Klarna Co-Founder Among Swedish Startup Execs Funding Social Change

The leaders behind Klarna, Minecraft and Candy Crush Saga are joining other startup founders and H&M’s founding Persson family to fund firms that are trying to solve the world’s biggest problems, the Financial Times (FT) reported Monday (Dec. 23).

The group’s €100 million ($111 million) Swedish fund will put money into companies seeking to solve worldwide challenges like poverty, food waste and climate change. It also hopes to prove that impact investing can reap financial returns on par with other investments.

The fund recently closed on €61 million ($67.6 million) and anticipates raising the full €100 million by spring 2020.

“There’s a mantra among investors that you can’t do impact investing and get competitive returns,” Niklas Adalberth, co-founder of Swedish payment unicorn Klarna and a general partner in the fund, told FT. “We really want to prove this wrong. If we can show that it’s possible to do impact with competitive returns, maybe we can inspire the big capital to follow.”

“The larger institutions are very conservative,” he added. “It’s hard to get past the switchboard if you talk about impact. A traditional pension fund is required to make a high return and is not able to take the risk. That is why we need to go first and show what is possible.”

Adalberth has set up the fund through the Norrsken Foundation that he founded three years ago after being disappointed with “the constant chasing of the next goal or achievement” at Klarna.

In addition to Adalberth, FT said the new fund is supported by “Carl Manneh, co-founder of Minecraft-creator; Filip Tysander, founder of watch brand Daniel Wellington; Sebastian Knutsson, co-founder of Candy Crush Saga maker King Digital; and Ramsbury, the family office of the Persson family, which founded and controls H&M.”

Former Morgan Stanley banker and general fund partner Agate Freimane, said the organization is the biggest early-stage impact investment fund in Europe and maybe even in the world.

“We feel there’s a strong momentum building around impact,” she said. “When you look today, many of the top graduates from university are thinking about launching impact start-ups.”