How Sweden Became The Silicon Valley of Europe

STOCKHOLM, Aug 11 (Reuters) – As Klarna’s billionaire founder Sebastian Siemiatkowski prepares to stage one of the biggest-ever European fintech company listings, a feast of capitalism, he credits an unlikely backer for his runaway success: the Swedish welfare state.

In particular, the 39-year-old pinpoints a late-1990s government policy to put a computer in every home.

“Computers were inaccessible for low-income families such as mine, but when the reform came into play, my mother bought us a computer the very next day,” he told Reuters.

Siemiatkowski began coding on that computer when he was 16. Fast-forward more than two decades, and his payments firm Klarna is valued at $46 billion and plans to go public. It hasn’t given details, though many bankers predict it will list in New York early next year.

Sweden’s home computer drive, and concurrent early investment in internet connectivity, help explain why its capital Stockholm has become such rich soil for startups, birthing and incubating the likes of Spotify, Skype and Klarna, even though it has some of the highest tax rates in the world.

That’s the view of Siemiatkowski and several tech CEOs and venture capitalists interviewed by Reuters.

In the three years the scheme ran, 1998-2001, 850,000 home computers were purchased through it, reaching almost a quarter of the country’s then-four million households, who didn’t have to pay for the machines and thus included many people who were otherwise unable to afford them.

In 2005, when Klarna was founded, there were 28 broadband subscriptions per 100 people in Sweden, compared with 17 in the United States – where dial-up was still far more common – and a global average of 3.7, according to data from the World Bank.

Spotify allowed users to stream music when Apple’s (AAPL.O) iTunes was still download-based, which gave the Swedish company the upper-hand when streaming became the norm around the world.

“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.”

Some executives and campaigners say the Scandinavian nation demonstrates that a deep social safety net, often viewed as counter to entrepreneurial spirit, can foster innovation. It’s an outcome that might not have been envisaged by the architects of Sweden’s welfare state in the 1950s.

Childcare is, for the most part, free. A range of income insurance funds can protect you if your business fails or you lose your job, guaranteeing up to 80% of your previous salary for the first 300 days of unemployment.

“The social safety net we have in Sweden allows us to be less vulnerable to taking risks,” said Gohar Avagyan, the 31-year-old co-founder of Vaam, a video messaging service used for sales pitches and customer communication.

STARTUP RATE VS SILICON VALLEY

Although overall investments are larger in the bigger European economies of Britain and France and their longstanding finance hubs, Sweden punches above its weight in some regards.

It has the third highest startup rate in the world, behind Turkey and Spain, with 20 startups per 1000 employees and the highest three year survival rate for startups anywhere, at 74%, according to a 2018 study by OECD economists.

Stockholm is second only to Silicon Valley in terms of unicorns – startups valued at above $1 billion – per capita, at around 0.8 per 100,000 inhabitants, according to Sarah Guemouri at venture capital firm Atomico.

Silicon Valley – San Francisco and the Bay Area – boasts 1.4 unicorns per 100,000, said Guemouri, co-author of a 2020 report on European tech companies.

No one can say for sure if the boom will last, though, in a country where capital gains are taxed at 30 percent and income tax can be as high as 60 percent.

In 2016, Spotify said it was considering moving its headquarters out of the country, arguing high taxes made it difficult to attract overseas talent, though it hasn’t done so.

Yusuf Ozdalga, partner at venture capital firm QED Investors, said access to funding and administrative or legal tasks connected with founding a company could also prove tough to navigate for non-Swedish speakers.

He contrasted that to Amsterdam, capital of the Netherlands, where the government adopted English as an official language in April to make life easier for international companies.

‘INTERESTING DILEMMA’ FOR VC

Jeppe Zink, partner at London-based venture capital firm Northzone, said a third of all the exit value from fintech companies in Europe – the amount received by investors when they cash out – came from Sweden alone.

Government policy had contributed to this trend, he added.

“Its an interesting dilemma for us venture capitalists as we’re not used to regulation creating markets, in fact we are inherently nervous about regulation.”

Sweden’s digital minister Anders Ygeman said that social regulation could make it “possible to fail” and then “be up and running again” for innovators.

Peter Carlsson, CEO of startup Northvolt, which makes Lithium-ion batteries for electric vehicles and is valued at $11.75 billion, said that ultimately success bred success.

