Despite now being able to compete with the best of them when it comes to attracting investment, the Nordics are still relatively behind other more established hubs in Europe when it comes to exits. This is not just in terms of the number of exits, but also in the percentage of exits that are VC-backed. In 2015, only 25% of tech exits in the Nordics were VC-backed, compared to a European average of 30.30%.
There are a number of reasons as to why these percentages are so low.
Firstly, a lot of these exits were from older, more traditional tech companies that were spun out of corporates, as well as being from industries such as cable and telecom and not ‘digital tech’.
Secondly, investment into Nordic tech companies hasn’t always been as prevalent as it is today, meaning that a lot of companies have simply bootstrapped their way to a successful outcome.
However, the first five months of 2016 are indicating that we are now beginning to see the impact of the increased investment over the last two years, with VC-backed tech exits in the Nordics currently up at 44.4%, meaning nearly 1 in 2 tech exits in the Nordics are VC-backed.
A rise in VC-backed exits is to be expected as there are more VC-backed tech companies than there once was meaning it is simply statistically more probable. However, the extent of the rise is significant and therefore notable, as 2016 looks to be a good year for VCs in the Nordics.
And despite the low percentage of VC-backed exits in 25%, the Nordics still delivered the goods, as Avito and King were the only two VC-backed $1 billion+ exits in Europe last year, with both having their roots in the region. In fact, in Sitecore (and technically Opera Software), 2016 has also delivered $1 billion+ VC-backed exits already.
These impressive exits combined with the fact that VC-backed exits have significantly increased contribute to the Nordics becoming even more attractive to invest in and more importantly, demonstrates that it is not just a place with potential but one which returns.