The most consistent ecosystem for investments in the Nordics was at it again in Q3, with a steady 22 private tech vc investments keeping pace with recent quarters and positioning Norway for another strong year for investments, and with a particularly strong Q4 the chance to surpass 100 investments for the first time in a calendar year.
In Q3, Norwegian startups saw a total of 22 private VC tech investments totalling $24.7 million.
If the number of investments were consistent, the amount invested was unfortunately anything but. In fact, the amount invested was the lowest in a quarter for two years. However, as we will see below this is largely driven by the sheer number of investments happening below $500,000 so this shouldn’t necessarily be seen as a negative, rather a natural consequence of an ecosystem that is still fairly early in comparison to others in the region. A Q4 with $50million or more raised will still see 2017 with more capital invested than last year.
As we mentioned above, a large proportion of the investments in Q3 happened below $500,000, in fact 54.55%, more than 1 in 2, happened in this range. There were just two investments above $3 million, although we shouldn’t forget that in Q1 and Q2, Norway saw a decent uptick in the larger rounds, meaning that when looking at the year as a whole, it looks pretty healthy across the funding pipeline.
Despite the increase in investments, Norway has yet to see a vertical put its head above the parapet as the one that attracts the most investment. Although Energy in Q3 actually saw double the investments than any other vertical and represented 18% of all investments, the sample is still too small to draw any strong conclusions from this.
Yet it was an Energy startup in Otovo that recorded the highest funding round of the quarter with a $6.9 million investment. Catalystone was the only other company to reach the $5 million mark.
Oslo was accountable for nearly 3 in 4 investments, although there was also activity in 5 other Norwegian cities. There is now consistent investment activity in 5 or 6 Norwegian cities every quarter which is certainly a positive development.
International investment remained low in Q3, with the percentage amount remaining fairly similar throughout 2017. This is to be expected as the majority of the activity is very early, but still, with Norwegian companies continuing to scale, it would be good to see International investors becoming more engaged sooner rather than later.
Although no longer growing at the pace it once was, the consistent nature of investment into Norwegian startups is a positive development in its own right and provides evidence of an ecosystem finding its feet and having the resources available to support an increasing amount of early-stage companies. With investments into scaling Norwegian startups also prevalent at the beginning of the year, the Norwegian ecosystem may not be growing as fast as it did last year but it is certainly still growing in maturity.