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Paypal is investing in one of Sweden’s most promising fintech firms – The Story Behind Tink


THE DATA-DRIVEN APP THAT BANKS WANTED TO STOP. TOO LATE. In 2012, Swedish Tink launched as a service that could read your expenses and income, categorize it and could pinpoint and present where your money was being spent on a monthly basis. Simple? The only problem was the issue of security – to use the service, it is required that the user shares their PIN for a simplified login which is used for banking services. The Tink service itself, on the other hand, could only be used to view information – not to carry out transactions. That was the initial stage of Tink, which undoubtedly raised concerns about privacy, even though at the time it wasn’t as widespread as the debate is today. Back then, there was a fair share of disbelievers and doubters but Tink has managed to pull through and placed itself in the spotlight this week with a 105 million Swedish Crown investment from Paypal (!). The tenacity of such a seven-year journey can only be respected. 
Tink began as an app for users that wanted to understand their finances better and receiving a clear overview of your activity. By linking your bank (or banks), to the app, Tink can automatically categorize your expenses and you can follow how expenses and income change over time. In 2012, there were a number of such apps trying to penetrate the market but Tink tenaciously held on. Tink simply gave the user the possibility to interpret large amounts of transaction data from the banks, in order to give the user clearer insight. The connectivity to bank accounts led to more than a few frowns from the side of the banks, however. Up until 2015, startups had to ask banks for permissions about connecting with the app and in most cases the banks said no. Fortunately for Tink, an EU directive would come to their defence – a directive that was not a case of fortune favouring the lucky but two years of hard work, with Tink acting as part of the Swedish government’s own reference group to the directive itself. After two years negotiating the EU directive, named PSD2, which finally allowed apps into the bank account. Was this a lifeline for Tink?
Photo: PRESS
Since then, Tink has constantly been growing with new features adapted to what is possible with today’s technology and privacy regulations – it led to the addition of, for example, making transfers between accounts and paying e-invoices. Banks have, interestingly enough, started to use the service themselves with developers using it when they need help with building digital services. One example is the SBAB bank’s service for comparing mortgages, which is based on Tink’s platform. By the end of 2016, Tink had 350 000 users and the enterpreneurs that made this a reality, Daniel Kjellén and Fredrik Hedberg were ready to take the chance for Tink’s long-term prospects to increase. They did so by taking in 129 million SEK from a round of financing the following year. Investors included SEB, Nordea, Nordnet, ABN Amro, Creades and Sunstone.

A few concerns came for the company in 2018 – it became known that there were a few competitors working on similar apps – one of them being Klarna, a major online services bank founded in 2005, that was creating a private economy app of its own. Klarna’s new solution will, among other things, offer a kind of overview mode over the user’s purchase habits in the style of Tink – in the new version, the users also have the opportunity to choose the payment method in a different way than before and receive reminders of payments through push notes, before they expired. [Source: Breakit]



Fast-forwarding to this year, or this week in fact – Tink received news from the big sharks of the tech-sphere. It was the stamp of approval that solidified its presence in the industry for some time to come. This stamp of approval came with a SEK 105 million investment in the company from Paypal. Paypal, as can be exemplified by buying iZettle last year (which was one of the largest deals of that year involving Swedish firms), has taken a keen interest in Sweden. The investment is a part of round of financing that the company carried out earlier this year – it took in over in SEK half a billion. The company was then valued at over SEK 2 billion. Paypal will also start using Tink’s technology in its payment service, with over 277 million users. This will drastically increase its presence online and should see a significant boost in image by association with Paypal. What about its future plans? “We have the ambition to later take it outside Europe,” says Daniel Kjellén to DI Digital. 
. . . From a startup that once worried about banks putting an end to its ability to stay afloat, to a company receiving million-dollar investments from giants in the industry and banks using the service themselves. It’s safe to say that Tink’s latest round of success will allow it to position itself competitively even amongst the ranks of other Swedish success stories. Sooner or later, the potential of Sweden’s fintech sphere will surely run out. Or will it?
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