Swedish Startup Space

Swedish Tech Companies Undisputed European Champions of VC, New Report Says

Written by on January 13, 2016

But fewer large investment rounds raises concern about a possible cooling down of the market.

Industrifonden has listed the most important countries in Europe when it comes to tech investment, and Sweden is now completely unchallenged at the top. British companies, which are in second place, raised barely half the amount. Germany and France didn’t even reach a quarter of the amount that was raised in Sweden per capita, according to Industrifondens research.

In totalt, investments in Sweden reached over $1 billion(9.4 billion SEK) last year and was divided between 175 different funding rounds. The most active investors last year, sorting by number of investments, were Creandum, Industrifonden, Northzone and Almi Invest.

The last couple of years, foreign investors has shown an increasing interest for Swedish companies, but the Swedish VC’s are still dominating the market. In the smaller seed funding rounds (below $1 million dollars), 4 out of 5 investment rounds had no foreign investors.

In the larger rounds however, there was almost always some international investors, but the large rounds are also where you see the first signs of a declining market.

That being said, 30 percent more companies raised capital in the last quarter of 2015 compared to Q3 2015, according to Industrifondens research. But the number of large capital rounds decreased by 65 percent. If you look at the five largest rounds of Q4 2015, they were significantly smaller than the largest rounds of the previous quarters of 2015.

One explanation can be that investors hesitate more as a result of increasing interest rates. The US Federal Reserve recently raised interest rates for the first time in almost ten years, and stock markets have become less stable throughout the world lately. Uncertain outlooks combined with raised interest rates usually leads to a decline in demand of more risky investments like startup investments.

 

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