Although six weeks is a relatively small sample, there are a number of trends emerging already from the investments at the start of 2016 that give a good indication as to how the rest of the year might unfold. We’ve looked at all the data-points from all of the investments so far, pulled out the most interesting ones, and subsequently analysed what they could tell us about the rest of 2016.
1. The rate of the number of investments is not slowing down
The first six weeks of 2016 have brought us 80 investments into Nordic startups already, comfortably surpassing the 55 investments that the first quarter of 2015 saw, despite only being halfway through Q1 2016. If this rate of investment was maintained then 2016 would see 640 investments in Nordic startups, compared to the total of 339 in 2015.
Not only do the first six weeks show that the rate of investment is not slowing down, it is in fact slightly faster, with 2016 currently projecting a 88.79% growth rate for the number of investments, compared to the 87.29% we saw in 2015, demonstrating that despite the impressive number of Nordic startups in 2015, we’ve likely not seen this peak yet.
2. There will be fewer ‘monster’ rounds
At this point of 2015, we’d already seen a $98 million round for Verne Global and $40 million for Saltside. In contrast, so far in 2016, Vivino’s $25 million is the largest round. Now, although six weeks is a very small sample for something of this kind, there are enough pointers to suggest that we will see fewer larger rounds in 2016, with only 4 $10 million+ rounds in the first six weeks of 2016 (compared to 6 in 2015). And of the $10 million+ rounds, the median so far in 2016 is $14.55 million compared to 2015’s $22 million.
3. The amount of capital invested will level out
The first six weeks of 2016 have so far seen a total of $166.86 million find its way to Nordic startups. Following this rate of investment, 2016 would see a total of $1.33 billion invested. However, taking into consideration the practically inevitable $500 million Spotify round (as 2015 also benefitted from) then the total amount for the year would end up at around $1.83 billion, almost identical to 2015’s $1.82 billion. So, despite the number of investments continuing to increase, the amount doesn’t look like it will increase by much. This is due to the majority of the increased investments happening at pre-seed and seed, and the fewer larger rounds we expect to see in 2016 as we touched on above. And this point is best demonstrated by the below chart, with the first 6 weeks of 2015 seeing significantly more investment than 2016, despite only having 25 investments compared to 2016’s 80.
4. Other cities in Sweden set to profit from increased investment
There’s no doubting that Stockholm is the dominant hub of the Swedish scene, with 83.4% of the amount invested in Sweden in 2015 going to the capital’s startups. However, in 2016 there are signs that other cities in Sweden could be set to profit further from the increased attention and investment into the country’s startups. When we look at where the investments in Sweden have been made so far in 2016, ‘only’ 62.86% of the number of investments have been made in Stockholm. The cities particularly benefitting from an increased number of investments in 2016 so far are Gothernburg (17.14 of the Swedish investments) and Malmo (14.29% of the Swedish investments), it will be worth keeping an eye on these cities throughout 2016 to see if there is a small shift as to where the capital gets dispersed in Sweden or whether the year has just seen a strong start from these places.
5. Fintech is the new darling of the Nordic startup scene
After pushing gaming, enterprise SaaS and health and wellness aside to be the beneficiary of the the largest number of investments in 2015, the first six weeks show that Fintech is set to dominate the investments again in 2016, and it is now well established as the new darling of the Nordic startup scene. The first six weeks of 2016 have seen 8 Nordic fintech startups pick up investment, comfortably more than any other vertical, and at a rate that projects 64 Nordic fintech investments in 2016, nearly triple 2015’s 23.
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