The Q1 2017 Nordic Funding Analysis

As we’ve already covered, 2017 started as a bit of a damp squib compared to what we’ve became accustomed to in 2016, but a strong March meant the quarter recovered to levels that were higher than quarters in 2016, barring the record-breaking Q4.

Even still, this growth is pretty insignificant and does appear to be at the very least a stabilisation of the levels of investment we’ve seen. Technically it is a down-quarter, however right now Q4 2016 is looking more like an anomaly than a trend.

Perhaps the most accurate measurement for getting a sense of where we stand is to look at Q1 of 2016, as seasonal periods do play a part in when funding announcements take place. If we do this, then we see a growth of 14.74%, which is more of a natural progression than anything more meaningful, such as a big increase in either talent or capital.

What is more promising is the amount of capital that was invested, in fact, despite over 40 investments less, Q1 2017 actually saw more capital than Q14 2016. This was due to an increased number of larger, later rounds, which could be argued are more important right now to the Nordics’ progression as an ecosystem, rather than the pure number of rounds taking place.

The investments per country in Q1 were pretty much in line with what we’ve come to expect in recent times, with all countries posting investment numbers that are fairly familiar to us now. Although, the lack of investments in Iceland is becoming somewhat concerning, with just 2 investments announced in the last six months.

We will produce individual country analyses later this week where we delve into each countries individual funding statistics in more detail.

When we look at the number of investments per round size we can really see a big increase in rounds $5 million+, and even at $10 million+, with 12 investments happening at this size and beyond.

This is a true, and much needed development towards the Nordics continuing to develop as a startup hub. So much early-stage capital has been raised (and as you can see below, this hasn’t changed in 2017) but what’s important is that a large enough proportion of them are good enough to raise these later rounds. For now, Q1 is indicating that there are a fair number that are, what we need now is for this to continue throughout 2017.

The power 5 reigned supreme in Q1, with no surprises anywhere. The only patterns within the quarter perhaps worth highlighting are that the increased investment we saw in DeepTech in January didn’t really continue in February and March, whereas Food and Drink excelled in March but not before, but, really, these are marginal and not really that indicative of any major trend, more just points of interest.


Rather interestingly, despite an increasing proportion of larger-later rounds where typically the Nordics has had to look more to International investors to participate, Q1 only saw 16.2% of rounds include a non-Nordic investor compared to Q4’s 16.1%.

The decrease in International involvement has been a trend we’ve been tracking for a while now and it was largely due to an increase in more local early-stage investors, particularly in Sweden. However, what’s particularly interesting about Q1, is it appears that there is also less of a reliance on International capital for those later rounds.

This is in part due to funds like Industrifonden, Northzone, Creandum and EQT Ventures becoming even more active, with the resources to provide the most promising Nordic companies the capital they require to scale, without them having to look outside the region.

Although technically Q1 saw a dip in investments from Q4, and saw minimal growth from Q1 2016, I am actually very bullish about what we ultimately saw in Q1.

My biggest concern right now for the region is not the amount of capital that’s available, but the amount of talent. A Series A crunch is a real possibility due to the large influx of early-stage capital we’ve witnessed come into the region recently, except the crunch won’t be capital, it will be for the lack of companies good enough to raise an A round.

However, Q1 gives me hope that we may be able to allay these fears for a while, as it is clear that investors saw enough interesting companies to provide this level of capital to so far in 2017.

While I don’t expect the number of early-stage investments to dip, in fact Q2 will likely be much stronger than Q1 in terms of the number of investments, we will be keeping more of an eye on the type of investments that are happening, rather than the number of them, as 2017 looks set to be a crunch year (pun intended) for the Nordic investment scene.

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