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Nordnet AB: The Nordic Savings Revolution
I. Introduction: A Trillion-Krona Digital Empire
On a January morning in 2025, Lars-Åke Norling stood before analysts and investors to deliver news that would have seemed fantastical to the small team that launched Nordnet nearly three decades earlier. "2024 was a record year for Nordnet. At the turn of the year, customers' total savings capital amounted to SEK 1,032 billion, an increase of 25 percent from the previous year." One trillion Swedish kronor—roughly €90 billion—entrusted to a platform that began life in a Stockholm office with a radical idea: that ordinary people deserved the same investment tools as financial professionals.
Nordnet was founded in 1996, becoming the first Internet broker in Sweden, and has expanded since to provide other saving and investment services. Nordnet AB (publ), commonly shortened to Nordnet, is a pan-Nordic financial services company, headquartered in Stockholm, Sweden. What started as a dot-com era experiment in democratizing finance now operates as the leading digital savings platform across all four Nordic countries—Sweden, Norway, Denmark, and Finland.
The company welcomed 256,300 new customers during 2024, surpassing a total of 2 million customers. Nordnet's customers had a net savings of SEK 73 billion, more than double the amount from 2023. These aren't just impressive numbers—they represent a fundamental shift in how an entire region manages its financial future.
The central question of Nordnet's story deserves examination: How did a dot-com era startup survive the tech bust, challenge the Nordic banking establishment, undergo a private equity transformation, re-emerge as a public company at the height of a pandemic, and now position itself for European expansion? The answer reveals lessons about first-mover advantage in digital disruption, the strategic value of private equity ownership when properly executed, and the power of geographic expansion in platform businesses.
Nordnet has a vast history, was founded in 1996 as one of the first online brokers in the Nordics. "We started as a reaction to the outdated structures in financial sector." That founding principle—that technology could democratize access to financial markets—has driven nearly three decades of strategic decisions, from the early mobile trading apps to the January 2025 announcement of German expansion.
The outline of this story follows Nordnet through several distinct phases: from pioneering internet brokerage in the mid-1990s, through pan-Nordic expansion via acquisition, into a transformative period under Nordic Capital's ownership, back to public markets in November 2020, and finally to its current position as an expansion-minded platform business with ambitions beyond Scandinavia.
II. The Nordic Context: Why Sweden Birthed Online Brokerages
To understand why Nordnet emerged from Stockholm rather than Frankfurt, London, or New York requires examining the unique conditions of Sweden in the mid-1990s. The country had experienced a brutal financial crisis in 1992, with government expenditure reaching almost 76% of GDP by 1995. Yet from that crisis emerged reforms that would make Sweden unexpectedly fertile ground for financial innovation.
As the debate on Social Security reform continued, Sweden added an individual accounts tier to its public pension system in the late 1990s. The Swedish system of individual accounts, called the premium pension, deposited 2.5 percent of payroll into an account managed by a fund manager chosen by employees from a list of approved funds. In the initial round of sign-ups, workers could choose from 465 approved funds.
This created something remarkable: a population suddenly required to make active investment decisions about their retirement savings. The system engineers, following neoliberal ideas, sought to fulfil the objective of institutionalising a mass investment culture. Unlike Americans who could passively let Social Security handle retirement, or Germans who relied heavily on employer pensions, Swedes were being pushed—by their own government—toward becoming investors.
Sweden has one of the oldest and most comprehensive public pension systems in the world. The state is clearly the dominant pension provider: in 1991, Swedes aged 66 and older received an average of 84.1 percent of their pension income from the state pension system. The pension reforms of the 1990s changed this dynamic profoundly, creating an entire generation that needed to understand stocks, funds, and asset allocation.
Simultaneously, Sweden was establishing itself as one of the most internet-connected nations on earth. By the mid-1990s, tech companies like Ericsson were global leaders in telecommunications, and Swedish households were adopting internet access at rates that outpaced most of Europe. The conditions were aligning: a savings-oriented culture, pension reforms requiring active investment decisions, high technology adoption, and a banking sector still operating with the high-fee, branch-based models of the previous century.
Traditional Swedish banks viewed retail savings as a captive market. With their extensive branch networks and established relationships, SEB, Nordea, Handelsbanken, and Swedbank assumed customers would always need physical locations and relationship managers. Their fee structures reflected this assumption—and the complacency that often accompanies oligopolistic comfort.
Into this environment arrived Nordnet, starting business on August 20, 1996, as a pioneer in the Nordics within online brokerage. The business initially consisted of trading in Swedish shares. The founding team recognized that the combination of internet technology and pension reform created an opportunity to bypass the traditional banking infrastructure entirely.
