An increase in early-stage investments is helping Norway become the fastest-growing ecosystem in the Nordics

Editor: This is a sponsored article, which means it’s independently written by our editorial team but financially supported by another organisation, in this case, Innovation Norway.


2016 was another record-breaking year for investment in the Nordics, as all of the major ecosystems continued to attract increased interest and capital. However, one country’s funding performance particularly stood out. While Sweden remained the dominant force in the region, less expected, and therefore perhaps even more impressive, was the staggering rise of investment into the Norwegian ecosystem.

Last year, 78 private investments were made totalling $196.3 million, representing a 160% increase in the number of investments and a 130% increase in the amount of capital from 2015.

This rapid growth is being driven by an increase in private pre-seed and seed investments. $6.1 million across 28 investments was invested below $500,000 in 2016, and a further 9 between $500,000 – $1 million as Norway’s blossoming tech scene is now being provided the fuel it requires to grow.

These pre-seed and seed investments below $1 million accounted for 48.57% of the private investments seen in Norway in 2016, setting up a strong pipeline for the Norwegian ecosystem’s future.

This is particularly impressive when you consider that a total of 9 investments at all sizes were made in the entirety of 2014, with just 4 of these investments below $1 million.

In 2015, the picture improved somewhat, however, 2016 has seen dramatic growth in the pre-seed and seed stage investments for Norway, with an increase of 150% in investments below $500,000 and of 78.95% below $1 million from 2015.

The importance of the growth of these early-stage investments can not be underestimated.

Most notably, they’ve propelled Norway to compete with Sweden as the fastest-growing ecosystem in the Nordics, with a 160% growth year-on-year, compared to Sweden’s current rate of 171%.

So, if the early-stage investments are responsible for this growth, then what’s responsible for those? The answer lies in a multitude of initiatives that have resulted in this dramatic increase over the last 18 months.

Angel Challenge is one such initiative. Not only is it providing capital to early-stage companies, perhaps more importantly, it’s also educating angel investors, helping a new generation of individuals with private investments invest intelligently and adding value to the startups.

Co-founder Knut Wien explained:

“Becoming a strong and knowledgeable investor takes time, just as it takes time to become a successful serial entrepreneur. Understanding this, I believe in the importance of having a low risk introduction services as Angel Challenge to introduce new investors to startup investing. Then it is likely that some of these 134 investors might become active and strong investors in a few years.”

Norway is now benefiting from the 100+ individuals who’ve so far been educated and invested since the programme began. This in turn has led to 44MNOK being invested into 15 companies as a consequence of Angel Challenge activities in 2016. It’s good to remember that as vital it is to have skilled entrepreneurs in an ecosystem, it’s equally important to have skilled investors.

Elsewhere, StartupLab, one of the first movers in helping early-stage Norwegian companies is about to pass an impressive milestone of its own, as currently they’ve been home to 199 companies so far. The co-working space and incubator is playing a pivotal role in helping these companies take their first crucial steps, not least through funding them themselves through their Founders Fund. They are already on Fund 2, and are up to 11 investments after making 22 investments in their first fund with 100MNOK under management. Importantly, they often write the first cheque, providing startups with the impetus and means to pursue further investment.

Partner Alexander Woxen elaborated further on their own ambitions:

Our focus is to make equity/working capital more available at the very early stage to inspire people with options – to take risks and calculated bets. Hence increasing the dealflow impact to the evolving ecosystem. What we now see is that current companies outperform alumnus. We believe this indicates better market assumptions such as access to talent, funding and startup friendly corporates.”

It’s not just Angel Challenge and StartupLab propping up the ecosystem, there’s also BTO, supporting and investing in companies around Bergen, NTNU Accel, a new university based business accelerator for promising startups in Central Norway and Kjeller Innovasjon Incubator, backing energy and sustainability startups, to namecheck but a few.

Notably, Innovation Norway have a hand in all of these, predominantly by providing capital themselves. StartupLab informed me that Innovation Norway has provided over 20MNOK to companies currently sitting in their space, while Knut Wien went as far as saying that Angel Challenge probably wouldn’t exist without their assistance, markedly mentioning that the guidance that’s been provided to them has been just as crucial as the capital.

It is the capital however, that has been the real trigger for the increase in these private investments, as Innovation Norway has been providing matching capital from private investors in loans, seed funds and pre-seed capital. This is a move designed to encourage private investors by sharing the risk with them. The impact is striking, in 2016, 61.5 MNOK in pre-seed capital committed by Innovation Norway triggered 171.5 MNOK in private investments. What’s most encouraging is that this is tangible evidence of impact from Governmental policies rather than simple promises.

Having the ability to fund ideas and new companies is crucial to any ecosystem’s development. By having capital available at this early-stage, you are not just contributing to more companies having a better chance of succeeding, you are contributing to more companies starting, as they know that resources are available to support them in their journey.

This is crucial to the bigger picture, as it provides Norway with a strong pipeline of companies who can go on to raise Series A’s and beyond and ultimately exit, the key for any successful ecosystem to continue to grow. The critical mass needed for this to be achieved can only happen if there are enough companies who are able to keep moving forward to the next milestone in funding or development, and with x% of companies naturally falling away at each stage, there needs to be plenty of companies in the pipeline in the first place, which can be driven by this early-stage funding.

Importantly, people in the right places are also starting to notice the potential in Norway’s tech sector and more importantly recognise the challenges that need to be overcome to fulfil this. In a recent interview on The Nordic Web, Crown Prince Haakon, an important ambassador for the Norwegian and Nordic tech scene remarked:

“I definitely think that we are situated now in such a way that we will see quite substantial outcomes in the years to come. But of course what we need now is for more of those companies to reach real scale, so that’s what we are all hoping for.”

The future is bright for Norway, and this year could see some of these outcomes realised.

Most notably, we can expect the 100+ investment mark to be comfortably breached in 2017, something particular remarkable when you consider that Finland, a much more mature ecosystem has yet to achieve that in a calendar year. In fact, Norway has a genuine chance of attracting as many investments as their Finnish neighbours this year if you follow the growth rates from 2015 to 2016, a milestone that would truly put Norway on the International radar as a blossoming investment hub.

While we expect the growth to slow down a little, of the 100+ investments we project, we fully expect pre-seed and seed investments to represent 50+ of those, and with the aforementioned initiatives gaining further momentum, it’s possible that we could see as many as 75+, with total investments sitting around 150.

While Sweden will still be numero uno in 2017, based on the above, we fully expect Norway to take the crown for the ecosystem growing fastest for investments by year end.

Neil S W Murray founded The Nordic Web in 2014 in order to provide the Nordics with the quality coverage it deserves. As well as being Founding Editor of The Nordic Web, Neil is also an active community builder in the region, participating in a number of initiatives, and has previously worked for