financial superapp Revolut, in particular, is known as fertile ground for Europe’s next generation of founders. 

“You’re always challenged and it’s high speed,” a former Revolut employee told me last year. “And the exposure you get as an employee is unmatched — you can take on as much as you can handle.” 

According to new data by VC firm Accel and data platform Dealroom, however, the UK fintech has been dethroned as Europe’s number one fintech founder factory. Taking its place? Swedish buy now, pay later giant Klarna. Read on for a deep dive into the rest of the list.

Elsewhere today:

• Paris-based GenAI startup LightOn to IPO at a €50m valuation
• From bootstrapping to a $665m cash acquisition: How Silo AI made it to exit
• Founders, if your OKRs don't work, you just set them wrong 

— Tom Matsuda, reporter

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🇫🇷 French GenAI startup LightOn has announced it plans to list publicly on the Euronext Growth stock exchange in Paris this year, with the company targeting a €10m capital increase at a valuation of €50m. 

• LightOn has been developing GenAI models for four years and in 2023 achieved €8m in revenues. It’s not your typical profile for an IPO candidate — but cofounder Laurent Daudet tells Sifted the move to list came with several advantages over raising a traditional Series A from VCs.
• The French financial regulator AMF has approved LightOn’s registration document, marking the first step for IPO — but the listing remains subject to market conditions and further regulatory approvals.

🇸🇪 Northvolt is laying off 840 blue-collar workers from its flagship factory Northvolt Ett in the north of Sweden, reports local media outlet Norran.

• Following union negotiations that were finalised yesterday, the total number of staff that will have to leave Northvolt’s Skellefteå site is 1,144, including the layoffs of more than 338 white-collar workers announced last week. In September, as part of a strategic review, Northvolt announced that it was looking to lay off around 1,600 people across its sites in Sweden.
• A Northvolt spokesperson told Sifted: "What has happened today is that we informed internally that the negotiations have been concluded with the union on the lay-offs communicated a couple of weeks ago. The exact final numbers might still vary slightly."

🇫🇮 Helsinki-based AI lab Silo AI hit the headlines this summer when it was bought by Silicon Valley semiconductor company AMD in a $665m cash deal — the biggest AI acquisition in Europe to date. It’s part of a strategy from the US chip maker to expand its portfolio of AI hardware and software as it tries to go head-to-head with Nvidia. 

• But how does a formerly bootstrapped AI startup from Finland play a role in a competition between giants? Sifted met up with cofounder and CEO Peter Sarlin to find out.

🤔 Teams at Google, Microsoft, Neftlix and other tech giants set OKRs (objectives and key results), but in startup land founders seem less convinced by them. 

• “We have a small team, so it doesn’t work”, “Everything changes every week, setting goals is ineffective” and “OKRs discourage the team” are just some of the things they’ve told Ksenia Novikova, head of operations at Flyer One Ventures. But she doesn’t think they should write them off too quickly — and shares a plan for how to make them work.

🛳️ Navigating sustainable shipping: Startups and corporates set course to help decarbonise shipping. (Paid for and produced by Shell Ventures)

Sixty-two startups have been created by alumni of Swedish buy now, pay later giant Klarna, according to new data released by VC firm Accel and data platform Dealroom. Revolut, last year’s top dog, is in second place with 49, while money transfer app Wise scores bronze with 33 startups founded by ex-employees. 

Klarna’s total is almost double last year’s 32. The number of former Revolut founders has increased by 44% year-on-year. Accel partner Luca Bocchio tells Sifted this is due to both the size of the companies — Klarna has around 3,800 employees; Revolut has more than 10k — and their culture. 

“I think both of those names [Klarna and Revolut] are famous for having a culture of independent teams working on new products, ideas and launches,” he says. “So naturally you have a lot of individuals that are being exposed to that modus operandi and then they can take the leap of faith and go out by themselves.” 

The Accel report also shows how London continues to lead in fintech — it’s Europe’s most productive fintech hub for creating other startups; 234 startups have been created by ex-employees from the 24 fintech unicorns based in the capital.

Find out the other cities that made the cut here. 

This story first appeared in Sifted’s fintech newsletter, which drops into inboxes every Tuesday morning. You can sign up here.

Our Q3 2024 Review

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🇫🇷 Paris. Contributing editor Éanna Kelly will be at the French capital's Luxembourg Palace with a host of deeptech VCs, LPs, research institutes and scientists on Friday, for 'Unleashing Europe's next scientific revolution'.

🇪🇸 Barcelona. Which areas of impact tech can Spain excel at?

Attend an intimate breakfast meet-up in central Barcelona on November 7 to discuss which areas of impact tech Spain can excel at. The event is intended to welcome and support 40 early-stage founders with complimentary coffee and a light breakfast. Apply to attend

Vejen, Denmark-based FarmDroid, which specialises in autonomous, solar-powered agricultural robots for weed control, raised €10.5m in funding. Convent Capital led the round and was joined by investors including Denmark’s Export and Investment Fund and Navus Ventures.

Warsaw-based Oxla, which is developing a distributed analytical database for high-volume data processing, raised $11m in seed funding from investors including TQ Ventures, Lead Ventures, Warsaw Equity Group and 4growth VC.

Warsaw-based Authologic, which is developing a unified digital ID verification platform with a single API for things like identity wallets and bank IDs, raised $8.2m in Series A funding. OpenOcean led the round and was joined by investors including Y Combinator, Peak Capital and Smok VC.

London-based Keel, a platform for building custom operational software, raised $6m in seed funding from investors including Earlybird and LocalGlobe.

Leeds, UK-based Microlub, which is developing protein microgel technology for alternative meat and reduced fat foods, raised £3.5m in seed funding. Northern Gritstone led the round and was joined by investors including Praetura Ventures and LIFFT.

• The company is a spinout from the University of Leeds.

Berlin-based Passionfroot, a creator marketing platform that uses AI tools, raised $3.8m in seed funding. Supernode Global led the round and was joined by investors including Sequoia Capital and Accel scout funds, and Creandum.

Helsinki-based Avenue Biosciences, which specialises in novel protein engineering technologies, raised $2.5m in seed funding. Voima Ventures led the round and was joined by investors including Inventure.

Pfronten, Germany-based Autarkize, which develops pyrolysis plants to convert biogenic residues like waste wood and shells into renewable gas and biochar, raised €2.3m in seed funding. High-Tech Gründerfonds led the round and was joined by investors including Fair Capital Impact Fund, Innovation for Impact and Floris Capital.

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