During the next few years, there were many more "firsts" to come. We were pioneers in offering real-time share prices, real-time trading in options and mini-futures, trading in American shares as well as trading in mutual funds with no trading fees.
The timing matters enormously. Launching in 1996 gave Nordnet a full four years of brand-building and capability development before the dot-com bubble burst in 2000. This head start would prove crucial—by the time the market crashed, Nordnet had established enough credibility and operational experience to survive when competitors disappeared.
III. Early Years: Building the Digital Foundation (1996–2002)
The Nordnet that opened its digital doors in August 1996 was not a well-funded startup with venture capital burning a hole in its pocket. Nordnet was originally founded as an online brokerage subsidiary of the Öhman financial group. This parentage provided both stability and constraint—access to financial expertise and regulatory credibility, but also the need to prove value to an established institution.
The Öhman Group, a family owned financial group founded in 1906 by Emric Öhman, represented old Swedish finance. That such an establishment player would spawn an internet disruption speaks to either remarkable foresight or fortunate experimentation—perhaps both. Either way, Nordnet emerged with advantages that pure startups lacked: regulatory relationships, financial expertise, and a parent willing to provide runway during the inevitable early losses.
In 1999, we established Nordnet Luxembourg. International ambitions came early, reflecting confidence that the online brokerage model could translate beyond Sweden's borders. The Luxembourg operation provided access to pan-European markets and signaled aspirations beyond domestic dominance.
The first major inflection point arrived in 2000, at what would prove to be the peak of the dot-com bubble. Nordnet AB (publ) was listed on the Stockholm Stock Exchange in 2000, and we received our banking license in 2002. For the first time, Nordnet was traded on the Nasdaq Stockholm between April 2000 and February 2017.
Listing at the bubble's peak might seem fortunate timing, but it also meant weathering the subsequent crash as a public company—with quarterly reporting obligations and skeptical investors questioning whether the internet brokerage model had any future at all. The banking license obtained in 2002 proved more durably valuable, enabling Nordnet to expand beyond pure brokerage into deposit and lending services.
We were developing quickly during these years, merging with our competitor Teletrade and establishing our businesses in Norway and Denmark. Our customers enjoyed several new features, such as a marketplace for hedge funds, a trading application (Wintrade) and a low-price investment platform (Aktiedirekt).
The Teletrade merger deserves attention. While many dot-com era companies were imploding, Nordnet was consolidating. Acquiring a competitor during the industry's darkest hours demonstrated both financial resilience and strategic opportunism. This pattern—using downturns for strategic acquisition—would become a recurring theme in Nordnet's history.
The years 2001-2003 tested the conviction of everyone involved in online brokerage. Across the Atlantic, E*Trade and TD Ameritrade were fighting for survival. In Europe, dozens of similar ventures simply vanished. Nordnet's survival through this period created durable brand equity—customers who stayed learned to trust the platform, and the company that emerged from the wreckage had proven it could weather existential storms.
By 2002, Nordnet had achieved something rare among dot-com survivors: profitability and a banking license. This combination positioned the company for the expansion phase that would follow.
IV. Nordic Expansion & Platform Building (2004–2016)
The recovery of equity markets after 2003 provided favorable conditions, but Nordnet's expansion strategy derived from a clear thesis: that pan-Nordic scale would create competitive advantages unavailable to single-market operators. This is the period when we broadened our offer to include pension products – both private and occupational. The terms of our pension products were the best on the market, putting the customers' interest first. We started our business in Finland and thanks to our acquisition of Stocknet-Aston Securities ASA, we also entered the German market.
The 2004 acquisition of Stocknet-Aston Securities ASA facilitated entry into the Finnish market. Finland presented an attractive opportunity—a technologically sophisticated population with strong savings culture and banking sector dominated by traditional players. The acquisition approach, rather than organic market entry, allowed Nordnet to purchase existing customer relationships and local expertise.
Over the years, it has grown through acquisitions such as eQ Bank in Finland (2009) and Netfonds in Norway (2018). The eQ Bank acquisition in Finland demonstrated Nordnet's willingness to make substantial investments in market position. Rather than slowly building Finnish customer relationships, Nordnet purchased the biggest online broker in the country.
A critical strategic evolution occurred in 2004 when new Swedish legislation opened an entirely new type of insurance savings product. This is the period when we broadened our offer to include pension products – both private and occupational. Expanding into pensions transformed Nordnet's addressable market and business model. Pension assets are inherently long-term, creating sticky customer relationships and predictable revenue streams that pure trading businesses cannot match.
