Capital Gains: An influx of new VC funds target the Nordics.

This morning brings news of the latest fund to be established which has it's sights firmly set on the Nordics, as SEED Capital, one of Denmark's most prolific seed investment funds announced their third fund of $75M. SEED Capital have experienced a strong twelve months with exits for Contera Pharma, Sense, EpiTherapeutics, Libratone and Endomondo while Windar Photonics was admitted to trading on AIM. SEED Capital was also the first institutional investor in Trustpilot who raised a $73.5M Series D last week and remain the largest shareholder. This strong performance means there are high hopes for their third fund, which we understand they will look to expand to $100M. 

The Seed Capital announcement follows a number of funds signalling their intentions to set their sights on backing Nordic startups during the last couple of weeks, and comes only a day after Point Nine Capital also announced the closing of their third fund ($60M). Although this fund is aimed at Europe more generally (and also North America) Point Nine Capital have a good track record in the Nordics, having previously backed Zendesk and Automile.

Pawel, Christoph and Nicolas from Point Nine Capital.

Pawel, Christoph and Nicolas from Point Nine Capital.

A fund which is focused more specifically on the Nordics is Mosaic Ventures, a new London-based VC firm with their first fund ($140M) that they've already explicitly said has a focus on Stockholm and Helsinki. They've already began to make their presence felt in the region, and a couple of weeks ago I had the chance to catch-up with Mike Chalfen, Partner and Co-Founder of the firm at Arctic15, who impressed me with his passion and knowledge of the region (Interview to follow).

And Mosiac are not the only London-based venture firm with a presence in the Nordics. Balderton, Index, Playfair Capital and Wellington are just a few of the firms that are regularly present and investing in the region. Balderton's $305M Series A fund has already seen them invest in Sweden's TicTail and Finland's TrademarkNow, while Index continue to invest in Nordic startups, spurred on by their past exceptional returns having backed more than half of the billion dollar companies to have originated from the region. Another who have experienced strong prior success in the Nordics, GP Bullhound are said to have recently expanded their sidecar fund and we've already seen them invest in Sweden's Goo Technologies in 2015.

There's also a lot of activity closer to home with reporting that a number of Nordic based funds are either just closing or about to close new funds solely for the purpose of backing Nordic startups.

The biggest of these is EQT's, set to be around $600M, primarily aimed at Swedish companies, and set to start investing in the Autumn. Standout Capital have been trying to close their first fund for a while, but look set to finally manage it, with a fund size of around $95M expected with several prominent European investors on board. Government backed Almi Invest are also looking to close a fund worth around $140M to focus on Swedish growth companies. Meanwhile, Spintop Ventures are set to close a bigger fund in the next couple of weeks (around $35M) having experimented with a smaller pilot fund originally with some success.

This new influx in the Nordics mirrors Europe as a whole, with new funds popping up all over the place during the last couple of weeks, with perhaps the most notable of these being the $300M British-focused Business Growth Fund, and London-based Felix Capital who have announced a $120M fund to focus on 'digital lifestyle' startups. Passion Capital also announced it's second fund ($69M) in the last week, while we shouldn't forget that that Google Ventures also announced it's intentions to focus on Europe with a specific $125M fund last year.

Last year, we saw over 200 institutional investors provide capital to the regions startups, totalling $846.44M, and with this flurry of new activity from VC funds intent on grabbing a piece of the action, we have further evidence to suggest that this will be a record breaking year for Nordic startups in attracting Venture Capital, and a definitive end to the stigma that it's hard to raise money in the Nordics. 


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