The Danish 2016 Funding Analysis

If 2015 was a breakthrough year for Denmark in terms of being taken seriously as an investment hub that can compete with Stockholm and Helsinki, then 2016 was the year that it established itself, as Denmark recorded more investments and amount of capital invested than Finland for the first time, as in 2016, Denmark saw 123 investments totalling $446.13 million.

This exceeded our expectations that we outlined at the start of 2016, as while we stated that we expected investments to (just) break the 100+ mark for the first time, we warned that the total amount invested could well fall due to Trustpilot’s and Siteimprove’s huge funding rounds in 2015. However, 2016 included its own outlier with Unity’s $181 million Series C meaning that this wasn’t the case.

Not only did the rate of investments grow faster than we expected in 2016, it hasn’t showed any sign of slowing yet, with Q4 marking a record quarter for investments in Denmark by some distance.

However, it’s not all fun and games. The lack of transparency around the size of Danish funding rounds is something that has frustrated us for some time now, however, the issue actually got worse in 2016 as the number of investments increased. Nearly 50% of the investments had their amounts undisclosed. This is a number that is vastly disproportional to the other Nordic countries, and something that is particularly prevalent in Denmark.

So why is this? The cynic in me tells me that it is related to the terms that are offered by local angels and investors, however, more likely is just a lack of solid reporting and miscommunication. We typically use the amounts that are used in press releases/media, however due to this ongoing issue in Denmark, we will be proactively using the Danish Business Register going forward to fill in these undisclosed rounds after the fact, as this information is more often than not available after a certain amount of time, however Danish press often neglects to refer to any of this information at any point.

Other than undisclosed rounds, investments between $1-3 million were the most popular, demonstrating that Danish startups are beginning to experience some maturity and a decent deal-flow with promising seed stage startups that had previously had pre-seed or angel investments.

Copenhagen has been pushing itself to be taken seriously as a FinTech for a couple of years now, and it seems that the fruits of this work are beginning to show, as this was easily the most invested in area in Denmark last year. Enterprise SaaS, as always, features strongly, while interestingly, 1 in 3 Nordic Hardware investments were made in Denmark.

As is the case in all of the Nordic countries, the capital city is the main hub of activity, with 79.67% of 2016’s Danish investments occurring in Copenhagen. Elsewhere, Aarhus recorded a rather impressive 17 investments, as the community continues to work together through various initiatives to strengthen itself. Odense also recorded 3 investments, all in Robotics.

Like we said at the beginning, our expectations that 2016 could potentially see less capital than 2015 invested were proved wrong due to Unity. Remove them from the picture and it was actually still a strong year for capital invested into Denmark, especially when you consider that all of the undisclosed amounts have not been included in these totals.

The growth rate for investments year on year jumped from 71% to 89%. And with Q4 also the strongest quarter of 2016 for the Danes, we currently project for this to be maintained in 2017.

Taking this into account, we can expect Danish startups to break the 200+ mark in 2017, just one year after they broke the 100+ mark for the first one. Although it proved to be wrong this year, we also have the same expectation that even with 200+ investments, the total amount of capital invested will likely not grow much, if at all in 2017. Especially if those pesky undisclosed rounds account for 100 of them….

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 Tech.eu.