Building on this, Nordnet introduced fee-free Nordic index funds in 2014, offering exposure to regional markets without management fees and positioning the company as a cost leader in passive investing. This move anticipated the fee compression that would sweep the global asset management industry. By offering free index funds before competitors, Nordnet established cost leadership credentials that attracted price-sensitive savers.
Key innovations during this period included the 2016 acquisition and launch of Shareville, Nordnet's social investment network, which has continued to evolve as the largest of its kind in the Nordics, enabling over 300,000 users to share insights, follow portfolios, and discuss investments in real time. Shareville represented a bet that social features could differentiate financial platforms in ways that pure functionality could not. The network effects of a social platform—where each new user makes the service more valuable to existing users—created barriers to entry that traditional brokerage offerings lack.
In early 2016, Nordnet reached the milestone of half a million customers on a Nordic basis. We strengthened our loan offer and launched Sweden's cheapest mortgage during the same year, addressed to Private Banking customers.
By 2016, Nordnet had established presence across all four Nordic markets, expanded from pure brokerage into pensions and lending, launched innovative products like fee-free index funds and social investing, and built meaningful scale with 500,000 customers. Yet the company also faced challenges: technology infrastructure that had evolved piecemeal over two decades, increasing competition from Avanza in Sweden, and the strategic question of how to accelerate growth.
The stage was set for a fundamental transformation—one that would require the kind of focused, well-capitalized intervention that public markets often struggle to provide.
V. The Private Equity Transformation: Nordic Capital Era (2017–2020)
In October 2016, Nordnet was taken private by Nordic Capital and the Ă–hman Group, who shared the ambition to create a best-in-class customer experience in the digital savings industry. In 2021, the success-story was a fact.
Nordic Capital delisted Swedish share-trading platform Nordnet after the successful acquisition of 98.65% of shares in the Stockholm-listed company. The take-private transaction, completed in January 2017, represented a bet by Nordic Capital—one of Europe's most experienced financial services investors—that Nordnet's potential exceeded what public markets were recognizing.
The Ă–hman Group and Nordic Capital Fund VIII have through NNB Intressenter AB announced a public offer to the shareholders of Nordnet. Following completion of the Offer on 25 January 2017 NNB Intressenter owns and controls approximately 93.4 per cent of the capital and votes in Nordnet.
The rationale for going private centered on the investment requirements for platform transformation. Public company reporting cycles and margin expectations can create resistance to large upfront investments with multi-year payback periods. Nordic Capital specialized in exactly this kind of transformation—identifying companies where significant capital investment could unlock step-change improvements.
In 2017, Nordnet was taken private by Nordic Capital and the Ă–hman Group, with the ambition to create a best-in-class customer experience in the digital savings industry. As a result of significant platform investments, enhanced user experience and accelerated product innovation during the ownership of Nordic Capital and the Ă–hman Group, Nordnet has seen a considerable increase in customer activity and engagement, as well as a significant increase in market shares across the Nordic countries.
The transformation playbook executed during private ownership touched every aspect of the business:
In 2017, Nordnet became the first Swedish bank to offer direct deposits via Swish. Other examples of launches from the period 2017-2018 are brokerage-free trading in exchange-traded products, expanded offer in mortgages, new mobile application, share loan program and digital advisory services.
Product innovation accelerated dramatically. The new mobile application represented a complete reimagining of the customer interface—not incremental improvement to the existing platform, but a ground-up rebuild designed for mobile-first users. Brokerage-free trading in exchange-traded products attacked the traditional fee model at its core. The share loan program created new revenue streams by allowing customers to lend their shares to short sellers. Digital advisory services brought robo-advisory capabilities to a platform that had traditionally served self-directed investors.
In October we launched our stock lending program, which we were given the award "Savings Innovation of the Year" by the Swedish magazine Privata Affärer. During the quarter, we announced the acquisition of the Norwegian bank Netfonds and we were named "Stockbroker of the Year" in Denmark.
The industry recognition validated that external observers saw genuine innovation, not just marketing claims. The Netfonds acquisition in December 2018 proved particularly significant:
Nordnet today announces the acquisition of the Norwegian bank Netfonds. The merger creates the leading digital bank in Norway for savings and investments. Netfonds is one of the leading companies in Norway when it comes to online securities trading, and was Norway's first online broker. The company was formed in 1996 by Rolf Dammann, and offers trading in a wide range of securities. Netfonds today has more than 80,000 registered customers in Norway and Sweden, and a total of 17 billion NOK in savings capital.
