The Nordic private venture investments in the first quarter of 2020
We had a quick look at the intermediate numbers of the investment deals tracked for Q1 of 2020 in startups based in the Nordic countries.
In a nutshell: we are at about the same absolute value number ($1.1bn-ish) and at 60% of the dealflow level of 2019, 166 vs 270 investments tracked to the date of writing this.
A few observations:
- We expect that the deal number gap will narrow down as we gradually catch up with all the deals closed in the quarter. There's usually a lag of a few months until we get to make all the updates.
- Having said this, these days crisis situation didn't seem to affect too much the March dealflow (51 vs 83), most likely the deals announced have been in the works for a couple months.
- Also interesting, comparing 2020 with 2019, the month to month delta in the number of deals seems to follow the same pattern - went down 20ish% in february and stayed within the same levels in March mom. To make it fun, we also looked at 2018's numbers, which follow almost the same pattern (see the graphs below).
- It is likely that in the following 2 quarters the numbers will be bad though. The world economy is paralysed, there's no healthcare resolution in sight yet and the pre-summer deals are supposed to be worked out these days. The summer days are usually slow anyways in the Nordics.
- I would expect that the preseed and seed activity to be most affected as this would require an initial GTM process which is challenging to be done virtually only.
- There may be follow-on investments (i.e. in the $1-10M range) as i) it is a small ecosystem and everybody knows everybody, and ii) there are some good deals to be made in spite of the market volatility.
- Fwiw in 2019 + 2018 there were 165 companies having raised at <$1M levels and 143 involved in $1-5M deals - at least some of those guys presumably are looking to graduate.
- The investment value level of the first quarter of 2020 is 10% less in spite of a 40% discrepancy in the deals number. This is explained by the month of January when we recorded 4 deals of $50M+. For a little context, the year 2019 had a total of 13 deals at $50M+.
- In terms of value though, 2019 and 2020's first quarters were stronger than 2018 as we saw more follow-on investments at later stages levels ($10M+ deals). Please note that early stage deals (i.e. less than $1M) we roughly at a similar level in 2019 and 2018.