Introduction to Copenhagen FinTech

It all started in 2016 with a report stating that, in order for Denmark to play a role in FinTech, more ambition was needed. Subsequently, three actors – the Danish Bankers Association, the Danish Financial Services Union and the Municipality of Copenhagen –  came together along with a number of commercial partners to create two different entities: the umbrella organization, CPH FinTech, and a physical space, the Lab. The Lab, home to approximately 50 startups, facilitates both incubation, acceleration and wider engagement with Nordic and international startups.   

This week, the Lab opens up for outsiders for the first time since the onset of the crisis. We spoke to Thomas Krogh Jensen, CEO of Copenhagen FinTech, to learn more about the Lab and the role of FinTech during and after the crisis:  

“Since launching in 2016, we have had approximately 130-140 startups come through the space, some of which have been with us for the entire four years since we launched. Companies typically stay with us and move on to their own space once they reach 8-12 or more employees. Approximately two-thirds of the companies are currently collaborating internally, and they can also help each other with regulatory issues, legislation and things like that. They can get advice and mentoring from the Lab’s partners and sponsors, and many of them also become partners and sponsors themselves once they become scale-ups.  

The ecosystem has developed quite a bit over the past four years, and on the technology side, it is rapidly maturing. CPH FinTech has become quite a vibrant hub for technologies like blockchain, with previous residents such as Chainalysis. Chainalysis does anti-money-laundering investigations in crypto. We also have companies such as Bitcoin Suisse, Deon Digital and Firmo (acquired by eToro in 2019). Aside from blockchain, we see a lot of companies implementing AI and Machine Learning to their products and services.”  

Mobilising the ecosystem in response to Covid-19

At the end of March, Copenhagen FinTech published an overview of Danish FinTech companies who offer support during the crisis. Thomas shares his thoughts behind the initiative and elaborates on the current situation.  

“With regards to the overview, we approached it in ‘the startup way’, like: ‘let’s just get it out’. Although the overview is by no means exhaustive, after 4-5 iterations we were able to get to where we’re at now, listing almost all Danish FinTech companies.  

With regards to trends, it is clear to me that there is a duality between an increasingly interconnected, global world and our smaller, local communities. With the pandemic and subsequent lockdown in Denmark, I think we realised how important our local businesses are – and how much they are suffering during this crisis. A lot of the local coffee shops, hairdressers…etc. in my area have come up with innovative ways to source the necessary liquidity they need to survive. They resort to things like crowd-lending to crowdfunding as well as direct donations. Companies such as Lendino and Flexfunding are able to address this pain point.  

I believe these types of solutions will be revitalised as we recognise the importance of being able to deploy liquidity here and now.  A report from JP Morgan concluded that, the median small business holds 27 cash buffer days in reserve. As you can imagine, in times like this, 5-6 weeks of nation-wide lockdown is a problem for these businesses. Waiting for 60-90 days for payment from invoices to go through simply isn’t an option. This is where a company like Moneyflow can step in, providing quick access to liquidity. Solutions built on other datasets, for example PSD2 data, can help in the credit storing and provide some attractive models for credit scoring.”   

Collaboration between government and FinTech startups

Deploying FinTech services in times of uncertainty presents both challenges and opportunities. This applies to both b2b, b2c and, in the GovTech context, b2g. Thomas explains how governments can support the transition towards a more collaborative relationship with innovative startups.  

“There are several possibilities. For example, one of the relief packages for state guarantee on loans, issued by the Danish Growth Fund, is including crowd-lending.   Another example is CrediWire. Shortly after relief packages were accepted at the government-level, CrediWire launched their solution. In the CrediWire solution, an SME can go to Crediwire and grant them access to their Cloud Accounting data in order to see if they are eligible for funding. CrediWire can also assess how much money the company is eligible to apply for and generate the necessary documentation for the company and the accountants. This solution mobilised much faster than anything else I have seen and is a good example of collaboration with larger banks and public sector agencies.  

On the note of local communities, it was our ambition to support a nationwide platform to connect struggling businesses with people who may have some spare cash to spend upfront, on prepaid services, for example. This idea has been consolidated into a single platform called ‘Your Local’ with 429 local businesses registered so far. This initiative grew from the bottom up and then gained support from the top – a great illustration of collaboration between government and startups.   

The speed and agility of these solutions does point to the challenges. Everyone is busy trying to save whatever they were put in the world to do. As a result, startups may struggle to get the attention of the government, even though the solution is already available and accessible. Reversely, the tech ecosystem also has work to do. From a government-perspective, the amount of well-intentioned people reaching out is overwhelming.   

As cluster organisations, we have a responsibility to funnel these many initiatives. Ideally, we will appoint a point of contact that can navigate the landscape and ask the critical questions. Who really has a real solution for a real – and urgent – problem? It’s great to work with startups, but at the end of the day, the technology has to be robust enough to serve up to 30 million people in the Nordics. This is a great example of a conversation we will be having at CPH FinTech hub.  

Visions for FinTech in a post-Covid-19 world

Insights and learnings from the crisis fuel a more fundamental change in the way society operates. Thomas shares his hopes and ambitions for Copenhagen FinTech Hub and FinTech startups more broadly.  

“First of all, we’re reaching out to other Nordic FinTech Hubs and mapping existing solutions in the ecosystem. With Iceland complete, it shouldn’t take long to establish a complete framework of all the companies in this space. Secondly, we have begun a dialogue with the UNDP regarding different challenges in not only Denmark but also the rest of the Nordics. This is a global challenge for small- and medium-sized companies, and hopefully through a program we can convey information on solutions on a global scale.  

With regards to Copenhagen FinTech Hub, we expect to reopen the lab to outsiders this week. Our immediate task is to help the many tech startups with their different struggles. Those who didn’t finish their rounds before Covid-19 have immediate concerns. Then there are those that have finished their rounds but won’t be able to reach their KPI’s during the crisis. Addressing these different types of struggles is a challenge in itself.   This reminds me of an interview we did with some of our FinTech friends in China, one is the vice prresident from Shanghai Blockchain Association, the other is heavily involved with AliBaba. They talked about how in China, 3-4 weeks ago, they were ahead of Europe. Europe was struggling due to manufacturing issues in China, the factories were shut down, now it’s the other way around, the factories are opening up, but European consumers aren’t buying stuff, so they’re struggling – just in a different way.   

And when it comes to events like Copenhagen FinTech Week, we’ll have to go virtual. Will people even travel after the crisis is over? No matter what, I think we will wake up to a very different world.”  

About Thomas Krogh Jensen:

Thomas Krogh Jensen is the CEO of Copenhagen FinTech Hub. Thomas has extensive experience with leadership and management in large Nordic and global financial institutions on a senior level. Whether operational or strategic, the keywords have been management of significant changes along with the ability to execute and transform strategies into everyday actions.
Contact Thomas here.


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