"The most important achievement was that Nordnet grew to become one of the strongest brands in the Nordic countries in savings and investments – a real challenger to the traditional banks and pension companies. To get there, we made several strategic investments and successful product launches like launching of a new app, a new website and add-on acquisitions."
The metrics from the private ownership period tell a compelling story. In 2020, Nordnet reached a milestone of one million customers, effectively doubling its customer base since 2016. During the four years of Nordic Capital's ownership, Nordnet became a leading Pan-Nordic savings and investment platform with more than 1.5 million customers. At the end of 2020, the savings capital had more than doubled to SEK 565 billion.
"Very good. The entire management team at Nordnet enjoyed the partnership with Nordic Capital during their four years of ownership. They supported us in many ways, not least their constructive approach coupled with extensive experience in building industry leading businesses in the Financial Services sector."
This testimonial from management reflects what made the private equity period successful: alignment of interests, patient capital, and operational expertise. Nordic Capital didn't simply demand cost cuts—they invested alongside management in platform capabilities that would drive long-term competitive advantage.
VI. The Re-IPO: Perfect Timing (2020)
By late 2020, the transformed Nordnet was ready to return to public markets. The timing proved extraordinarily favorable—not because of clever market-timing, but because the COVID-19 pandemic had accelerated precisely the trends that benefited digital savings platforms.
Nordnet, the leading pan-Nordic digital savings and investments platform, completed its successful c. SEK10.4bn (US$1.22bn) IPO on Nasdaq Stockholm on 25th November 2020. STJ Advisors advised the Company and the Selling Shareholders - Nordic Capital, the Ă–hman Group and Dinkelspiel Family.
The offering priced at SEK96, in the middle of the price range with multiple times oversubscription. The Selling Shareholders' pricing decisions reflected a desire to promote a strong aftermarket and returns for all shareholders. They were rewarded with the stock trading up to close day-1 trading at SEK105 – a "model" c.9% above the IPO price on modest volumes.
In April 2020, Nordnet has reached a milestone of 1,000,000 customers. The pandemic lockdowns had driven millions of Nordic residents to their screens, with many discovering—or rediscovering—self-directed investing. Stimulus payments and reduced consumption opportunities created savings surpluses looking for investment destinations.
From 31 December 2003 to 30 September 2020, the number of customers and the level of savings capital grew by an annual compounded growth rate of 20.4% and 25.3%, respectively. In March 2020, Nordnet reached a milestone of one million customers, effectively doubling its customer base since 2016.
"The interest in Nordnet's return to the stock market has exceeded our expectations, and we are very grateful for the great trust that both private savers and institutions have shown us. The listing on Nasdaq Stockholm puts us in an even better position when it comes to continuing to deliver on the promise that we at Nordnet gave almost 25 years ago – to democratise savings and investments", says Tom Dinkelspiel, Chairman of the Board of Nordnet, representing the Öhman Group.
Tom Dinkelspiel's statement deserves attention. As representative of the Öhman Group—which had been involved with Nordnet since its founding—and as chairman throughout the private ownership period, his continuity provided reassurance to new shareholders. The Dinkelspiel family's continued substantial stake aligned their interests with public investors.
Immediately following the completion of the Offering, assuming that the Over-Allotment Option is exercised in full, Nordnet's largest shareholders will be Ă–hman Intressenter (approximately 22% of the total number of shares in Nordnet), Nordic Capital (approximately 9%) and Premiefinans K. Bolin Aktiebolag (approximately 9%). In addition, certain private individuals that are members of, or closely related to, the Dinkelspiel family will own approximately 14% of the total number of shares in Nordnet.
This ownership structure represented something unusual: a company emerging from private equity with the founding family still as the largest shareholder. Most PE exits involve maximum liquidity for the financial sponsor; here, the Ă–hman Group and Dinkelspiel family chose to remain substantially invested, demonstrating confidence in the post-IPO trajectory.
In November 2020, Nordnet was successfully listed on Nasdaq Stockholm at an equity value of approximately SEK 24 bn. The successful listing and subsequent strong share price performance reflect the strength of Nordnet's business and its fast growth. On 26 May 2021, Nordic Capital initiated an accelerated book building process to sell its remaining 9.2% shareholding to a group of long-term institutional investors.
The equity value of Nordnet on 26 May 2021 was SEK 38 bn. Just six months after the IPO at SEK 24 billion valuation, Nordnet was worth SEK 38 billion—a 58% increase that validated both the transformation under private ownership and the public market's appetite for Nordic digital finance.
