There’s no hiding the fact that investment growth in the Nordics has noticeably slowed from the speed we have came become accustomed to in the last 18 months. Yet, despite the pace, it is still growing, which is more than can be said of the U.S, meaning that the gap in investment levels, although still remaining huge, does continue to narrow for now.
*Source: CB Insights
Despite an uptick in the number of rounds in Q1 2017 from Q4 2016, the U.S is significantly behind the levels of investment it saw in 2015, whereas the Nordics has continued to push on from 2015, despite the slow down recently.
It can be said of course, that as a less mature market the Nordics can grow significantly faster, yet due to the U.S’s size and multiple ecosystems springing up across the country, I would argue that this point is moot. In fact, it’s hard to believe that U.S investment levels are flatlining/or even declining when you consider the number of cities that are continuing to mature in the States in terms of the number of startups and investments taking place.
So, if we take the above chart at face value, there are some interesting data-points to compare to the Nordics’ rate of investments.
First, a comment on how much this gap has reduced in the last two years. In Q2 2015, there was a difference of 1,402 investments, whereas in the quarter just gone, this was done to “just” 925. Of course, these numbers are still so far apart they are barely comparable. However, this level of progress is actually pretty impressive. From a x22 to *only* x6 more investments in just under two years.
Other interesting points:
- The Nordic’s record (ever) quarter coincided with the U.S’s worse quarter in recent years.
- Therefore the gap was as small as x4.86 in Q4 2016.
- The U.S has declined 24.8% from Q2 2015 – Q1 2017, while the Nordics has increased 167% in the same time period.
- The U.S have never reached the peaks of their record quarter again, something that could serve as an ominous warning to the Nordics in 2017.
It’s also worth pointing out that this isn’t necessarily a solely positive development, as it doesn’t really matter if a lot of investments are happening, if they are made by or made into poor quality actors.
Even still, it’s a useful benchmark for seeing just how far the investment ecosystem in the region has developed over the last couple of years, as well as realising that despite the general consensus, what happens in the United States in terms of investments and exits doesn’t necessarily have a knock-on effect on what’s happening in the Nordics, at least in the immediate term.