Next up in our Q2 country specific analyses is Norway. Their ecosystem has been the most consistent over the last 18 months, with no more than 6 investments being the difference between quarters during this time period. This was the case again in Q2, as 21 investments totalling $75.2 million was an increase on Q1 2017, but only just.
A quick note on methodology before we begin:
* We only record private minority (equity and loan) investments into Norwegian tech companies
As we mentioned in the introduction, the Norwegian ecosystem is certainly consistent in terms of the number of investments they attract. Therefore it is fair to say that over the last 18 months investment into Norway has been steady rather than growing. Considering the fairly low baseline they were coming from and the increase of initiatives to encourage early-stage investment, I have to admit to being surprised by the lack of growth we are seeing here. In fact, H1 2017 is actually two investments behind H1 2016, providing us with the very real possibility of 2017 even being a down year for the number of investments, something that we wouldn’t have even considered at the beginning of this year.
The amount of capital in Q2 also witnessed an increase, with more than double the capital invested than the previous quarter, this puts H1 2017 slightly ahead of H1 2016 for this at least.
The strong performance in capital invested is easily explained by the number of rounds above $10 million, there were 5 in fact, meaning that nearly 1 in 4 investments that happened in Norway in Q2 were in this size range, demonstrating that the Norwegian ecosystem is continuing to mature, especially considering the fact that there were also two in this range in Q1.
Only four verticals recorded more than a solitary investment, as the diversity in the startups being funded in Norway continues. The three most popular verticals across the region in Q2 were also the three most popular in Norway.
Here are the five investments that came in at $10 million+, interestingly, the top two only raised financing domestically demonstrating that local money is also available for those looking for larger amounts of financing.
Oslo attracted 66.66% of the investments, a lower percentage than both Q1 2017 and 2016 as a whole. The west of Norway performed strongly with Stavanger and Bergen both recording a couple each, meaning if you put them together they represented nearly 1 in 5 investments.
Norway is still lacking in International investors participating in their funding rounds despite initiatives like Startup Extreme raising the profile of the country. Still, there is a slight increase from Q1 and ultimately, 5 companies managed to raise $10 million+ demonstrating that money is there for companies looking to scale regardless of where it comes from.
The Norwegian ecosystem is clearly maturing which is of course a good thing. However, there is certainly a mass that still needs to be reached, with more early-stage investments still needed to really push the ecosystem on. While we get excited by seeing these big funding rounds happening and the Norwegian ecosystem maturing, we shouldn’t get distracted by the fact that the investment ecosystem still needs plenty more of fuel on the fire, with 2017 only just beginning to smoulder.