The current state of the investment market in Sweden provided by Magnus Erneg?rd

If we look at the percentage of the investor sector in deal count, we have experienced a yearly decline in early seed stage investments at the expense of a higher portion of VC later stage. But still, the total "cake" has gotten bigger enormously in terms of the number of deals and funding amount.??

Sweden and Stockholm's Startup scene, in particular, has been one of the front runners coming to Fintech and Life Sciences. But we have, during the last couple of years, experienced the Impact sector is expanding rapidly. Stockholm and Sweden are well-positioned for global expansion for Impact investments in Startups. Over 50% of VC last year was invested in Impact ventures in Sweden.?

We must remember that year 2021 was a record year. But even if we consider the significant raise of capital in equity for the Lithium-ion battery maker Northvolt alone with 2,5 BEUR mid-last year, we see the Impact sector flourishing and expanding rapidly in Sweden with an additional amount of 1,8 BEUR in the previous year. So, comparing YoY 2022 vs 2021, Sweden, like many other countries and Startup clusters, has experienced a rather significant drop compared to the record year 2021 in funding but also in exits, including IPOs. With the risk of a possible recession, increased interest rates, and higher inflation rates, we see tougher market conditions for funding. Startup ventures will likely lower their valuation and consider the investor's demands requesting preferences and participation rights more frequently than some years back.

So, we are coming from a higher level when it comes to funding amount and deal flow. Dealroom (A global provider of data and intelligence on Startups and Tech ecosystems) concluded Sweden has seen the fastest growth in enterprise value in Europe by 4,8 times in 2021 compared to 2017 and has the 5th most significant pool of potential future unicorns in Europe. The positive conclusion is that Sweden is recognized for having an innovative Startup ecosystem and produced the most unicorns per capita after Silicon Valley.??

?I think the Startup ventures, VC firms, and Angel investors will adjust to the higher rates, and the funding market will stabilize. The Startup funding will always be available for good, solid, promising Swedish ventures, and likely in the Impact sector. Sweden is attracting many international investors who see the Swedish Startup Impact scene flourishing.?

Some examples of?recent deals in Sweden

There have been quite some large funding rounds during the last months, like Kry, the digital healthcare app, which raised about 1.6 BSEK in capital and a loan facility in a Series D round from existing backers such as Index Ventures, Accel and Creandum , among other investors.?

But in Sweden, we have also had several exciting yet smaller Startup funding rounds during the year so far.?

Magma

The launch of Magma uses AI and algorithms to support Swedish and American primary and secondary schools in teaching mathematics. The students report their calculations in the service with a drawing tool. This can be done on an iPad or computer and automatically

corrects the student's answers while the data is streamed to the teachers in real-time. The service has been well received in Sweden and the US, where Magma continued to scale up the business and will look at further markets such as Great Britain, Germany and Netherlands.

After the latest round of SEK 52 million, the venture is valued at SEK 230 million with heavy tech investors such as Soundtrap founder Per Emanuelsson , Evolution Gaming founder Fredrik Osterberg and Kim and William Olsson from the Stena Group IT .

Normative

The impact company Normative.io , which ambition is to support businesses to precisely measure how much emissions they are generating, raised a few months ago SEK 325 million in a Series B round. The backers were the climate-tech growth investor Blume Equity , Future Five in Copenhagen and Horizon Equity Partners , among others.

Flow Neuroscience

The Swedish Medtech venture Flow Neuroscience closed last year with an 8.5 MEUR Series A round, with investors such as Swiss Health Ventures , Khosla Ventures , and Zühlke Ventures. Flow Neuroscience is planning to accelerate its US expansion through clinical trials and FDA approval with its range of self-managed solutions in the mental health area. The financing will also support having the treatment devices be more patient-specific and focusing on developing non-pharmaceutical and self-managed solutions for mental health disorders, such as anxiety and depression.

Movs Technology Group

The V?ssla Micromobility founder's Svenska MOVS? , whose ambition is to simplify sustainable commuting through the rental of climate-smart vehicles, recently raised SEK 45 million in equity, among others, Svea Bank as investors.