The state of the Nordic tech scene, today: Outdated assumptions versus the reality

Two years have passed since I announced my intentions to start The Nordic Web and simultaneously declared The Nordics the Worlds greatest contributors to technology.

At the end of the post I gave my reasonings for starting this publication, reasons that can be boiled down to the fact that despite the incredible things happening in tech in the region, there was still little awareness in the mainstream tech media about what’s happening there.

A couple of years down the line and incredibly the Nordics have not only continued to excel in producing amazing tech startups but the ecosystem has matured too, with venture capital and exits providing hard results in addition to the promise.

Although the wider media have cottoned on to the fact that the Nordics are responsible for producing an incredible amount of strong companies that I touched upon in that original post, reading this article on Pando over the weekend (excerpt below) made me realise that although people have updated their view in terms of the Nordics being a place where great companies can come from, there is still a lack of understanding around what’s happening in terms of the market and ecosystem these days.

As our mission statement includes ‘greater visibility and understanding’ as to what is happening in the region, I feel some responsibility over the fact that most people outside of the region still don’t have a grasp that things have changed, and fast, and where ‘per capita’ was an argument used previously when it came to comparing venture capital and exits with other countries, this is no longer needed, as despite its small population, the Nordics can now stand in their own right without relying on this.

So I’d like to take the opportunity to tackle some of the outdated assumptions I’ve seen not just in the article on Pando, but in a variety of articles in the last couple of months regarding the Nordics both in terms of the market and the ecosystem, and present the state of the Nordic tech ecosystem as it stands today.

1) Assumption: The Nordics doesn’t attract much venture capital, especially in comparison to the UK and Germany.


Venture capital is growing at a faster rate year on year rate than both UK and Germany, and the Nordics raised $1.82 billion cumulative in 2015. 

As near as a couple of years ago, the majority of Nordic startups would need to look to London to raise a decent round of funding but due to an influx of capital in the region this is no longer necessary. In fact, the Nordics are competing with London to be considered a venture capital hub itself, having raised $1.82 billion in 2015 compared to $2.3 billion for London. Admittedly it’s starting from a lower baseline, but the facts are that the Nordics are growing at a faster rate year on year when it comes to raising capital than London and at current growth rates, the Nordics would actually raise more VC collectively than London as soon as next year.

2) Assumption: There’s a lack of opportunity for big returns in the Nordics.


There were only two VC backed exits above $1 billion in Europe last year, both originated from the Nordics.

The Nordics were the only place in Europe that delivered exceptional returns for investors in 2015 with the only two $1 billion+ exits with deep roots in the Nordics, in King and Avito. If we look at the top 10 biggest VC backed exits in 2015, the Nordics saw 3, compared to the UK’s 2 (data from demonstrating that not only are they starting to compete in terms of investment but also in terms of returns as well, making the Nordics an extremely attractive place to invest in and one on a par with anywhere else in Europe. These returns are vital to the ecosystem too, and will make it even stronger, as the local investors involved in these exits will have a bigger arsenal and case for investing even more into the ecosystem in the future.

3) Assumption: Sure, the Nordics have had a few hits but that doesn’t make a successful ecosystem


The Nordics have over 10 companies up and around the $1 billion valuation mark

Most people outside of the region can only name a couple of successful Nordic startups, which is mainly due to the fact that despite an increase in awareness of the region, there’s still a lack of understanding as to what startups come from it, for example Just-Eat and King are often considered UK successes, when their roots were very much in the Nordics. This leads some people to believing that the region has only produced a couple of hits and relies on this for its reputation. In fact, the reality is anything but, with the Nordics possessing 10+ companies up and around the $1 billion valuation mark: Spotify, Supercell, Skype, King, Zendesk, Just-Eat, Klarna, Truecaller, iZettle, Trustpilot, Mojang, MySQL, Rovio for etc. This points to an ecosystem that has consistently produced a number of healthy hits over a significant amount of time and not of one that relies on one or two ‘skewing the numbers’.

4) Assumption: Nordic startups are great at well-designed fun apps, but there’s not much substance.


Zendesk, Skype, Just-Eat and Klarna are all examples of companies who have capitalised on a real business opportunity, it’s not just games and apps.

There are just as many Nordic tech companies capitalising on cold hard business opportunities, as there are producing games and so called  ‘fad-driven’ apps, with Zendesk, Skype, Just-Eat and Klarna hardly falling into this latter description. Also, although the first mainstream consumer-facing hits from the Nordics were mobile games, the Nordics had long been producing tech of substance. Especially when it comes to programming, with C++, Ruby on Rails and Linux just a few examples.

5) Assumption: The Nordics are only strong in a couple of areas, and have a strong reliance on those.


Fintech was actually the most backed vertical in 2015, ahead of traditionally strong areas like health, gaming and enterprise SaaS. Adtech is also on the rise, demonstrating a strong diversity. 

A very common misconception is that the Nordics are good at games, but not much else. The reality is, if you look at valuations and the investment being raised per vertical, there are a number of areas where the Nordics are producing strong companies in addition to gaming, such as Enterprise SaaS, health and wellness, fintech and adtech. In fact, fintech is an area that the Nordics are particularly excelling in, not just with Klarna and iZettle but with the vertical attracting more investments than any other area in 2015 giving it a solid base for the Nordics to start producing even more fintech hits. This is especially ironic when comparing the Nordics to the UK, as they rely heavily on fintech, whereas the Nordics are now adding this to a number of areas they already excel in.

In fairness, the majority of the assumptions outlined in this post were correct as near as a couple of years ago, but the market has matured dramatically in that time, and those outside of the region need to be aware of this. False assumptions not only paint a false light, they can also be harmful to an ecosystem, as they misrepresent what’s actually happening there. However, the Nordics themselves need to be better at not just communicating on all the great companies that have come from there, but of how the market and ecosystem has changed as well, so people outside of the region can get a fuller, more accurate picture.

Challenge accepted.

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“In the tech world, things move fast and companies are born anywhere in the world. I’m able to have an ear to the ground with The Nordic Web – the content is fresh, local, and of high quality, which is exactly what you need as a seed investor.

In fact, it’s through Neil Murray’s newsletter that I first heard about Mapillary. Several months later, I was fortunate to lead our firm’s investment in the Company to help drive the creation of a crowdsourced visual representation of our world”

— Nathan Benaich, Playfair Capital


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