“You’re really creating ripple effects when you’re seeing the success of somebody else and I think that’s perhaps the most important thing in order to create local ecosystems.”

By and

Reporting by Supantha Mukherjee and Colm Fulton in Stockholm; Editing by Pravin Char

Source: How Sweden became the Silicon Valley of Europe | Reuters

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Darktrace London Listing Sees Shares Leap 40%, Shoots Towards $3.3 Billion Valuation

Darktrace IPO on the London Stock Exchange raises $160 million.

Cybersecurity startup Darktrace, one of the U.K.’s most promising tech companies, has started trading on the London Stock Exchange, valuing the business at $2.3 billion (£1.7 billion). The company said Friday morning that it had raised $200 million as a result of the initial public offering (IPO).

Trading began at 8am London time under the ticker “DARK” and has had an auspicious opening, with shares trading up from 250p per share to 350p on opening. That would give it a market cap of $3.3 billion.

It’s an exciting start for the cybersecurity company, which had been dogged by the continuing allegations of fraud facing one of its key investors, Mike Lynch, who helped launch the company back in 2013. Lynch is facing extradition to the U.S. where he faces criminal charges relating to HP’s $11 billion acquisition of his old company Autonomy. Lynch has denied all wrongdoing.

Reports had also raised issues around Darktrace’s hard-driving sales culture, whilst Forbes had previously reported on the abiding influence of Lynch and another former Darktrace director, Sushovan Hussain, who was convicted in the HP fraud case, though has been fighting an appeal. There were also allegations of sexual harassment within the startup.

Lynch and his wife together own 18% of Darktrace, whilst Hussain owns just below 3%.

The Darktrace offering will also be a boon for the London Stock Exchange, which has struggled to compete with New York and Hong Kong for high-growth tech listings, with food delivery startup Deliveroo’s IPO flop weighing on its prospects. Shares of the company slumped 30% on opening. That knocked $2.6 billion off the Amazon-backed company’s value.

“Our company is deeply rooted in the UK’s tradition of scientific and mathematic research so we are especially proud to be listing on the London Stock Exchange,” said Poppy Gustafsson, chief executive of Darktrace. “This is a momentous day for Darktrace and for the UK’s unparalleled science and technology sector.

“Our mission has always been to apply fundamental technology to the universal challenge of cybersecurity and we would not have got to this point without the determination and dedication of our talented employee base, as well as the continuing loyalty and feedback from our customers. As we look to the future, we are eager to build on our AI technology and to accelerate its deployment in existing and new markets worldwide.”

Darktrace claims its artificial intelligence can learn how networks operate and then spot anomalies, with the ability to eradicate threats on its own without human intervention. It’s one of a handful of British tech companies worth more than $1 billion, in a country where few cybersecurity businesses grow so large or go public. Its past customers have included corporate giants like BT and HSBC.

The company says it plans to use its new funds to invest in its research center in Cambridge, U.K., and expand globally.

Thomas Brewster

I’m associate editor for Forbes, covering security, surveillance and privacy. I’m also the editor of The Wiretap newsletter, which has exclusive stories on real-world surveillance and all the biggest cybersecurity stories of the week. I’ve been breaking news and writing features on these topics for major publications since 2010. As a freelancer, I worked for The Guardian, Vice, Wired and the BBC, amongst many others.

Source: Darktrace London Listing Sees Shares Leap 40%, Shoots Towards $3.3 Billion Valuation

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British cybersecurity company Darktrace Plc is cutting the value of its imminent London flotation as it adopts a cautious approach aimed at avoiding a repetition of Deliveroo’s disastrous public debut, Sky News reported citing people it didn’t identify. Darktrace and its advisers are leaning toward a price range that will put a valuation of about 2.4 billion pounds ($3.3 billion) to 2.7 billion pounds ($3.75 billion) on the loss-making company, Sky said.
The details are likely to be set out in an announcement to the London Stock Exchange that could come as soon as Monday morning, Sky said. Darktrace’s initial public offering in London is expected to value the company at about $3 billion to $4 billion, Bloomberg News reported April 12, citing a person familiar with the matter. Darktrace and shareholders plan to sell at least 20% of the company’s equity, and the stock will trade on the London Stock Exchange’s premium market and be eligible for FTSE’s benchmark stock indexes, the company said in a statement. All data is taken from the source:
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With $27 Million In Funding, A Tiny Fintech Takes Aim At Cigna, Aetna And UnitedHealthcare

Level’s early team. From left, software engineer Vikas Unnava, CEO Paul Aaron and strategy lead Ashley Koh.

