Long gone the times when Ericsson, Ikea or Volvo were the equivalent of Swedish innovation. Now Skype, Klarna or iZettle are the men of the hour who put Sweden in the top league. Being the home to more $1 billion-plus companies per capita than anywhere outside of Silicon Valley, with its world-famous technology education, work-life balance and a self-sustaining ecosystem, global success has never been a more realistic outcome for a new generation of Swedish startups.
The next generation of startups are here
In 2017, Sweden doubled its exits and Spotify’s 2018 IPO shook things up for good. No wonder Sweden is ranked first as a destination for investments where technology readiness is a criterion. Investments are indeed flowing and breeding unicorns seems to be more than a temporary peak, as a self-sustaining, stable ecosystem is on the rise with a next round of unicorns coming in 3-5 years.
After all the successful exits and IPOs, surge capital is being reinvested through highly active angel investing and VC funds while also breeding the new generation of founders. Along the way to Spotify’s IPO for example, it has created its own mini-ecosystem of employees who have left to found their own startups. This effect creates a pool of entrepreneurs who are not only talented and ambitious, but have the skills and experience in global scaling. And their success inspires the new generation: students coming out of KTH are no longer seeking career opportunities at established corporations but are aspiring to start a business of their own.
A global starting point
Another factor contributing to the Swedish success stories is the limitations of the local market. As Stockholm is in the top tier of the startup world in Europe with the likes of London, Paris or Berlin (all with massive local markets), startups starting from here are required to have a global mindset from the get-go if they want to build something big. Now there are more than enough proof that Sweden is an ideal place to start your global journey from, there are several factors to take into account when scaling your business in new markets successfully.
As former Klarna CMO, Erik Engellau-Nilson said, the most important things are to have the right people on board to preserve the culture, maintain the vision as they will be the ones pushing through the hardships towards success – even when everything seems to be falling apart.
Getting started in the ecosystem
A highly accelerated network effect breeds startups overnight, as founders, serial entrepreneurs, investors, people who have worked previously together are constantly crossing paths, sharing ideas – and starting new companies along the way. But where do these encounters happen? Here’s a list of places and events to hang around if you want to get started in Stockholm.
SUP46 – Known to be the home of the Stockholm’s startup community and the key meeting point for all startup enthusiasts, SUP46 functions as a membership-based community, where members are cherry-picked and offered funding, mentorship and coworking space.
Epicenter – Epicenter is Stockholm’s first digital House of Innovation and runs innovation labs, hackathons, ideathons and offers flexible workplaces, studios, meetings rooms as well as world-class workshops and international lectures all year long.
Things – Things is a 2000m2 coworking space for hardware startups, focusing on IoT, automation, robotics, 3D scanning/printing and energy. Members are offered three floors of coworking space, event space, meeting rooms, prototyping and testing facilities, as well as access to an established network of investors, external services and manufacturers and collaborative opportunities with corporate partners.
Norrsken House – Norrsken House is Europe’s biggest tech hub dedicated to social impact and houses people with the vision to change the world. Placed in a 2400m2 retrofitted tram depot in central Stockholm, the one-stop-shop for social innovation provides top-notch infrastructure.
The Factory – An ongoing project with a grand opening set for Q4 2019, the Factory is said to become the largest innovation and tech hub in the Nordics. Backed by the Swedish venture capital firm Wellstreet, the Factory’s top-class infrastructure is planned to host 1400+ people, 100+ startups and scaleups, VCs, a tech school, labs, and innovation centers.
Save the date: top events to attend
Be seen and participate! Make sure to also check out these upcoming events to accelerate your network and get to know more about the startup scene in Stockholm.
Sting Day 17-18 October 2019 – Sting is an exclusive event for 60 selected Swedish startups and 200 investors from 15 countries. Top level networking is guaranteed.
Arctic15 Stockholm 5-6 February 2020 – Arctic15 is the most effective matchmaking event in the Nordics, bringing a focused international crowd of startups, investors, corporates, media and influencers under one roof. Get your tickets here.
Stockholm Fintech Week 11-15 February 2020 – The biggest fintech event of Sweden brings together the brightest in the region for 5 days of knowledge sharing.
Sweden Demo Day 2020 TBC – The “unconference” focuses entirely on networking, cutting out the “normal” agenda you find during startup conferences, like speeches and panels on stage
STHLM Tech Fest TBC – The biggest annual gathering of startups, corporates and investors.
Learn from the bests: top Stockholm startups to watch in 2019
VOI – Electric scooters have take over the world, lead by VOI, a Stockholm-based startup. You might be surprised that were only founded in the summer of 2018 and have already managed to close an investment round of $50 million.
Tink – Tink is a cloud-based platform that provides the infrastructure and data products that are enabling the future of financial services.
Elsa – ELSA has developed a personal medical information system that allows users to match their medication against their genome, their medications, their diet, and other daily habits and lifestyle through an app. With $700,000 in seed money from Inventure, Crowberry Capital, angel investors, and with excellent prospects of interest from pharmaceutical companies, the system is now being internationalised.
Anyfin – Anyfin’s platform leverages publicly available consumer data and AI to enable consumers to refinance their existing loans within seconds, simply by taking a picture of their loan statement.
Karma – The app connects surplus food from restaurants, cafes and grocery stores to consumers for a lower price. As a result, users eat great food for less and businesses receive an additional revenue stream — all while reducing food waste. In the summer of 2018, they managed to close their second round of funding at $12 million and have onboarded over 2000 locations to the app.
Meet some of the most active VCs
Last year saw 165 transactions worth nearly €645.5 million according to Pitchbook data, compared with more than €1 billion the year before for 287 deals. Both years were eclipsed by 2016’s heights of €1.5 billion spent across 378 transactions. Even though VC funding within Sweden is declining, Swedish VCs €1.6 billion, up from €1.2 billion two years before, perhaps indicating that Swedish VCs are increasingly turning their sights towards companies outside their home country.
Here are some of the most active VCs you should know about, that are actively seeking investments:
Almi Invest – Prefers to invest in Sweden based startups and operating in the technology, life science, industry and technology sectors
Creandum – Invests in technology companies operating in the consumer internet, software and hardware sectors. Portfolio companies include Klarna, iZettle, Voi, Kahoot or Resolution Games.
EQT Ventures – EQT Ventures is part of EQT, a leading investment firm with more than EUR 61 billion in raised capital across 29 funds and around EUR 40 billion in assets under management.
NFT Ventures invests in companies operating mainly in the financial technology sectors.
Kinnevik – E-commerce, financial services and healthcare solutions are on their radar.
As always, action matters. Provided here is a guide to get started in the ecosystem, but the rest is up to you.