The 2015 Swedish Funding Analysis

One country in 2015 contributed significantly more to the record year of funding for the Nordic startup scene than any other, and after highlighting a few country-specific stats for it when we unveiled our 2015 Nordic funding analysis live at the #STHLMTech meet-up a couple of weeks ago, it's now time to dig much deeper into Sweden's own record year of funding, in our final country specific funding analysis for 2015.

In 2015, we tracked 143 investments into Swedish startups, totalling $1.07 billion

As was the case elsewhere in the Nordics, the year picked up momentum as it went on, and after starting the year relatively slowly with just the 18 investments in the first quarter of the year, they finished it with 55 in the final three months.

In the year that the Nordics passed the $1 billion mark collectively for the first time, incredibly Sweden managed to pass this individually as well, with Spotify of course playing a significant part in this. However, Sweden also possessed a number of other companies raising larger later-stage rounds that also contributed heavily. In fact, the top investments accounted for 75.62% of the total raised in 2015.

The pipeline for Sweden looks pretty healthy with around 3 in 4 investments happening at seed or below, and 1 in 4 from Series A onwards, demonstrating that we can likely expect impressive funding totals for the next couple of years due to the sheer amount that received seed funding in 2015, with some of these companies set up to raise their A's and B's in 2016 and 2017. 

The median rounds of Sweden are pretty much in line with the Nordic medians, at Seed ($1.04 million), Series A ($5 million) and Series B ($15 million), however it is at Series C where Sweden particularly excels in raising the larger rounds, with the median of $38.4 million significantly higher than the $30 million across the region, demonstrating its ability to be able to better attract the larger later rounds than its neighbours.

Fintech was comfortably the vertical that saw the most investments in Sweden in 2015, followed by E-commerce. Gaming, a vertical that has traditionally been very popular in Sweden, only saw 5 investments, the same number as Health and Wellness and Sales and Marketing. Also proving popular was media and audio and music, another area that Sweden is becoming known for particularly excelling in. 

Sweden's 143 investments in 2015, was in contrast to 57 we tracked in 2014, resulting in a staggering 151% growth rate year-on-year.

However, growing at an even faster rate is the amount of investment itself, as it grew from $393.7 million in 2014 to $1.07 billion in 2015, a 171.57% growth rate.

When we started The Nordic Web a couple of years ago, one of the reasons for doing so, is we believed the Nordic brand to be stronger than any of the individual countries, and that the region would be easier to market than any of the five countries themselves. However, such is the rapid growth rate of Sweden when it comes to recent investments, exits and 'unicorns', they've really put themselves on the map as a standalone ecosystem, and no longer to lean so heavily on the Nordic brand.

Of course, Spotify have played a big part in the dramatic increase in the headline number when it comes to amount invested, but even without Spotify, Sweden would still nearly have raised double the amount its nearest Nordic neighbour, as well as boasting 142 other investments. With Spotify set to raise another $500 million this year, it's likely that we will see Sweden pass the $1 billion mark on their own again in 2016.

Equally possible is the fact that we will see the growth rate drop off a little bit in terms of the amounts raised, however the number of investments is only set to increase further as more and more investors become aware of what is happening in Sweden right now, and the ecosystem continues to mature. We are also beginning to see evidence of past successes invest back into the ecosystem, with the King founders setting up their own fund, the Avito founders looking to re-invest into the Swedish scene and prominent entrepreneurs such as Sebastian from Klarna also making angel investments. 

For the last couple of years, the talk has always been about the UK and Germany being the big two in Europe when it comes to startup ecosystems, due to the capital deployed there and the number of 'unicorns', now that big two has become a big three, and forget per-capita, Sweden is now more than capable of holding its own in any conversation, regardless of population, and we can expect this argument to only strengthen in 2016.

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