Klarna CEO Sebastian Siemiatkowski in the company’s office in Stockholm, Sweden. Picture: REUTERS/SUPANTHA MUKHERJEEAs Klarna’s billionaire founder Sebastian Siemiatkowski prepares to stage one of the biggest European fintech company listings, a feast of capitalism, he credits an unlikely backer for his runaway success: the Swedish welfare state.
Sweden’s home computer drive and concurrent early investment in internet connectivity help explain why its capital Stockholm has become rich soil for start-ups, birthing and incubating Spotify, Skype and Klarna, even though it has some of the highest tax rates in the world. That is the view of Siemiatkowski and several tech CEOs and venture capitalists.
“That could only happen in a country where broadband was the standard much earlier, while in other markets the connection was too slow,” Siemiatkowski said. “That allowed our society to be a couple of years ahead.” Though overall investments are larger in the bigger European economies of Britain and France and their long-standing finance hubs, Sweden punches above its weight in some areas. It has the third highest start-up rate in the world, behind Turkey and Spain, with 20 start-ups per 1,000 employees and the highest three-year survival rate for start-ups anywhere, at 74%, according to a 2018 study by OECD economists.