“Nordic countries are the powerhouse of innovation” , “The Nordics rank high in the Global Innovation Index” , “Finnish startups attract the most VC in Europe as percentage of GDP” – True statements.
But whether you are an investor yourself or just following the news, you might have wondered: How does it translate to actual investments? What are the defining trends when it comes to investing in the Nordics? Which areas attract the most funding? How do Nordic investments compare to the rest of the world?
Nordics.vc was recently initiated by Finnish Venture Capital Association and brought to life with the other respective representatives of the region (Danish Venture Capital & Private Equity Association, the Norwegian Venture Capital & Private Equity Association and the Swedish Venture Capital & Private Equity Association) with the purpose of answering these very questions thus helping VCs or anyone interested navigate, by pointing out the key trends of their extensive report.
“The Nordic Venture Capital scene is flourishing, and it deserved to be showcased to the world by bringing out great examples of the Nordic success stories. The Nordics have potential to grow to a world-class central hub for VC, startups and talent and we hope that by creating this platform we’re one step closer to getting there” – says Pia Santavirta, Managing Director of FVCA.
The Nordic countries are among the best in the world when it comes to economic stability, innovation capacity and competence. The study finds market optimism to be strong: VCs in the Nordics are increasingly optimistic about the future of venture capital in the region, and this optimism is driven by high-quality investment opportunities. The VCs now see Deeptech and Healthcare as the most prominent future domains.
More than €3 billion has been raised by VC funds in the Nordics over the last 5 years with the average of €1.2 million per investment. Despite active fundraising in the region and growth in fund sizes, this is still behind the European average of €1.7 million led by the UK and Germany.
This is mostly due to the fact that the average size of VC funds in Finland is considerably smaller, about 40 million, whereas in Europe it is already over 100 million. However, 71% of Nordic VCs believe there is room for larger VC funds in the region.
Nordic companies already attract investments both from within and outside of the region: a total of €2.7 billion was invested in Nordic startups and early-stage companies over the past 5 years, of which non-Nordic VCs have invested €1 billion – and this number has been steadily increasing.
The report concludes that the key to enabling growth is the development of the start-up and venture capital business environment, so that the Nordic countries will continue to attract skilled and high-quality companies to the region.