Insights

Nordic highlights from August / summer of 2018.

August marks the start of people slowly getting back to the usual business in the Nordics and this is exactly reflected in the investment and M&A activity in the region.

- specifically, we tracked 68 investment deals for August 2018, which is almost at the same level as 2017 (72) but way lower than the exactly 100 capital rounds from 2016.

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August 2018

- however, last month we had almost twice as many later stage deals (i.e. $10M+) than in August 2017 (9 vs 5) which justifies the $100M extra in absolut value capital invested in August 2018.

- if the investment pace keeps up in September, then the absolute capital value for Q3 in 2018 has a good chance to be the highest in the past years, passing the $616M threshold from Q3 of 2016, which is the highest from all the Q3s recorded in our database (we cover data as back as 2004ish). Q3 2018 is roughly $60M worth of investment away from being the highest.

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- all in all this summer (June+July+August) kind of reflects the general investment trend of 2018 in Scandinavia, meaning fewer early stage deals and more later stage, justifying an investment dollar amount higher than ever in the Nordics countries

  2018 2017
  # of deals $ value # of deals $ value
June 83 258M 93 273M
July 45 180M 69 115M
August 68 234M 73 135M
TOTAL 196 672M 235 523M

 

- another interesting metric supporting the same observation is the ratio of early stage (<$1M) vs late stage (>1M) - it reversed in the first 8 months of 2018 vs same period in 2017

# of deals <$1M : >$1M (2018) <$1M : >$1M (2017) undisclosed value (2018 : 2017)
Jan-Aug 193 : 278 299 : 266 113 : 133


- getting back to August 2018, as expected Sweden is in the driving seat, with 68 rounds, more than double the deals than the rest of the Nordic countries in total. Almost the same situation in the case of the absolute values, skewed by the $41M round taken by the Danish Planday.

- other than Planday, top dollars was raised by Kolonial ($24M), Babyshop ($18M), Visiopharm ($15M), Apica ($13M), Simple Feast ($12M), Karma ($12M), Readly ($11M) and MaaS Global ($10M)

- other interesting deals: Miss Group ($8M - Swedes operating from UK and Sweden), Hem ($5M), Lysa ($4M), Awake ($3M), Dogu ($2M)

- top institutional investors in August: Almi (5), Kinnevik, Industrifonden, Ernströmgruppen, Verdane Capital, Norrsken Foundation, Schibsted, Pre-SEED Ventures, Wave Ventures and InQvation, all with two each.

- no angel had recorded more than one deal in August 2018.

- all data, graphs and tables, with advanced query options available here for investors, here for investments and here for country analysis


Other observations from the Nordic summer

- In Norway there is a bitcoin mining company - New Mining Company - which was recently visited by the police. One of the assumptions is that the company has Russian political connections and the visit was correlated to some NATO exercises from Norway - link

- Speaking of blockchain companies, Superblock from Sweden was involved in a smart marketing campaign just before the kick off of the football world cup: Marriage Unblocked. It's a website where couples can marry regardless of sexual orientation, by incorporating the digital marriage for a symbolic certificate, even if the marriage is not recognized by the respective countries. The campaign was initiated by the clothing brand Björn Borg.

- Do VCs really add value?  Founders say sometimes. Truth is, like any place else, it's probably the 80/20 rule and is subject to the expectations. Also keep in mind that top VC houses from around here employ consultants/generalists rather than doers, with experience in the field. The reason is simple - there's not too many doers available as (tech) entrepreneurship is stil a new genre in Scandinavia.

- Why ecommerce operations and DTC biz in general are very well sought after by investors - today online shopping in Sweden accounts for just 9% of the total retail trade, but 80% of the growth in retail is through online shopping. If e-commerce continues to develop at the same rate, in five years it will have doubled. Clothing and shoes account for the largest percentage of online purchases being 37% of total e-commerce. In 2017, e-commerce in Sweden reached SEK 67 billion - an increase of 17%. link

- Really cool: Iceland expands food delivery by drone in Reykjavik - link

- Google cars measure Copenhagen air pollution - link

- Heini Zachariassen, one of the founders of Vivino, who stepped down this summer, launched a YT channel, Raw Startup, with handy advice for newbies entrepreneurs. Useful.

- Norwegian court orders volunteers to take down public domain court verdicts and pay copyright troll's legal bills. Håkon Wium Lie, the CSS inventor, joined forces with the volunteers behind rettspraksis.no to create a free, public repository of Norwegian court decisions. A Norwegian judge disagreed - the story is really unbelievable, over at boingboing and techdirt

- Amazon paid €600,000 for the domain amazon.se. Still no public announcement when Amazon is actually going to officially launch in Scandi, media speculated that just before Xmas could be an appropiate date. All in all, ecommerce in Scandi is expensive for consumers and badly needs competition. link

- Speaking of Amazon, it intends to provide free ofice space downtown Stockholm. Nice PR.