VII. Modern Era: Platform Dominance & German Ambitions (2021–Present)
The post-IPO years have seen Nordnet execute on the platform advantages built during private ownership while preparing for its most ambitious expansion yet.
Since its 2019 re-listing, following a significant rebuilding of its platform, Nordnet has shown operating leverage. Revenue has compounded at 26% annually. More importantly, pre-tax profits have compounded at 54%! This isn't common.
These growth rates deserve context. Even tech-giants like Airbnb and Booking—often expected to demonstrate similar scalability—have struggled to keep expenses in check as they've grown in recent years. Nordnet stands out by doing more with less. Pre-tax margins are now ~60%!
We achieved an adjusted operating profit of SEK 3.6 billion for 2024 – our highest annual profit to date. Increased stock trading and growth in fund capital contribute to a net commission income of SEK 2.4 billion, the highest in three years.
The 2024 results set new records across virtually every metric that matters: Savings capital amounted to SEK 1,032 (825) billion as of 31 December 2024. The customer base increased with 141 percent to 2,096,400 (1,862,900) customers. Net savings amounted to SEK 72.9 (34.7) billion.
"The fourth quarter was a very strong financial period for Nordnet. With SEK 1,374 million in income, we achieved our highest level to date for an individual quarter, mainly explained by high income from share trading and fund savings. On the bottom line, we are able to present an adjusted operating profit for the quarter of SEK 919 million, the highest in Nordnet's history."
Beyond the financial results, Nordnet has continued expanding its product offering. In the fourth quarter, we launched the insurance-based pension product "livrente" in Denmark. This launch expands Nordnet's addressable market by SEK 2,000 billion, fulfilling our ambition to become a one-stop shop for pension savings in all our markets.
The livrente launch illustrates Nordnet's methodical approach to market expansion: rather than immediately pursuing new geographies, the company systematically captures more of the addressable market in existing countries by expanding product categories. This approach minimizes execution risk while maximizing revenue per customer.
But the biggest strategic announcement came in January 2025:
Commercial launch is expected in the second half of 2026. Nordnet is the largest digital platform for savings and investments in the Nordic region with 2.1 million customers and over EUR 90 billion in savings capital.
The German savings market is the largest in Europe and is more than twice the size of the Nordic savings markets combined. This despite the fact that a relatively low percentage of the population saves in shares and mutual funds today. However, interest is increasing all the time, which means that Germany offers a large and growing potential for Nordnet. The competition in Germany is tough, but I think we have a good possibility to succeed. We have an infrastructure that is relatively easy to replicate into a new market, and a proven history of expanding geographically.
Germany has close to 85 million inhabitants and is Europe's most populous country. The adult population amounts to just over 70 million people, and of these, around 17 percent today have savings in shares or funds.
The German opportunity represents a step-change in Nordnet's addressable market. A study of the German savings market carried out by Nordnet shows that digital banks and platforms are taking market share from traditional players. There is also a lot of mobility in the market, where around half of the savers have changed banks in the last two years. The three most common reasons for switching are fees, breadth of offering and mobile user experience.
The cost associated with the establishment in Germany is expected to be around SEK 60 million in 2025, and then gradually increase to around SEK 100 million per year from 2028. This relatively modest investment for such a large market opportunity reflects Nordnet's platform leverage—the infrastructure built to serve 2 million Nordic customers can extend to German users without proportional cost increases.
Most recent results confirm momentum continues. "For January-March, we can present an operating profit of SEK 985 million, which is 11 percent higher than the corresponding period last year and marks the [highest quarterly figure to date]. With an annual customer growth of 14 percent and an average savings capital per customer of nearly SEK 480,000, we are well within the scope of our customer-related financial targets", says Lars-Ă…ke Norling, CEO of Nordnet.
VIII. The Business Model Deep Dive
Understanding Nordnet's business model requires examining both its revenue composition and the operational leverage that has driven profitability expansion.
The company is divided into three business areas, Savings and investments, Loans, and Pensions. This simple categorization masks considerable complexity in how revenue actually flows.
Nordnet's revenue is more balanced than it may seem. It earns money from three main sources... These often offset each other. When trading slows, interest income may rise. When rates fall, markets usually improve, helping fund values and customer activity. So while earnings can swing quarter-to-quarter, the business model is quite resilient (and extremely profitable).
This natural hedge between revenue streams represents an underappreciated source of stability. Pure brokerage businesses face severe cyclicality—when markets decline, both trading volumes and customer balances fall simultaneously. Nordnet's diversification means that falling interest rates (which pressure net interest income) typically coincide with improving equity markets (which boost trading activity and fund values).
