The Local VC and Startup Scene: Sweden
ABBA, IKEA and Elks? If it were not for the title, you would probably know which country I am writing about in the second part of my series on VC and startups in different parts of the world by now. But if these are the first things you think of when hearing about Sweden, think again. The Nordic nation has much more to offer than this, especially in terms of entrepreneurship and VC. Take Skype, Spotify, SoundCloud and the Minecraft developer Mojang to name a few. Guess what, they do all have their origins in Sweden. This is particularly impressive when keeping in mind that the country has a total population of only about 10 million people. Growing up with the adventures of Nils Holgersson, Pippi Longstocking and Emil of Lönneberga, I have always liked the Swedes and after some visits to the country this relationship continues to this very day.
In 2016, the country’s tech VC market has grown quite significantly, with roughly twice as many deals in Q4 of 2016, compared to the same period a year earlier. The number of active investors has grown by 129% and angel investors play the most important role, accounting for more than 50% of all funding for tech companies. Of course, there is a Iot of foreign participation in the market, yet, it is interesting to note that the dominance of investors from either the USA, the UK or Germany has sunk from 68% in 2015 to 56% in 2016.
Some of the larger and more active domestic-based VCs include Northzone, Industrifonden, Creandum and EQT Ventures, a company which you might already have read about in my story about Germany. With regard to corporate engagement in the Swedish startup world, e.g., IKEA just launched its very own accelerator program called IKEA Bootcamp. What about the academic ecosystem, another important prerequisite for successful startup nations? Uppsala University and KTH Stockholm seem to offer some of the leading entrepreneurship degrees, considering that their alumni include people such as Niklas Zennström, one of the founders of Skype, and Daniel Ek, the CEO of Spotify. Stockholm is among the most attractive cities to found a startup (and certainly to live in) in Europe and thus it does not come as a surprise that it is also the number one hub within Sweden.
It is no secret that the Swedish society is a rather collectivist one. This, however, might in fact be one of the key differentiators and success factors, as founders build strong teams and come up with business ideas which are aimed at improving everyone‘s life. In a 2016 article by TechCrunch, calling the Nordic nation “a tech superstar“, Stina Ehrensvärd, CEO and founder of Yubico, put it this way:
“The Swedish culture has a unique mix of educated, independent people who are also good team players. Swedes enjoy a good social welfare system that provides a cushion to take risk, we have not been oppressed by wars, and no country in the world has more innovation per capita.“
Hopefully, you will see the country in a different light the next time you hear about it. Should you ever travel there be sure to make use of the „allemansrätten“ (everyman’s right), an age-old rule allowing anyone to enjoy what nature provides, both in terms of the countryside’s beauty and its fruits. Funnily enough, this rule has just led to a genius tourism campaign in the course of which the entirety of Sweden’s countryside has been put up on Airbnb. If you want to learn more, I can highly recommend taking a look at Industrifonden’s annual “Swedish Tech Funding Report“. It presents everything you need to know in a very condensed manner. In fact, the 2016 report has been a very valuable resource for me.
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