Over the next week or so we are going to delve deeper into the investments in the most-popular verticals in the Nordics in order to understand how investment in each area has changed over the years, which countries are particularly strong, what size the majority of investments are happening at, and who are the most active investors.
First up, Health and Wellness.
In terms of both the number of investments and the amount invested, Health and Wellness was one of the most consistent verticals in the region last year. Q4 was a record quarter for the number of investments in the vertical, but at just 6 more than the slowest quarter, it was hardly an overly impressive one.
This demonstrates that while Health and Wellness remains an attractive area for investors looking at the Nordics, it’s not one that is on the rise in popularity currently.
No surprises to see Sweden top the charts for the most investments, as that will nearly always happen regardless of the vertical due to the sheer number of investments they attract compared to the other countries.
However, a more accurate way of seeing which countries are particularly strong in each vertical, is to look at what percentage Health and Wellness (in this case) investments make up of the total number of investments.
If we do this, then Finland actually comes out ahead of Sweden, which I would say is a much more accurate representation of where the biggest concentration of Health and Wellness startups are. Iceland comes out on top, but this is in part due to the significantly smaller number of investments they see in total.
In terms of capital, while Denmark recorded the third most investments, they saw the least capital invested, with Health and Wellness representing less than 0.01 of total capital invested in the country last year, demonstrating that there a number of pre-seed startups attracting capital in the sector, but a lack of any post-seed Health and Wellness startups currently.
There weren’t too many later stage investments in the vertical in 2016, but there has never been many across any of the years. While we normally attribute this to an immature vertical, this isn’t necessarily the case with Health and Wellness, as startups in the vertical just typically require less capital than other sectors to reach market dominance, meaning that there is simply less of a requirement for Health and Wellness startups to raise large amounts.
Even still, it’s fair to say that we are blessed with a large number of early-stage startups in the area right now, with other 40 investments happening below $3 million, meaning we should see an increase in Health and Wellness funding rounds above $3 million this year and next.
Investment into Nordic Health and Wellness startups breached the $100 million mark for the first time in 2016, however it still represented less than 5% of the total capital invested in the Nordics last year.
While this is significantly higher than 2015, it is still lower than 2014. However, 2014 was the only time that Spotify didn’t raise a monster round in recent years, resulting in 2016’s % figures for capital being heavily affected, making it closer to 2014’s figures than it appears on the surface.
2016 saw three times as many Health and Wellness investments as 2015, as it’s pace outstripped the general pace of total investments between the two years. This saw the vertical nearly return to 2014’s level of representing 1 in 10 investments in the region.
In terms of the most active investors in the vertical, there are a fair few who have made multiple investments in the last couple of years, most notably, ALMI Invest, Sunstone Capital, EQT Ventures, Industrifonden, Seed Capital, Lifeline Ventures and Inventure.
In conclusion, while 2016 saw increased interest and investment into Nordic Health and Wellness startups compared to 2015, it still fell short of 2014’s level in terms of the % of total investments it represented.
Health and Wellness remains an important vertical in the region, but it’s fair to say that it’s a consistently strong, rather than a rising or ‘hot’ sector right now.