Do investments exacerbate inequalities in the Nordics? How can we move towards a more inclusive ecosystem?

Edited By: Tina Dastur

Cover Image Credits: Pratik Hariharan

Diversify Nordics Summit 2024: Scaling Hope, Justice And Belonging

Diversify is an Oslo-based non-profit organisation that works to advance measurable diversity and inclusion across companies and communities worldwide. It also addresses societal inequities through panel discussions, fireside chats, workshops and keynote speeches by experts on topics ranging from entrepreneurship and professional development to research at its annual conference, Diversify Nordics Summit (DNS).

“Our work exists at an intersection of social justice, democracy, climate sustainability, and belonging. Intersectionality, diversity, equity and inclusion are foundational to how we engage. The Diversify Nordics Summit is an annual global gathering that brings together multiple stakeholders to tackle pressing global challenges,” said Chisom Udeze the founder, of Diversify.

Held in Norway’s capital for the third year running, DNS is the first-ever conference on diversity, equity, inclusion, and belonging for Denmark, Finland, Iceland, Norway, Sweden, Faroe Islands, ?land Islands, Sápmi, and Greenland, and at this year’s edition, one of the conversations centred on investments and if and how they fan the flames of inequalities.?

To ascertain whether the venture capital (VC) ecosystem in the Nordics is driving inclusive innovation or merely maintaining the status quo, the team at Diversify invited:

1. Phaedria Marie St. Hilaire , Angel Investor at Ada Ventures
2. Regine Larsen Lindtvedt , CEO, If Services, at If Insurance
3. Tom Miskin , Lead at Oslo Innovation Week and Nordics?
4. Kogulan Kugathasan , DEI & Wellbeing Lead, Global People and Culture at SimCorp

In an illuminating panel discussion moderated by Charlotte Jónsdóttir Biering , Global Diversity and Inclusion Lead at Marel, these four eminent personalities shared their thoughts, experiences, and suggestions for improvement.

Inclusive vs. Traditional Investment

“Angel Investing, for me, is an extension of my ongoing impact work with Professional Women of Colour (ProWoc) and DEIB Consulting,” said St. Hilaire.?

According to Danmarks Eksport- og Investeringsfond (EIFO) and Startup Den[t],

• 2,309 business angels are currently active in Denmark
• 1 in 10 Danish business angels are women

What these numbers do not reflect, however, is the share of ethnic minorities in the VC ecosystem.?

St. Hilaire, who is both an angel investor and scout for Ada Ventures’s European Angel Program, insisted that impact investing was not charity. “There is profit to be earned. Scouting and selection is where the difference can be made,” she emphasised, in reference to Ada Ventures’s Inclusive Alpha approach.?

A UK-based inclusive fund started in 2019, Ada Ventures entered the Nordic market earlier this year, investing in 10 business angels from under-represented backgrounds in Denmark.

St. Hilaire pointed out that 49% of Ada’s companies have a female founder and 70% have at least one founder from an under-represented group. When compared to the average in the UK–11% and 4% respectively–these numbers are significantly higher.

Diversity in Decision-Making Positions?

Lindtvedt, who works closely with the venture capital market across the Nordics, highlighted the role of the media in fostering a more diverse ecosystem in the Nordics, saying, “We need to see more stories of role models from minority backgrounds coming to the fore.”

The If Services, at If Insurance CEO expressed frustration over the worsening statistics pertaining to investment in companies helmed by women in the Nordics, where funding for female-led startups has dropped significantly.?

“It is demoralising to see corporations hiring one or two people in their Diversity, Equality, and Inclusion (DEI) teams, where their role is restricted to marketing. They are provided no budget to exert any influence on inequalities with an action-oriented approach,” she stated.

Lindtvedt added that Nordic networks tend to be small and male-dominated and are characterised by an exclusionary environment, but that “there are unfortunately no consequences to actions in the Nordics”.

Building Ethical Standards into Decision-Making

Kugathasan, who works at SimCorp–a Danish organisation that provides investment management software to large banks and insurance companies to help them make better decisions–noted that eliminating bias altogether is unlikely.?

“People build software and algorithms, which means that bias can leak into any software,” he shared, but noted that resource investments could work towards mitigating those biases.?

At SimCorp, Kugathasan’s team works with its product division department to increase awareness and mitigate bias. “We need to build for long-term social well-being over short-term profit. One way to do this is stronger regulatory frameworks that enforce ethical standards and promote inclusive data collection that reflects diverse communities,” he stressed.

Inclusivity at Oslo Innovation Week

“Oslo Innovation Week closes with the Diversify Nordics Summit, and it is one of the most important events,” shared Miskin, whose role in the ecosystem is to help build international networks for startups and investors in Oslo. To this end, he works closely with various stakeholders, including founders, venture capitalists, corporations, and government officials to bring more international talent and investments to the Norwegian capital.

“Venture capitalists investing in female-led companies is still way off where it should be,” he said, drawing comparisons among the startup ecosystems within the Nordics. For example, he shared how the Oslo ecosystem represents a bubble, where many believe that things are changing in the absence of tangible proof.?

To be more action-orientated, Miskin shared that it was time to look outside this bubble and take responsibility. “At Oslo Innovation Week, for example, we included a mandatory diversity workshop in collaboration with Diversify for our 200 partners hosting events during the week.”?

Is the VC market in the Nordics ready for real change??

The kind of change that sees minorities in decision-making positions? Or, the kind that accounts for ethnicity when measuring gender inequalities???

Lindtvedt is not too optimistic.

“Corporations only care about one thing: profits,” she maintained.?

Perhaps time will be the only litmus test.