- Snapchat set up a company in Sweden

- Facebook paid SEK 6.9M ($800k) in taxes in Sweden in 2017, an increase from the 2.5 million in the previous year. The corporate tax in Sweden is 22 per cent.

- Uber paid SEK 1.2M.

- In contrast, King, the gaming company, paid SEK 445M. Life is not fair.

- It looks like the Swedish state subsidies for purchasing electric bikes were subject to fraud. About SEK 1M.

- The largest bank in the Nordic region, Nordea, decided to exclude Facebook from media plans, after the Cambridge Analytica scandal:

"The investigations have revealed a lack of accountability over data security/data sharing infrastructure of the platform, lack of transparancy and a reactive behavior combined with increased scrutiny from regulators and stakeholders."

- Meanwhile, Danske Bank is in a bit of a pickle over an investigation for laundering money through its Estonian branch for payments of about €200bn. It's so serious that the big boss just resigned - link

- The Swedes have created a startup manifesto promoting the country to become the best startup country in the world and the Danish made The Copenhagen Catalog with 150 principles created by 150 humans in 48 hours at Copenhagen Techfestival

- Netflix made a pop-up event in Stockholm, by recreating Friends, Stranger Things and Gilmore Girls atmoshpere.

- One of Sweden’s leading train operators is trialling an augmented reality app to help passengers navigate through Stockholm's main train station. The app uses augmented reality to help passengers navigate to their platform. Passengers simply have to download the app, scan a QR code, input their desired destination and open their smartphone’s camera, which will then show them a number of super-imposed digital pointers guiding them to their destination, along with key additional information along the way. Link

- EQT has launched EQT Access, an intranet tool connecting their portfolio companies with enterprises. You know, a knowledge platform in a business that sells knowledge on top of money. Hopefully it will be more useful for startups than the EQT Together, which they created just to populate their investment leads database.

- A Finnish island is used as a place for an exclusive networking event - SuperShe - that has banned men, and only accepts heavily vetted women. The price, wait for it, it's 4000 euros and includes self-help tools that can lead participants down a different career path, as well as cognitive training to expel any negative thoughts. Guests dine on homemade coconut yogurt and salmon smoked over a fire pit on the beach. Instructors lead workouts, yoga classes and kayaking. The conversation touches on things like figuring out your cash flow and running a successful business. Story

- Breakit, a Swedish (new) media outlet, kept trolling H&M this summer (which had a surprisingly weak PR,) sometimes without substance such as this. Rumour is that Stefan Persson, who owns 40% of the busines and is the CEO's father, wants to delist the company from the stock exchange, which is not such a bad idea if H&M develops and executes an impecable online strategy. Amazon is knocking at the door in the Nordics.

- If you follow N9 you may have learnt that Odense is a Danish robotics hub. Keep an eye on OnRobot, founded by Enrico Krog Iversen, which merged three companies, raised money and bought another robotics company from Odense. All this summer. Enrico did it once with Universal Robot, which was acquired by American strategic investors for $285M in 2015.

- Uber returns to Finland after a change to strict transport laws - link

- Pär-Jörgen Pärson of Northzone fame, recently awarded as European VC of the year at an UK tech gathering, is (or rather was a few weeks ago) looking to hire a chief of staff, an unusual position in Europe but very popular in VC/hot startups circles in US, which basically is some sort of a personal assistant. link

- Volvo launches M, a service that will provide on-demand access to cars and services through an app. Really like the idea.

- Spotify launched an experiment in Australia allowing users on its free, ad-supported tier to skip ads. It only charges advertisers if their ad is completed. The aim is to collect more feedback on which consumers like which ads so they can be better produced and better targeted. link

- Norwegians were upset with Tesla, Elon answered - story

- Aifloo went bankrupt after spending almost $10M of VC money, having raised from EQT Ventures and Länsförsäkringar.

- Drivenow, BMW's car service company, also closed operations, but just in Stockholm/Nordics. The company was a contender to Volvo, which dominates the Sweden market, but never got to the scale that would justify a sustainable economic model.

- Ikea is planning to open a network of smaller branches on the high streets of the UK, where users will be able to select from a slightly limited range of furniture and won't have the fun of controlling a massive trolley in places where it looks like members of the public shouldn't be allowed. The first such branch is planned for Tottenham Court Road in London link

- Limebike spotted in Copenhagen. In the meantime a local Swedish startup, Voi, is testing the waters with a similar business in Stockholm. Raised $1M.

- During the period January-July 2018, In Sweden 3953 companies went bankrupt, compared with 3617 corresponding period last year.

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