The H1 2018 (Q1 and Q2) Swedish Funding Analysis

It was a unique position for Sweden to be in after our H1 2018 Nordic Funding Analysis, as we stated Sweden’s performance was the reason why the region didn’t do as well as expected rather than it being the reason why the region did amazing as we’ve become accustomed to doing so over the last few years.

Still, despite an incredibly slow Q1, there were signs in Q2 that it could be business as usual again soon.


Methodology and Disclaimers

  • The most important thing to mention, is that at the end of a quarter we spend time updating our database from investments that we either missed at the time or were subsequently uncovered post the original analysis. Therefore, some of the numbers, particularly on the number of investments per quarter differ in this analysis from previous ones you may have read previously.
  • We are largely able to achieve this increased accuracy due to the higher quality of available data sources that exist in the region these days, particular shout-outs deserve to go to Nordic9Nordic Tech List and Northstack.
  • Any differences that occur in our datasets are predominantly due to methodology, therefore it is important to outline ours:
  • We only record publicly disclosed, private minority (equity and loan) investments into Nordic tech companies. We do not include secondary investments, nor do we include accelerator investments (for entry into a programme)

The Number of Investments

Q1 2018 was the quietest quarter for investments in nearly three years, dating all the way back to 2015. However, with 101 investments announced in Q2 2018 it appears (hopefully) to be an anomaly rather than a trend.

In total this amounted to 178 investments in H1 2018, a significant 65 investments less than H1 2017 and only 4 more seen in H1 2016. As it stands, Sweden may be on course for a down year in terms of the number of investments, something that appeared unthinkable at the beginning of this year.


The Amount of Capital Invested ($M)

Despite the decrease in the number of investments, the amount of capital being deployed into Swedish companies did not suffer too dramatically. In fact, the $566 million ($219.8 million in Q1 and $346.2 million in Q2) was only $68.2 million less than H1 2017.

if investments continue in the same vein as Q2, then I’d still expect 2018 to see more capital invested than in 2017.


The Number of Investments per Round Size

So, where are the decrease in investments happening? The biggest offenders are investments in the $1-3 million and <$0.5 million ranges, suggesting that early-stage investment has dramatically slowed in H1 2018. This was perhaps inevitable, as after all, there are only so many startups a country of 10 million people can produce. However, this does feel a little too “early” to happen at this stage of the ecosystem’s development, therefore I’d suggest this is more of a slow/poor batch of new Swedish startups rather than a forewarning of anything more long term.

Interestingly, investments at $5-10 million and $10-20 million actually increased, supporting the former hypothesis and demonstrating that a good number of the companies that had raised <$5 million in the last 12-18 months moved through the funding pipeline and were strong enough to raise further capital. However, there was another slowdown in the really big rounds, with H1 2018 seeing 5 less rounds above $20 million than H1 2017 saw.


The Number of Investments per Vertical

Health and Wellness is the most backed vertical in Sweden right now, this certainly goes hand in hand in what I am seeing in the market as well, particularly at the early-stage. FinTech’s stronghold is threatened for now then, while other verticals we typically associate with Sweden such as retail, gaming and entertainment and media also performed strongly.


The Number of Investments per City

Stockholm accounted for 7 in 10 investments in Sweden in H1 2018.  This is one of the highest contributions to Sweden’s investments the capital city has ever made, surpassing the high of 67.5% seen in Q2 2017 and the 63.7% recorded in the whole of 2016.

Still, Gothenburg and Malmo have also seen double-figure investments and are now more than established as hubs in their own right.


The % of Funding Rounds with a minimum of 1 International Investor

Only 14% of funding rounds included at least one investor from outside of the region. This was the lowest recorded in the Nordics, but is more of an indication of the strength and variety of local investment options available rather than a lack of international interest.



I do believe that Q2 is more symptomatic of 2018’s ultimate prospects than Q1 was, meaning that there is still a good possibility that 2018 could be a decent one despite the exceptionally slow start in the first three months of the year. However, the prospect of a first down year for the number of investments for the first time in 5+ years is also certainly something that should be considered on the horizon.

What’s in no doubt though, that despite a relatively poor H1 for investments by their standards, put into the context of what’s happening across the region, there’s no doubting that Sweden remains the lighthouse, still recording more than 2x the number of investments than Norway, Denmark and Finland. Their decline in growth can largely be attributed to the heights they were coming from and therefore in a wider context should not be considered disastrous and despite an underwhelming H1 2018, Q2 gave us hope that the rate of investment is increasing once more.

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