Sweden was not immune to the slowdown we witnessed across the region in Q3, although it still recorded 89 investments totalling $247.3 million. However, this was the slowest quarter for investments we’ve seen in Sweden since Q1 2016. It was a particularly quiet summer, but the signs we’ve seen so far in Q4 indicate that Sweden is still on course to record more investments this year than last.
A quick note on methodology before we dig in:
* We only record private minority (equity and loan) investments into Swedish tech companies
84 or more investments in Q4 will still the Nordic’s dominant investment ecosystem witness some level of growth in 2017. This was a strong quarter in Sweden last year and the signs are there that we can expect something similar this time around.
The amount of capital was also the lowest we’ve seen so far this year, however (removing Spotify from the equation) 2017 is shaping up to a much stronger year for the total capital invested into Swedish startups than 2016, as more and more of the Swedish startups who’ve raised seed over the last 18 months continue to move through the funding pipeline and raise larger amounts.
There’s good news in terms of where the action is happening, with investments being made in all shapes and sizes. The resurgence in investments at $500,000-$1M continued although in Q3, $1-3M just about edged it out. 1 in 2 investments are still happening below $1 million.
Health and Wellness, Retail and FinTech had a double-figure number of startups raising in Q3, with other Swedish favourites Enterprise SaaS and Entertainment and Music following behind. Swedish Deep Tech and Edtech startups both had a strong Q3 for attracting investment.
Some familiar names raised the largest amounts in Q3, with most of the below having been around for some time, with no real breakthrough Swedish startup seeing a particularly large round in July, August or September.
Stockholm leads the way as ever, although Malmo and Lund both recorded a double-figure number of investments demonstrating that there is plenty of life and activity taking place in Southern Sweden as well. Stockholm accounted for 57% of the investments, a decrease from the 67.5% in Q2 and the 63.7% seen across 2016.
International investment activity remained low as Swedish startups continue to take advantage of the multitude of local investment available across all stages, as Sweden takes advantage of having the most mature local investment ecosystem in the region. The 12.4% is even lower than Q2’s 14.4%.
As can be expected when we record quieter quarters across the whole region, the region’s largest contributor to these investment numbers also was quieter than usual. Still, 2017 is on course to (just about) be a growth year for the number of investments and will definitely be so for the amount of capital, and with increased investment activity dispersed across Sweden there is certainly plenty to be positive about even if the Swedish summer stepped on the brakes slightly.