Analysis: The Nordic funding landscape: 2014 vs. 2015

Ahead of our Q3 funding analysis next week, I decided to look at Q1-Q3 as a whole and compare it to this stage of the year in 2014. With Spotify's $526M monster round, the venture capital scene has looked very rosy in the Nordics in 2015, with $1 billion in funding passed in a year for the first ever time, and the Nordics on course to raise more than London in three years.

But how much of this has to do with Spotify? And how are individual countries performing in raising venture capital compared to last year? By comparing all of the investments in 2014 up until September 30th, and doing so for 2015, we hope to discover the answers.

First up, let's look at the number of investments we've tracked.

Although we have to leave some room for the fact that we've undoubtably improved at tracking investments in the region in the last year, the number of investments is significantly up at this point of the year compared to 2014, 51.15% up to be precise. We are seemingly on course for 250+ investments in Nordic startups this year, compared to a total of 179 in 2014.

We've already touched on the fact that this is a record breaking year for the Nordics in terms of raising venture capital, but just how ahead of the curve are we?

The total amount of capital invested in the Nordics is up 143.68% on 2014, and even without Spotify it's up 55.28%, a significant increase in terms of capital being invested.

This of course has made a difference to the average round size as well.

However, it is interesting to note, that the average round size if we discard Spotify's round, although higher, is not significantly so. This is mainly due to the increased number of investments that are happening, so although significantly more money is being invested it is being invested in more companies, so although on the surface it may appear worrying that the average hasn't increased too much if you remove Spotify, in my opinion it's a healthy thing, as it simply means more money is coming in and more Nordic startups are getting funded.

But how has the money been divided this year between the countries compared to 2014?

Sweden's dominance has increased, which has of course had consequences for the other countries, Denmark and Finland in particular have seen a smaller share than they did last year. Iceland and Norway have both seen increased investment though, and both are registering a larger share of the capital in 2015.

However, to get a better understanding of how each country is doing for investment compared to last year it makes more sense to compare the total amounts for each country in 2014 and 2015.

So although they may be taking a smaller share of the money coming in, Denmark and Finland have pretty much seen the same amount of investment this year as they did last year, in fact Denmark has actually raised about $25M more. Iceland have raised significantly more in 2015, mainly due to Verne Global ($98M) and CRI ($45.5M). Norway have also raised a lot more this year, over 4x more in fact. While Sweden continue to steal the limelight and money, with Spotify's round meaning they have almost passed $1 billion themselves in 2015.

Average round size also helps us get an idea of how the years compare for each country.

Denmark's average round size is the only one which is lower in 2015 than it was in 2014. Iceland's is impacted heavily by their two monster rounds, and doesn't really give a fair reflection. Norway's and Finland's hold more credence though, and both demonstrate that their companies are able to raise more money in 2015. Sweden's is of course heavily impacted by Spotify, and it's worth pointing out that without Spotify, the average round size is actually $4.67M. This is mainly due to the fact that we've tracked 87 investments in Sweden compared to 41 last year, showing that investors are heavily backing Swedish companies as the mainstream media and investment scene continues to switch on to Sweden's track record in producing billion dollar companies.

In conclusion, although Spotify's round has had a huge impact on 2015's figures, it's clear to see that more companies are being funded, and therefore a bigger amount of money is flowing into the region, with all countries at least on par with 2014, and in the case of Iceland, Norway and Sweden significantly seeing more investment in 2015.

Keep an eye out next week for our Q3 funding analysis, where we look at the total amount of investment raised by Nordic startups in Q3 and break it down by stage, country and vertical.

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