There’s no reason why paying for a root canal should be more complicated than paying for a steak dinner. That’s how it looked, at least, to Paul Aaron, one the first 20 employees at digital payments giant Square and later a product manager at Oscar Health, the direct-to-consumer health insurance upstart founded in 2012. Connecting the dots between these two jobs inspired him in 2018 to build Level, a New York startup hoping to sell employers on more efficient and affordable insurance benefits for their employees.

“The big insight behind Level was this idea that insurance is just a way to pay for things,” says CEO Aaron, speaking at 6:30 a.m. over a zoom call from Hawaii (he’s keeping East Coast hours). “It’s a product that people really depend on, but it’s actually pretty confusing and sometimes can feel very unfair to us.”

After launching employer-sponsored dental plans in 2019, Level closed a $27 million Series A round at a valuation north of $100 million in late 2020, previously unannounced until today. Lightspeed Venture Partners and Khosla Ventures led the round, joined by First Round Capital FCAP 0.0% and Homebrew. The company added vision coverage in January, is hiring more staff and soon plans to expand into other employee benefits—making benefits better than a salary’s cash component is Level’s “north star,” Aaron says.

Employees who have access to Level through their work can use its app to search for providers, compare prices for various services, book appointments and handle co-pays then and there, no insurance card or belated paper bills in sight. Claims are typically processed within 4 hours, compared to 30 days or more with some mainstay providers. And while users can see any dentist or optometrist, more than 100,000 providers have an in-network contract (and access to software that tracks patient visits and billing) with Level.

Current customers include several mid-size tech companies like Intercom and Udemy and Level investor First Round.  Aaron says his startup saves employers money by giving them insights into the benefits that their workforces uses, allowing HR teams to customize plans and ultimately pay only for the services they need. Intercom, a business messaging startup, says it saved 20% from its previous dental provider, while adding more benefits—such as coverage for adult orthodontia—for its approximately 600 workers. First Round claims it saved 47% year-over-year after switching to Level’s dental coverage.

The funding announcement also accompanies the launch of a new insurance product underwritten in-house. Unlike most traditional group insurance arrangements, where companies annually forfeit the cost of benefits not used by workers, Level now allows businesses to pay a fixed amount each month and receive a refund at the end of the year for any unused benefit.

Critically to companies with tight balance sheets, they will never have to pay for costs beyond the monthly fee. The shift allows businesses as small as two people to adopt Level’s self-funded model historically accessible only to large corporations that could absorb the cost of unexpected, expensive procedures like an emergency surgery. (And luckily for Level’s costs, these hefty bills aren’t as common in dental or vision care.)

Insurance is not the sexiest industry, but it is lucrative. In 2019, U.S. healthcare spending reached $3.8 trillion, more than 17% of the gross domestic product that year, according to the Centers for Medicare & Medicaid Services, and census data indicates that about 55% of the population—more than 180 million people—received employer-sponsored insurance. Venture capitalists have taken note, investing more than $7 billion across 377 “insurtech” deals in 2020—a four-fold dollar-amount increase from 2016, per private markets data provider CB Insights.

Level won’t have an easy path, as it takes on giants with footprints to match. Healthcare insurer Cigna CI -0.7% counts more than 17 million global dental customers, Aetna AET 0.0% has 12.7 million dental members and UnitedHealthcare Dental has enrolled more than 13 million Americans in its employer-sponsored, Medicare and Medicaid plans. Its largest rival, though, might be Delta Dental Plans Association. The organization covers more than 80 million participants across the country. [Update: Level claims it is negotiating partnerships with some big insurers.]

At 10,000 employees covered today, Level is barely a blip competitively—but Jana Messerschmidt, a partner at Lightspeed, has given the startup a vote of confidence twice over, having backed Level both personally and professionally. (She first joined the startup’s seed round as an angel investor in 2018 before Lightspeed hired her later that year.)

“This is one of these companies that has the potential to become Stripe-sized in this new fintech meets insurance tech space,” she says. “There are a lot of things that have to go right for the company for that to happen.”

I’m an assistant editor covering money and markets. Before joining Forbes, I worked at Bloomberg and Pitchbook News reporting on plastic straw bans, pizza robots and everything in between. I studied history and economics at the University of Virginia, where I also worked on the student paper and, more importantly, an underground satire magazine.