"We've grown revenue 25% per year since 2019 while costs only grew around 7% per year," stated CEO Lars-Ă…ke Norling during the earnings call, emphasizing the company's business model and operating leverage. The company outlined ambitious medium-term financial targets, including 13-15% annual customer growth and average savings capital per customer of around SEK 500,000. The company aims to maintain income in relation to savings capital at approximately 45 basis points while limiting adjusted operating expense growth to around 8% annually.
The gap between revenue growth (25% annually) and cost growth (7% annually) represents operating leverage in action. Platform businesses like Nordnet can serve additional customers at minimal marginal cost—the infrastructure required to support 2 million customers differs little from that required for 2.5 million.
Despite aiming for 13-15% customer growth, they only expect to grow operating expenses by 8%. This has probably been the most underappreciated strength of Nordnet's business, one which we would like to consider the effects of. Operating Expense growth of 9→7% would yield a 10-15% profit growth given a 10-13% revenue CAGR.
More importantly, Nordnet has successfully increased its net income per trade from SEK 23 in 2019 to SEK 37 in the last twelve months ending Q2 2025. Despite flat overall revenue, Nordnet has maintained a resilient revenue structure through diversification. The company's revenue streams include transaction-related income, fund-related income, net interest income, and other sources.
The increase in net income per trade from SEK 23 to SEK 37—a 61% improvement—reflects Nordnet's success in shifting customers toward higher-margin cross-border trading and away from commoditized domestic equity transactions.
Platform economics create what Hamilton Helmer would recognize as "scale economies"—costs that fall relative to competitors as volume increases. Nordnet's technology platform requires roughly similar investment whether serving 500,000 customers or 2 million. Customer acquisition costs have leverage too: brand recognition from serving 2 million Nordic customers reduces marketing spend required per new customer.
IX. Competitive Landscape: Avanza & Beyond
Nordnet: A close competitor to Avanza, Nordnet provides an excellent platform with advanced tools for both beginners and active traders. Nordnet, founded in 1996 and listed on Nasdaq Stockholm (NNB), is the other major Swedish online broker, and Avanza's main competitor. It operates across the Nordics (Sweden, Denmark, Finland, Norway), giving it a broader regional footprint.
The Nordnet-Avanza rivalry defines Nordic retail finance. Both companies emerged from the same 1990s disruption, both survived the dot-com crash, and both now count their customers in the millions. Yet strategic differences have created distinct competitive positions.
Currently, Nordnet has a total addressable market three times larger than Avanza's, encompassing all Nordic countries compared to Avanza's presence solely in Sweden. "Nordnet has built a more advanced tech stack (evidenced by less downtime); and, perhaps most importantly (but unquantifiable), has a culture that seemingly is an order of magnitude times more forward-leaning." Therefore, Koria finds it surprising that Nordnet has been trading at a 10 percent discount to Avanza on a forward price-to-earnings multiple despite enjoying a nearly 10 percent higher return on equity.
A main reason why Nordnet is valued higher than Avanza is that the Dinkelspiel-controlled online bank has operations in the Nordic region, while Avanza is only present in Sweden.
Avanza's Sweden-only focus has advantages—deeper market penetration, simpler operations, and concentrated brand investment. But it also creates strategic constraints. Sweden represents a maturing market where both players already have substantial share. Nordnet's presence in Norway, Denmark, and Finland provides growth runways that Sweden-focused Avanza cannot access.
Pareto Securities initiates coverage of the online brokers Avanza and Nordnet with recommendations of buy and keep, respectively. The preference for Avanza is due to its exposure to Sweden alone, where it is also the market leader. This is expected to benefit the company, as Pareto believes that Swedish households will have relatively stronger growth in disposable income in the coming years. "Avanza also benefits from the net inflow of savings and is less dependent on net interest income compared to Nordnet."
Analyst opinions divide on which competitive position is superior. The debate essentially concerns whether geographic diversification or market leadership creates more value. Nordnet's 2025 announcement of German expansion adds a new dimension—if successful, Nordnet's total addressable market will dwarf anything a Sweden-only competitor could access.
Beyond the Avanza rivalry, new competitive threats are emerging:
Online broker Interactive Brokers is now introducing the investment savings account (ISK) in Sweden, thereby increasing competition with local players such as Avanza and Nordnet. While Interactive Brokers has previously operated in Sweden, this marks the first time the ISK account is being offered to Swedish investors.
