All the first-time venture funds established in the Nordics in 2023
Nordic Venture keeps on producing many new venture funds with very crisp and differentiated strategies. A reminder that innovation never slows down over any market cycle.
The Great Reset
2023 will likely be remembered as a unique year in recent venture history — one that many would prefer not to experience again. After three previous years of excitement, markups, and megarounds, this year has brought some sobering and a dose of reality to the venture landscape.
Atomico’s “State of European Tech” report, expects the total venture funding in 2023 for European tech to reach $45B, down by more than half (55%) compared to the record year in 2021. Nordic countries have been impacted by the same funding retreat as broader Europe, with total venture funding for Nordic tech expected to reach $5 billion in 2023, roughly down by half compared to 2022 and 2021, when the total venture funding for Nordic tech reached $9 billion per year.
But more than a recession, 2023 has been explained as the year of global venture reset, after an overheated and unsustainable period of growth in 2021 and early 2022, and a reversal to the pre-pandemic years.
The next great frontier ecosystem
Despite the reset, it’s crucial to consider the broader perspective. For Nordic Venture, 2023 stands out as the third-best year since its inception in the early 2000s.
In 2023, Nordic tech surpassed the pre-pandemic funding levels and received four times the volume of capital invested compared to a decade ago in 2014, continuing its long-term upward trend. Moreover, the creation of new venture funds in 2023 matched the levels seen in 2022 and 2021. Venture Challenge has counted 19 new funds established in the Nordic region from January to December 2023, targeting around €600m in assets under management (AUM) combined.
This is a reminder that innovation never slows down over any market cycle and that entrepreneurship and frontier initiatives do not get dissuaded by any market sentiment.
We consider a Venture fund to have been established when either 1) Fund I legal entity has been registered, 2) When the manager has been granted a fund license from the local FSA and/or 3) they have publicly announced a first close.
The Nordics is an emerging Venture Capital Ecosystem, where almost 50% of the fund managers are managing and investing their first fund, and where over 80% of the fund managers are managing three funds or less. Since 2018 we have seen almost 100 new first-time funds being launched in the region investing across all sectors, strategies, and geographies, and in the last three years, we have seen an average of over 20 new venture funds being established every year in the region.
This boom of Nordic first-time funds is the result of high-quality levels of innovation and entrepreneurship in the region, the achievement of many company success stories, a favorable social, economic, and political environment for risk-taking and positive impact, and a growing support ecosystem around first-time funds and emerging managers: The Nordic Venture Ecosystem.
A successful venture ecosystem relies on talent, infrastructure, and capital markets. And many measures are being implemented today in the Nordic ecosystem to ensure success tomorrow. That is why we believe Nordic Venture is positioned to become the next great frontier ecosystem and that is why we are so excited about the Nordic Venture Opportunity. We will tell you more about this opportunity in 2024.
The 2023 frontier managers
Below you can find the list of the first-time funds established in the Nordics in 2023 by country.
Have we missed any information? Let us know at virginia@vcchallenge.com
Finland (6 funds) 🇫🇮
- Fund size (target): €20–30m
- Geographic focus: Global
- Theme: Gaming
- Fund size (target): €50m
- Geographic focus: Nordics and US
- Theme: Agnostic
- Fund size (target): €100m
- Geographic focus: European
- Theme: Green Transition
- Fund size (target): €70m
- Geographic focus: North Europe
- Theme: Industrial Tech
Leo Capital ( Europe Fund)
- Fund size (target): €20m
- Geographic focus: Nordics and Europe
- Theme: SaaS
- Fund size (target): €30m
- Geographic focus: Nordics
- Theme: FinTech
Denmark (5 funds) 🇩🇰
- Fund size (target): €50m
- Geographic focus: Global
- Theme: Food and bioeconomy solutions
- Fund size (target): €75m
- Geographic focus: France, Denmark, Sweden
- Theme: Generalist
- Fund size (target): €40m
- Geographic focus: Europe, US, Australia
- Theme: Natural/Geologic Hydrogen
- Fund size (target): €40m
- Geographic focus: Denmark
- Theme: Generalist tech and HealthTech
- Fund size (target): €20–30m
- Geographic focus: Denmark and the Nordics
- Theme: Solutions addressing the climate crisis
Sweden (4 funds) 🇸🇪
- Fund size (target): undisclosed
- Geographic focus: Nordics and Europe
- Theme: Sustainable Ocean Economy
- Fund size (target): €2–5m
- Geographic focus: Sweden
- Theme: Women-led companies
- Fund size (target): €5m
- Geographic focus: Skåne region (Sweden)
- Theme: Agnostic
StockholmsLauncher
- Fund size (target): undisclosed
- Geographic focus: Sweden
- Theme: Agnostic
Norway (4 funds) 🇳🇴
- Fund size (target): undisclosed
- Geographic focus: Norway
- Theme: undisclosed
Fiori VC
- Fund size (target): undisclosed
- Geographic focus: Norway
- Theme: Frictionless products
- Fund size (target): undisclosed
- Geographic focus: Scandinavia
- Theme: e-Commerce companies
- Fund size (target): €2–5m
- Geographic focus: Nordics
- Theme: Generalist with a diversity focus
The Great Specialisation
What do most of these first-time funds have in common? The new Nordic funds are more likely to be niche-focused with a high-level GP team specialization.
First-time funds operate like startups. New first-time funds are created because the managers identify funding gaps and underserved market needs with high growth potential. Furthermore, to exist and succeed they need to find new ways or better ways to serve their customers -in this case the founders and the LPs-, and they need to find ways to innovate, stand out, and be more competitive.
The new Nordic fund managers are entering the market with more and more differentiated investment thesis and strategies and with clearer and more competitive value propositions to both founders and LPs. This specialization occurs across various levels: sector, theme, domain of expertise, networks, geography, and more.
Venture Challenge predicts that as the venture landscape becomes more mature and competitive, the average generalist seed investor, unless they have a brand and reputation, may struggle against niche-focused and highly specialized seed-stage investors.
In the next decade of venture capital, the managers with more chances to succeed will be those who are best positioned to capture a specific market opportunity at a certain point in time.
To navigate this new venture landscape successfully, both new and established venture funds must excel at:
- Providing clarity about their thesis and the GP-Thesis fit. Fund managers should be able to provide a unique insight, an expertise in a certain niche, or a proven capacity to compete against the non-consensus.
- Identifying and articulating a sustainable competitive advantage and point of differentiation that matters. Founders are looking for partners, not just valuation, to help them navigate the new landscape.
- Developing a strong brand and reputation and effectively communicating it in their areas of focus. In venture, brand halo, and its capacity to provide signals, matters.
If you want help developing a clear and crisp fund strategy and positioning, or if you want to become an active player in the Nordic Venture Landscape, reach out to learn more about Venture Challenge.
Thank you for a great 2023, Nordic Venturers, and see you in 2024!
For more information and stories about the Nordic venture ecosystem, join the mailing list at www.vcchallenge.com
