Nordic startup unicorns increased 6.1x

Today’s Insights 🔍 

• Growth of Nordic Unicorns

• The $4.5bn Angel Investment

• Sweden’s Startup Dominance

• The Pensions Investing in Startups

Read Time: 2.5 minutes

Growth of Nordic Unicorns 📊

The Nordics account for 61 of the European startup unicorns. With a 6.1x growth in unicorns, Sweden, Norway, Denmark & Finland attract 12% of total European startup investment, while only accounting for 3.7% of its population and 8% of the GDP.

In 2022 the Nordic’s received three times more VC investments per capita than the European average with a total of $11.7bn invested across the region.

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Startup feature
The 4.5 billion dollar angel investment

Klarna, the Swedish based ‘buy now, pay later’ fintech, was established in 2005 and before recent struggles achieved a valuation of over $45 billion.

The three co-founders Sebastian, Niklas & Victor have turned Klarna into Europe’s largest fintech unicorn with over 90 million customers and 200 thousand merchants.

Despite being a success for the new market of millennials, the investors of 2005 were highly critical of the business model.

When looking for early-stage investments they were largely unsuccessful until Jane Walrus, an angel investor, handed them a €60,000 investment for 10% of the startup.

At the peak the investment would be valued at $4.6 billion and have a 75,000x return.

For the case of Klarna it highlights the role of angel investors have in early-stage investments, while the established VC’s, government funds & corporate investors provide growth capital.

Sweden leading the growth 🌱

Sweden accounts for the vast majority of startup unicorns in the Nordics, with an increase from 5 to 36 unicorns since 2017. This is largely due to Swedish startup focus on fintech and energy sectors which account for over 80% of startup investment in the Nordics.

This has made Sweden a key hub for startup funding, representing over 55% of VC capital for the Nordic region, as well as holding the largest share (43%) of domestic early-stage investments.

Nordic pension fund capital 💹 

Nordic startups receive 38% of its investments from pension funds. With a risk-averse investment approach, pension funds support late-stage investments which account for roughly 70% of overall startup funding for the Nordics.

Compared to the average of a 14% CAGR of startup investments for Europe from 2017 to 2022, the late-stage investments of the Nordic startups has increased more than 50% year-over-year.

SearchVentures Insights

The data spotlights the significant impact of Nordic investment structure on the Europe’s startup ecosystem, revealing a sharp increase in unicorns, particularly for Sweden. This trend underscored the significance of emerging hubs and their capacity to drive growth via focused investments and a supportive capital framework that provides startups with a investments in both early to late stage growth.

The region’s success stories such as Klarna, driven by a mix of angel investments, governmental backing, and institutional pension funds, highlight a compelling blueprint for fostering high-growth ventures.

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Cheers,

Odin Lund & Hariprasad Mohandas