Interactive Brokers' entry with ISK accounts represents the first serious international challenge to the Nordic digital brokerage duopoly. IBKR's advantages include lower costs for international trading, access to 160+ global markets, and sophisticated trading tools. However, the company lacks local brand recognition, Swedish-language customer service, and the tax-advantaged product expertise that domestic players have developed over decades.
The traditional banks—Nordea, SEB, Handelsbanken, Swedbank—remain formidable on paper, with their established customer relationships and integrated service offerings. In practice, they have proven unable or unwilling to match digital-native pricing and user experience. Their high cost structures, optimized for branch-based service models, make aggressive digital competition economically challenging.
X. Strategic Analysis: Competitive Moats and Key Risks
Porter's Five Forces Assessment
Threat of New Entrants: MODERATE
Regulatory barriers create substantial protection. Nordnet received its banking license in 2002. Obtaining banking licenses across four Nordic countries requires significant regulatory expertise and capital. The technology investment required to replicate Nordnet's platform runs into hundreds of millions of kronor. However, the Interactive Brokers ISK launch demonstrates that well-capitalized international players can enter if sufficiently motivated.
Bargaining Power of Suppliers: LOW
Nordnet's primary inputs are technology infrastructure, market data feeds, and clearing/settlement services. All face competitive supply markets with multiple providers. The company's scale provides negotiating leverage, and vertical integration (such as bringing fund management in-house with Nordnet Fonder) reduces supplier dependency.
Bargaining Power of Buyers: MODERATE
Individual retail customers have minimal bargaining power—no single customer represents meaningful revenue. However, collective behavior matters enormously. Low switching costs mean customers can move to competitors easily. Nordnet addresses this through product innovation, brand loyalty, and tax-advantaged account structures that create friction for transfers.
Threat of Substitutes: MODERATE
Traditional banks still hold the majority of Nordic savings—Nordnet's market share growth represents substitution from incumbent banking relationships. Robo-advisors, fintech apps, and passive investment vehicles all represent alternative approaches to wealth building. Tax-advantaged account structures (ISK in Sweden, equivalent products elsewhere) create lock-in that limits substitution threats.
Competitive Rivalry: HIGH
The Nordnet-Avanza rivalry is intense, with both companies competing on pricing, product features, and customer experience. Traditional banks, while less agile, still command substantial market share and could respond more aggressively. International entrants like Interactive Brokers add competitive pressure, particularly for sophisticated investors.
Hamilton Helmer's Seven Powers Analysis
Scale Economies: PRESENT
Nordnet's platform costs are largely fixed relative to customer volume. Serving 2 million customers requires similar infrastructure to serving 3 million, creating per-customer cost advantages as scale increases.
Network Effects: MODERATE
Shareville creates direct network effects—the social investment platform becomes more valuable as more users share portfolios and insights. However, these effects are weaker than pure social networks because core brokerage functionality doesn't require other users.
Counter-Positioning: PRESENT
Traditional banks face a genuine dilemma: matching Nordnet's pricing would cannibalize existing fee income, while building comparable digital platforms requires cultural transformation and significant investment. This counter-positioning explains why bank responses have been muted despite decades of market share loss.
Switching Costs: MODERATE
Tax-advantaged accounts, accumulated transaction history, and platform familiarity create meaningful switching costs. However, competitors can facilitate account transfers, and customers increasingly hold accounts at multiple brokers.
Branding: PRESENT
Nearly three decades of operation have built Nordnet into a recognized Nordic brand synonymous with accessible, low-cost investing. "The most important achievement was that Nordnet grew to become one of the strongest brands in the Nordic countries in savings and investments."
Cornered Resource: LIMITED
Nordnet has no obvious cornered resource—no unique technology, exclusive data, or protected intellectual property that competitors cannot replicate with sufficient investment.
Process Power: DEVELOPING
The company's ability to enter new markets and product categories with systematic playbooks suggests developing process power. The German expansion will test whether these processes translate beyond Nordic markets.
XI. Investment Considerations: Key Metrics and Risk Factors
Critical KPIs for Ongoing Monitoring
Three metrics capture Nordnet's operational health more effectively than any others:
1. Net Savings / Savings Capital Ratio
Net savings measures new money flowing into the platform, while savings capital captures total assets under administration. The ratio reveals whether Nordnet is gaining or losing wallet share. Net savings amounted to SEK 72.9 (34.7) billion—more than doubling year-over-year signals strong competitive position. This metric captures both customer acquisition success and deepening relationships with existing customers.