Source: With $27 Million In Funding, A Tiny Fintech Takes Aim At Cigna, Aetna And UnitedHealthcare

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How The New Domain Extensions Can Help Your Business Look More Relevant

Are you looking to add legitimacy and relevance to your business? The first step is to get a website, as most people now go online first when looking for products and services. Before you can launch a website, you must register a domain name, selecting a domain extension that suits your business.

To those who have no idea about what domain extensions are, these happen to be that part of the website domain name that appears on the other side of the dot — like .com, .in, .net, and so on.

There are now hundreds of these to choose from.

Domain extensions are also referred to as TLDs or Top-Level Domains. Let’s take a closer look at how domain extensions can help your business thrive.

The importance of domain extensions

Google search results showing cotton manufacturers in Gujarat

Your web address is very important because it acts as a digital calling card. It is usually the very first thing that people see on Google when they search for a service or product.

How your web name ends makes people take instant calls about what type of website you have.

For instance, a technology firm could use .net as a domain extension, as it is associated with ISPs and other tech providers.

A business located in India might choose the .in domain extension for its web address, as this is known as India’s TLD.

The most well-known of domain extensions — .com — has become the go-to choice for any internet-based business. But as ecommerce grew tremendously over the years, many of the shortest and most valuable .com domain names have already been registered. Hence, it became necessary to have many more domain extensions made available (see complete list).

Why opt for new TLDs rather than .com

There has been a veritable explosion in the number of new domain extensions. For example:

Opting for a new domain extension can change the way your business or organization is perceived by its target audience. There are several other advantages to using one of the new domain extensions for your web address. Let’s take a look at what these may be in some greater detail.

1. A more memorable website domain name

A name that is easy to remember is half the battle won when it comes to getting found on the internet.

It’s time to look beyond .com.

A domain extension name that resonates with your target audience and makes them come to you is something one should be looking at. It will have a tremendous impact on the effectiveness of your digital efforts.

2. Improved branding

Not only is the right kind of domain extension easy to remember and relate to, but it also helps enhance branding across the services one offers. Besides, easy to use names are less likely to be misspelled during the search process.

3. Better defined organization

A suitably chosen domain extension will instantly identify the line of work carried out by a business or an organization. An Indian non-profit would, for instance, be well advised to use a .org.in domain extension to identify its area of expertise and its location. It would help the organization make its presence felt in its specific niche, which can only augur well for its outreach efforts.

4. Establish a business identity

A domain extension should be able to establish a business’s identity like nothing else. An architect’s firm, for example, would do well to use the .archi domain name that would have synergy with its business.

5. Help diversify

If your line of work has expanded and your current domain extension does not seem to adequately represent the changed status of your business, a change in domain extension could help correct that impression. If you are a

n exercise instructor who has also started giving yoga lessons, you might want to adopt the .guru extension to reflect the change.

6. Create a strong solo brand

A lot of people who are strong solopreneur brands by themselves can further accentuate their brands by choosing an appropriate domain extension. This will help one obtain much better results in organic searches of one’s personal brand name. Changing your existing brand name to your legal name lets you leverage your personal clout to help enhance your brand image.

Give the new domain extensions a look

The importance of a domain extension cannot be underestimated, in that it defines the very identity of a business, organization or individual in the online space. These days one can choose from a very large number of domain extensions, whose names are far more reflective of what they represent than plain old .com.

Truly, a domain extension is much more than a mere web address of a business or organization. It is no less than a powerful marketing and branding tool that can help improve a business or organization’s prospects.

With hundreds of domain extensions to choose from, one can quite easily choose something that will represent the best face of a business or organization to its core target audience.

Indeed, those from large corporations and trading organizations to businesses, professionals and nonprofits would benefit immensely from a change of their domain extension.

Vipin Labroo

By: Vipin Labroo

Vipin Labroo is a content creator, author and PR consultant (not in any particular order). A member of the Nonfiction Authors Association, he has years of corporate experience working with an eclectic range of clients. In his line of work he writes press releases, articles, blogs, white papers, research reports, website content, eBooks and so on across segments like technology, business & marketing, internet marketing, healthcare, fashion, real estate, travel and so on. Vipin has earned a solid reputation for the sterling quality of his work across the English-speaking world. Connect with him on Twitter.

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