The 2016 Nordic Funding Analysis

In 2015, investment into Nordic startups broke the $1 billion mark in a calendar year for the first time with a total of $1.82 billion raised. Unsurprisingly, growth in amount of capital slowed in 2016, despite Spotify’s $1 billion debt financing. Still, 2016 saw more investment records tumbling and this time it was the $2 billion mark that was breached, with a total of $2.718 billion raised.


This was over three times the total amount invested in the region just two years previously, and was a 49.34% increase in capital from 2015. If we remove Spotify from the equation then 2015 and 2016 look more like $1.3 billion and $1.7 billion respectively, which still represents a 30% increase year on year, demonstrating that the amount of capital being deployed in the region is still rising.

Ignoring Spotify’s investment (from March) the capital raised was pretty evenly spread out amongst the quarters, with a peak coming in Q3 despite the infamous Nordic summer break, although this was predominantly due to Unity’s monster $181 million Series C.

Although growth in capital was slower in 2016 than it was in 2015, the number of investments actually grew even faster in 2016 than they did in the year prior, with a rather staggering 708 investments made into Nordic startups, a 108.84% increase from 2015.

This was slightly unexpected, as we predicted a certain level of stability in 2016 and expected something similar to the growth rate of 87.29% experienced in 2016, which would have led to just north of 600 investments last year. This was comfortably breached though, with 708 more than doubling the amount of investments made in 2015.


More telling, is that when you break it down quarterly, the number of investments not only rose in 2016, they are still rising, with Q4 recording nearly 70 more investments than Q1, with no slowdown seemingly on the horizon yet, and positioning 2017 to be another record year if the trend continues.


Encouragingly, the second half of the year saw a higher number of investments above $5 and $10 million than H1, meaning that our worries surrounding a potential bottleneck in 2017 were allayed a little.

Another trend that’s particularly noticeable in the round sizes is the lower amount of investments happening at $500,000-$1 million compared to <$500,000 and $1-3 million, indicating that this is likely a more awkward size of round to raise in the region, with investors seemingly more happy to take smaller riskier bets or larger ‘safer’ bets at a pre-seed and seed stage.

There’s a few ways of looking at this, this could be an investment range that could be considered under-served by investors, or a range that is best avoided by founders in the region, with an amount of $1-3 million seemingly more attainable from the investors funding the region despite being larger.



After FinTech took the top spot for investment in the Nordics for the first time in 2015, it had to settle for being the 2nd most favoured investment opportunity in 2016 as Enterprise SaaS, a vertical so synonymous with the Nordics returned to the summit. The first appearance of Energy and IoT in the top 10 most invested in verticals are particularly interesting, with Stockholm being a noteworthy hub of activity for both.

Real estate and accomodation came out with the least number of investments in 2016. This could be due to investors not finding enough interesting companies to fund in this space, but when I dig deeper, the main issue appears to a severe lack of Nordic startups looking at this sector.

This really surprises me for two reasons:

1) It’s really hard to find a place to live in the Nordics, particularly in Copenhagen and Stockholm, two of its biggest cities, so you would think that some entrepreneurs would be motivated and experienced in a problem that exists on their own doorstep.

2) Housing is one of the World’s biggest issues, and typically Nordic startups are good at looking at the wider picture, especially when it comes to the bigger societal problems that need solving.


Talking of Stockholm, the region’s most populous city played an integral part in Sweden once again securing significantly more capital and investments than any of its neighbours. This gap is especially pronounced when we look at the number of investments, with Sweden’s startups seeing more than three times the number that it’s nearest neighbour Denmark recorded.

This was the first time that Denmark has recorded more investments in a calendar year than Finland and confirms that it, and particularly Copenhagen should now be considered one of the region’s main hubs alongside Helsinki and Stockholm.

It might not be long until we add Oslo to this list too, with a growth of 160% year on year for the number of investments, with 78 in 2016 compared to just 30 in 2015.


Obviously, in terms of amount raised, Sweden greatly benefits from Spotify’s investment, however, even removing this, they come out on top comfortably. However their growth in capital per year with this removed is actually the slowest in the region barring Iceland. Norway saw the biggest increase in capital with $196.3 million a 130% increase from 2015’s $85.4 million, as they continue to live up to their billing as the fastest growing ecosystem for investment in the region.


(Stay tuned later this week, where we will delve deeper into each country’s individual funding performance in 2016 in separate posts)


In the conclusion of our 2015 funding analysis I wrote: “In all honesty, despite what the data says, it will be incredibly hard for the Nordics to sustain the growth rate of the amount of venture capital that is currently flooding into the region” and ultimately this proved to be the case, as despite $2.7 billion being an incredible total (over $100,000 raised per individual in the region!) this still represents a slowing down in the rate of capital coming in.

However, as I also wrote when looking ahead to 2016: “However, much more possible, and important, is that the number of investments keep increasing year on year. If we applied the same rate that we saw the number of investments grow at last year for this year then we would be looking at 600+ investments in Nordic startups in 2016. If we are take a long-term approach to the ecosystem, which of course we should, then this number is much more vital to the future success of the region.”

And of course, with 708 investments, we comfortably surpassed my prediction (goal) of 600+ that would represent further growth, and this is still increasing, with Q4  a record quarter for the number of investments by quite some distance.

So, what do I foresee in 2017?

  • With a likely Spotify IPO on the horizon, there may not be a monster round from the Swedish giant to prop up the investment totals in 2017, meaning that the year may see a fall in total venture capital raised compared to the previous three. In saying that, even removing Spotify from the equation gives us totals of $1.3 billion in 2015 and $1.7 billion in 2016, meaning I’d still expect the year’s total to sit up and around the $2 billion mark.
  • More than 1,000 investments in the Nordics in 2017. As outlandish as this seems, if the growth rate was maintained from 2016, then we would be looking at just shy of 1,500. I don’t see this happening, however I am more than confident that the 1,000 mark will be breached for the first time in a calendar year.
  • A lot of these companies that are raising pre-seed investments are simply not going to be good enough, meaning we will witness a lot of Nordic startups dying a death this year due to their inability to raise further money. This may lead to an outcry that there is not enough money or investors in the region, but this is simply not the case. The issue is that due to the sheer number of companies that have received initial investment, it’s quite natural that a large percentage of these won’t make it.

That’s a rather sombre note to end things on, especially when we consider 2016 was another record-breaking year for investment in the region, however, it serves us well to look beyond the numbers sometimes.

Even still, it can’t be denied that 708 investments and $2.7 billion invested is an incredible result for the region and one that ends any debate about the Nordics being one of Europe’s main investment hubs.

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