Highlighting March's most significant investment, exit and story

A month barely goes by without Spotify dominating the headlines, yet March brought us probably the biggest Spotify news yet, as their $1 billion convertible debt round had the whole industry talking. Elsewhere, the start of spring also saw one of the regions hottest FinTech startups get acquired, as well as bringing news of another Nordic powerhouse passing an impressive milestone.

The Investment

Spotify raises $1 billion in convertible debt

In what was the largest and certainly the most controversial funding round in Europe last month, Spotify closed a $1 billion convertible debt round. While TechCrunch likened the terms to doing a deal with the devil, I'm taking a much more positive outlook on the deal.

Firstly, no growth financing is without risk, so in theory every deal could be considered a gamble. Secondly, much has been made of the potential penalties that Spotify could potentially have to pay their backers should they fail to IPO in the next couple of years, however, what should be pointed out, is that the financiers of the deal are backing Spotify to succeed, and the penalties are simply insurance, rather than opportunity. One thing for sure, they will make more money if Spotify succeed rather than failing and paying out penalty fees.

There is also an example of a deal of this type happening before, when Uber in 2014 raised a similar round. We now know that this was not their peak valuation and they went on to raise a larger equity round subsequently. And I am certainly prepared to state that even if it was impossible for Spotify to raise an equity round at a higher valuation this time around, I am sure they will go on to surpass their previous $8.5 billion valuation in the not so distant future.

Finally, it would be remiss of me not to mention that Spotify's monster round was the first $1 billion+ round raised by a European company, how's that for significant? 


The Exit

Finnish FinTech startup Holvi was acquired by Spanish banking giant BBVA

While investment has been flowing into the region's FinTech startups over the last year or so, 2015 actually saw no Nordic FinTech exits, indicating that while promising, the FinTech ecosystem in the Nordics was still in its early days. Therefore, Holvi being acquired by BBVA is fairly significant for the region, as Holvi has been long-regarded as one of the Nordic's most promising FinTech startups, and perhaps could lead to more of the regions FinTech startups being acquired, as Europe becomes increasingly aware of the Nordics prowess in producing strong FinTech companies. 


The Story

Supercell reaches 100 million daily active users

The Nordics actually possess another company that has had at least as big an impact as Spotify in their respective market, and that's Finnish gaming giant Supercell.

March brought news that Supercell had passed 100 million daily active users for their games. To put that into context, that's as many people as Twitter has using it every day. What's particularly impressive about this milestone, is that Supercell only has four games on the market, and they revealed that they had killed 14 games that they didn't consider good enough. An interesting strategy in an industry that is often dominated by studios that are churning out game after game.

However, it is clearly one that is working, with 100 million daily active users putting them in the realm of social media and messaging apps as the most used application worldwide, and providing the Nordics with another global household name.

If you really want to keep on top of what's happening in The Nordic startup scene, then sign up to our weekly newsletter where we curate all of the need-to-knows news from the region

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