After releasing our Nordic wide Q3 funding analysis yesterday, today we turn our attention to our first country specific analysis, with Denmark first up under the microscope.
Q3 2016 brought us 34 Danish investments totalling $250.9 million
The last quarter was the most prolific one Denmark has ever seen in terms of the number of investments, putting them easily on course to break the 100+ mark for the first time in a calendar year, clearly demonstrating an ecosystem that is becoming increasingly popular to investors.
In terms of the Nordics as a whole, its worth noting that Denmark saw significantly more investments than Finland (21), however, Sweden saw nearly three times as many (92).
This is also the highest amount of capital Denmark has ever raised in one quarter, however, this is largely due to Unity’s $181 million monster round. Even still, disregarding this, $70 million would still be more than Finland, Norway and Iceland saw going to their companies.
The $250 million would be even higher, if Danish companies actually disclosed more of their rounds. Even though undisclosed rounds are typically at the smaller end of the scale, providing them a nominal value of $250,000 each, this would be an additional $4 million we would be reporting.
Undisclosed deals is a fairly recent, increase, and frankly worrying trend in Denmark. The cynic in me can’t help but worry that this is linked to investment terms that pre-seed companies are getting. I hope not, but one thing’s for sure, we don’t see this level of undisclosed deals in any of the other Nordic countries.
When comparing this quarter to Q2 and Q3 of last year, it’s clear to see that more and more later stage investment are happening, a symptom of an ever-evolving ecosystem, as well as a good sign that capital is available for Danish companies looking to scale-up.
Not only were the top four investments the biggest in Denmark, they were also the four biggest in the Nordics, a further demonstration of Denmark’s increasing ability as an investment hub.
There’s been a lot of noise coming from actors in the Copenhagen scene regarding it being a FinTech hub for a couple of years, yet it has taken until now to see any hard evidence of this. FinTech comfortably led the way for investments in Q3, attracting three times as many as the nearest other verticals, which were Gaming, Retail and Travel and Transport.
No surprise to see Copenhagen record the vast majority of the investments, with Denmark’s second biggest city, in second place.
Danish companies are still relying heavily on Nordic-based investors, with 82.4% of funding rounds only containing investors from within the region, demonstrating some room for Denmark to attract more International investors.
In conclusion, in terms of funding, Q3 was a good one for Denmark, even when removing Unity from the equation. The positives certainly outweigh the negatives, however, the amount of undisclosed deals and the fairly low percentage of International investors offer clear areas for improvement to ensure a healthier and stronger investment ecosystem.
However, the number of investments and capital is at a record high, later-stage investments are happening for scale-ups and even Danish FinTech is beginning to live up to its hype, meaning it would be churlish to acknowledge Q3 as anything else but an exceptionally strong one for Denmark.