2. Income/Savings Capital (in basis points)
The company aims to maintain income in relation to savings capital at approximately 45 basis points. The company's revenue margin remained robust at approximately 45 basis points of savings capital. This "take rate" reveals revenue efficiency—how effectively Nordnet monetizes the assets it administers. Declining take rates could signal pricing pressure, adverse product mix shifts, or competitive threats.
3. Adjusted Operating Expenses vs. Target Growth
Annual increase of adjusted operating expenses by about 8 percent. Operating leverage is Nordnet's superpower. If expense growth exceeds targets while revenue growth disappoints, the operating leverage thesis breaks down. Tracking actual expense growth against the stated 8% target reveals whether management maintains cost discipline.
Bull Case Considerations
The optimistic scenario rests on several factors:
German expansion succeeds, adding a market more than twice the size of combined Nordic markets to Nordnet's addressable opportunity. The German savings market is the largest in Europe and is more than twice the size of the Nordic savings markets combined.
Operating leverage continues compounding, with revenue growing at 10-15% while expenses grow at 8%, driving profit growth that exceeds revenue growth for years to come.
Pan-Nordic scale creates durable competitive advantages that Sweden-only competitors cannot match, while Nordic savings culture provides secular tailwinds as more households embrace self-directed investing.
Bear Case Considerations
Risks that could impair the investment thesis include:
Interest Rate Sensitivity: The company experienced a decline in net interest income due to lower interest rate levels. Sustained low rates would pressure a significant revenue stream.
German Execution Risk: Market Entry Risks: The planned entry into the German market in 2026 involves uncertainties and potential competitive pressures. International expansion has destroyed value for many financial services companies; Nordnet previously exited Germany after an earlier attempt.
Competition Intensification: Interactive Brokers' ISK launch signals that international players are increasingly willing to challenge Nordic incumbents. Sustained pricing pressure could compress margins.
Regulatory Changes: Financial services regulation evolves continuously. Changes to tax-advantaged account rules, payment for order flow regulations, or data protection requirements could disrupt business models.
Notable Historical Pattern: Previous German Exit
Nordnet's 2025 Germany announcement is actually a return engagement. Acting pioneers once again, we launched the first Nordic mobile app to offer the possibility to trade in shares and funds in 2010. We made the strategic decision to be a bank for Nordic savers, and therefore sold our businesses in Germany and Luxembourg.
The previous German exit raises important questions about what has changed. Management argues that platform improvements since the private equity transformation, combined with Germany's accelerating shift toward digital finance, create more favorable conditions than a decade ago. Skeptics might note that international expansion often proves more difficult than domestic success suggests.
XII. Conclusion: The Nordic Model Goes to Europe
Nordnet's nearly three-decade journey offers multiple lessons for students of business strategy and financial services disruption.
First-mover advantage in digital disruption can create durable competitive positions—but only when combined with sustained execution. Nordnet's 1996 founding provided time to build capabilities, survive the dot-com bust, and establish brand recognition before mature competition emerged. Companies entering the space today face established incumbents with billions in savings capital and millions of customer relationships.
Private equity ownership, often criticized for short-term extraction, can accelerate value creation when aligned with management on long-term platform building. As a result of significant platform investments, enhanced user experiences and product innovation, Nordnet considerably increased its customer activity and engagement, expanded its share of the Nordic market and accelerated its growth trajectory. In addition, Nordnet advanced its sustainability agenda. Nordnet also invested in a strengthened organisation, with its experienced management team focused on scaling the platform and delivering strong profitable growth.
Geographic expansion creates optionality unavailable to single-market operators. Nordnet's pan-Nordic presence provides both current growth runways and a tested playbook for the German opportunity. Avanza, despite comparable Swedish market share, cannot access these opportunities without accepting execution risks that Nordnet has already navigated.
Shares, funds and pension have become easy to access, cost-effective and simple. Nordnet has been a driving force in this change, and we look forward to continuing to improve our customer's financial future with saver-friendly products and services.
The democratization mission that animated Nordnet's founding remains strategically relevant. As pension systems globally shift responsibility to individuals, platforms that empower ordinary savers with professional-grade tools address genuine needs. Germany—with its historically bank-dependent savings culture and accelerating digitalization—represents exactly the kind of market where Nordnet's value proposition resonates.
Whether Nordnet successfully expands beyond the Nordics remains to be seen. What seems clear is that the company's quarter-century of transformation—from dot-com experiment to pan-Nordic platform to potential European player—represents a remarkable adaptation to changing conditions. The next chapter opens in late 2026, when German savers will have their first opportunity to experience what Nordic investors have known for nearly thirty years: that accessible, low-cost investing need not remain the province of professionals.
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