Signs of positive trends in somewhat gloomy startup market

“Since the war in Ukraine started, the Nordic venture market has followed the falling global statistics with a lag of maybe six months. In the third quarter of 2023 several indicators globally and also at the European level indicated that we had hit bottom and might see a slow recovery. Also some later stage equity deals have been made during November and December,” explains Vesa Riihimäki. 

“Debt financing from Nordea was in strong demand during the year and we have not seen slowdown with same pace as equity market has come down. The venture debt market has declined at roughly the same pace as the equity market – that is understandable since venture debt is typically three or four times more expensive compared with Nordea’s debt solutions. The fundraising of venture funds has been difficult throughout the year, especially after the summer. Nordea was active in Finland as a limited partner in the first half of the year and during second half we started our new global venture vehicle investing in VC funds,” he adds. 

Norway a winner

According to Atomico’s State of European Tech report Norway was one of this year’s winners measured by the share of total capital invested in Europe per country. How did the market look like from the inside? 

“The equity market in Norway is not dead, but we see less investment activity from the VCs on new cases. Their main focus is supporting and adding on capital in their existing portfolio companies. Interest from foreign VCs is still very high and Norway is an attractive market especially for VCs looking for SaaS (software as a service ), business-to-business cases and deep tech cases with international scaling potential, says Håvard Lindtvedt. 

Vesa and Håvard both believe that the biggest decline after the boom years 2020-2021 is over and expect 2024 to be better than 2023. Moreover, this year Europe is still the only region globally where the long-term growth of the venture capital market has not flattened out, according to Atomico’s study. 

More diverse funnel

From Nordea’s side our Startup & Growth units continue to help Nordic startups and growth companies and investors all around the world find each other. Our Nordea Investor Speed Dating events helped bring together more than 150 Nordic startups and 240 investors during 2023. Teija Nousiainen highlights a couple of trends from the meetings. 

“During 2023 we hosted 550 1-to-1 meetings between Nordic founders and investors all around the world at our speed date events. This year we saw a decline in the average round sizes of companies in seed and A-rounds. Investors were especially interested to meet companies in the climate and energy space.” 

“This year we also broke records in terms of the number of female founders/mixed teams attending the Investor Speed Dating events. During the autumn we organised events for companies raising their A-round and at Slush event for B/C round companies, and at both of these events over 30% of the companies that participated were founded by women or had women in their founding teams. The funnel from the Nordics seems to be getting better in respect of diversity in the teams,” she concludes.