We've long taken the position that the Nordics have yet to be affected by the 'funding slowdown', we have indicated that we feel that investment rates may stabilise for a while, and we have mentioned that later-stage funding appears to be a little sluggish, however, we had not seen any real evidence to suggest the slowdown had made its way to Northern Europe, until now...
Based on the first five weeks of Q2, this quarter is currently on track for 153 investments totalling $236 million. Now, while 153 investments is only a couple behind Q1, itself a record quarter for both number and amount of investment, the total amount of funding projected is very low in the context of the last year and a half, falling to a level not seen since Q4 2014.
As was the case in Q1, it could well be that the second half of the quarter is a stronger one, however, with the total value currently at $90.78 million, then we would need to see another $217.22 million invested in the next six weeks to avoid the lowest quarter since 2014, a tall order even for the ecosystem that consistently defies expectations.
While the number of investments have not been affected, these additional investments are happening at a very early stage, and the later, bigger rounds in 2016 are certainly more scarce than they were in 2015.
One of the reasons why Q2 is so important in the context of the funding slowdown is that investments are typically made 6-12 weeks before they are announced, meaning that the investments we are seeing 'happen' in April and May were most likely made at the beginning of the year, when market concern was at its highest. Q2 will give us the strongest indication yet of whether the Nordics were impacted by the slowdown.
Based on the first five weeks, it is now hard to argue that they haven't been, with the remainder of the quarter telling us just how hard.