Swedish Startup Space

2015 sees record breaking venture capital rain on Swedish tech companies

Written by on October 8, 2015

During the years first nine months of the year, investments in the tech sector amount to almost $960 million according to Breakit’s research. However, signs are now showing that the investment rate is slowing down.

Breakit has compiled publically made investments in Swedish tech companies, during the third quarter of this year. In total, there are investments corresponding to $250 million. Two tech companies within the financial sector are top of the list when it comes to largest investors past quarter.

One is the payment service Izettle, and insurance broker Bima is the second one. They have raised $68 million and $38 million respectively. The so called Fintech-sector seems to be the hottest turf on the investment market as many venture capitalists seek out companies in that specific segment.

Over the first nine months of the year, it is really musical service Spotify that stands out from the crowd. Spotify raised a massive total of $526 million in an investment round that closed in June.

Thanks to this raising of funds, the Swedish tech companies will joint break records in 2015. Already during the third quarter, investors have fueled $938 million, an increase with 80 percent compared to last year’s total.

There are, however, signs that point to the Swedish venture capital market cooling off. During September, there were investments made of only $10.5 million, according to Breakit’s research. It can be compared to July where $31 million was invested and in August where a total of $207 million flowed into Swedish tech companies.

Fluctuations on the Stockholm stock exchange have been steep for quite a while and create instability, even among investors working outside of the stock exchange.

“We want to secure long term financing with regard to what the world around us looks like. The world economy is not super stable and it will have its consequences regards to available capital, for the more adventurous investments. If you want to carry on with an aggressive growth strategy, as we do, you should have stable funding”, Izettles CEO and co-founder Jacob de Geer said to Breakit after the company closed it’s investment round.

Several investors Breakit have spoken to testify to the fact that tech companies are not really living up to expectations and have a tougher time gaining capital today compared to a year ago. As an example, exercise app Vint failed to raise money last summer and according to Breakit’s sources, Virtusize have also been forced to make a dent in growth as investors put a foot on the brake.

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