This Swedish fintech founder could have been a billionaire right now. Instead, he spent nearly all his equity on philanthropy and impact investing.

Niklas Adalberth

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Four weeks ago, Swedish fintech darling Klarna raised $1 billion at a $31 billion valuation, giving two of its cofounders – CEO Sebastian Siemiatkowski and former CFO Victor Jacobsson – fortunes of more than $2 billion each, per Forbes.

Niklas Adalberth, the third cofounder, could have been a billionaire too. He owned 8% of Klarna when he departed the “buy now, pay later” firm in 2015, which allows consumers to pay for items in installments. That equity would be worth nearly $2.5 billion today. Instead, he has sold down his stake over the years to fund his philanthropy and impact investing. His remaining stake of 0.75% is worth some $230 million.

Adalberth, 39, had mixed feelings when he first heard about the massive round. He was happy for his colleagues but couldn’t help but wonder how much more he could have raised for his non-profit if he held onto his equity longer. Klarna, founded in 2005, has surged in value by nearly 1,300% since Adalberth left his post as deputy CEO.

But he doesn’t regret his decision. Adalberth has spent 140 million euros (about $165 million) to fund the Norrsken Foundation, a non-profit he founded in 2016. He wants to inspire European entrepreneurs to give while they live and invest in companies that tackle social issues such as climate change and mental health.

“People talk about the compound interest being the eighth wonder of the world. I think the same goes for impact. The earlier you start trying to create impact, that could also have a snowball effect for the future,” Adalberth told Insider from his home in Stockholm. “Should I have stayed at Klarna to try to grow my equity? Or did it actually make sense to spend my money now when the world needs it the most? The decision is quite easy.”

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‘I’ve created something net-positive.’

Adalbert was 24 when he founded Klarna with two friends, Siemiatkowski and Jacobsson.

“When I started Klarna, I had this belief that money correlated with happiness,” he said. “It was really egotistic from a start in that sense.”

In 2012, the trio was able to sell off shares in Klarna for the first time after a fundraising round. Overnight, Adalberth had $10 million in his bank account. He decided to celebrate by stopping by Las Vegas while flying from Stockholm to San Francisco for a conference. He splurged on a business class flight, a hotel suite overlooking the Strip, fine dining, and a designer shopping spree.

“But living this dream, I started to get this bad feeling that, ‘Hey, I can’t really taste the difference between this wine and the s— wine I have at home. I don’t sleep better in this panorama suite compared to my IKEA bed at home,'” he said. “I started to look at these [shopping] bags, and they looked back at me as if they had some kind of message. And that message was, ‘You’re so pathetic. How could you believe that all of this consumption or stuff could in any way buy happiness or …read more

Source:: Businessinsider – Finance


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