swedish tech funding report q1-q2 2017 - industrifonden · swedish tech funding report q1-q2 2017....
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Swedish Tech Funding
Report Q1-Q2 2017
Industrifonden is a Nordic evergreen venture capital investor with $500M in
assets, partnering with early-stage tech and life science companies with
international potential. Industrifonden-backed companies include Qlik, Arcam,
Soundtrack Your Brand, Fishbrain, Qapital and Funnel
#swedishtechreport
@Industrifonden
www.Industrifonden.com
3
Disrupted bankers and digitized doctors –2017 keeps the fire burningIn the first half of 2017 we experienced a continuedgrowth in deployed capital, while last year’s strongincrease in number of deals leveled off. This wasprimarily driven by a slight decrease in seed rounds andan uptick in Series A and B rounds.
Interestingly, despite the continued growth of investedcapital and the upwards shift of round sizes, the share offunding rounds with participation from internationalinvestors decreased to 15%. This is the lowest sharesince we started this tracking and points to a strongdomestic funding climate, even for bigger size ticketsbeyond Series A rounds. Of the international investorsthat did invest in Sweden, UK investors were the mostbullish and claimed the top spot for the first time, racingpast their American peers.
Just like in previous years, the most popular sector forventure funding was FinTech which cemented its positionin the top. More interesting to note, however, was thisyear’s runner-up sector Digital Health, which has risenfrom being virtually non-existent just a few years ago tonow gaining massive interest. This was manifested in Q1through AMRA’s $9M funding from investors includingPfizer Ventures, Industrifonden and Novo Nordisk, and in
Q2 by Kry and MinDoktor’s $20M+ rounds from investorsincluding Accel, Index Ventures and EQT Ventures.
To peg companies up for coming growth rounds, angelinvestors remain crucial to the ecosystem and in thisedition we have taken a closer look into the space. Ananalysis of the 20 most active angel investors in Swedenreveals that there is plenty of smart money to go around,as a vast majority of the investors are former founders.Together they are bringing experience from raisingmassive VC rounds and creating a combined $15+ billionin exit value.
OVERVIEW
222Funding rounds (Q3-Q4 2016: 224)
$560M(SEK 4.9B) raised (Q3-Q4 2016: $390M)
KEY FIGURES
340Active investors (Q3-Q4 2016: 349)
Björn Bergström
Tech Investor
Industrifonden
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Stabilized levels in number of rounds –continued increase in invested capital
INVESTMENT ACTIVITY
Note: The outlier adjusted graph excludes Spotify’s funding rounds in Q2 2015 and Q1 2016 to provide a more comparable trend line than the total investment graph
$M $M$M Deal count
102
700
233
104
1110
134179 211
277 281
0
200
400
600
800
1000
1200
Q12015
Q22015
Q32015
Q42015
Q12016
Q22016
Q32016
Q42016
Q12017
Q22017
Total investment*
102
169
233
104117
134
179
211
277 281
0
50
100
150
200
250
300
Q12015
Q22015
Q32015
Q42015
Q12016
Q22016
Q32016
Q42016
Q12017
Q22017
Total investment, outlier adjusted*
1,51,4
0,8 0,70,7 0,7
1,2
0,8
1 1
0
20
40
60
80
100
120
140
0
1
2
Q12015
Q22015
Q32015
Q42015
Q12016
Q22016
Q32016
Q42016
Q12017
Q22017
Median deal size Deal count
5
INVESTMENT ACTIVITY
Early stage has stabilized after previous years’ explosive growth – later stage sees slight increase
811
2 1
19
15
6
2
26
10
4 3
32
20
1 1
41
29
41
62
27
4
4240
9
61
47
9
1
50
44
12
1
4543
10
1
0
10
20
30
40
50
60
70
<$1M $1.1-5M $5.1-25M >$25M
2015 - Q1 2015 - Q2 2015 - Q3 2015 - Q4 2016 - Q1 2016 - Q2 2016 - Q3 2016 - Q4 2017 - Q1 2017 - Q2
Deal count
Deal size
00
6
INVESTOR ACTIVITY
-3%Change in active investors Q1-Q2 2017 compared to
Q3-Q4 2016
15%Of the active investors participated in at least two
funding rounds during Q1-Q2 2017
105
146
310
349 340
0
50
100
150
200
250
300
350
400
Q1-Q2 2015 Q3-Q4 2015 Q1-Q2 2016 Q3-Q4 2016 Q1-Q2 2017
Active investors
7
Angel investors and VCs remain most active backers of tech startups
Investor type by
% of deals
Q1-Q2 2017
INVESTOR ACTIVITY
37%
47%51%
29%
60%
20%
56%
23%
56%
20%
0%
25%
50%
75%
100%
Angel investors VC
Share of deal count by investor type
Q1-Q2 2015 Q3-Q4 2015 Q1-Q2 2016 Q3-Q4 2016 Q1-Q2 2017
56%
20%
12%
6%
3% 3%
Angel
VC
Investment firm, other
Corporation
Corporate VC
Accelerator
8
FOREIGN INVESTMENT ACTIVITY
Domestic investors continue to dominate funding rounds
42%
25%
18%21%
15%
0%
25%
50%
75%
100%
Q1-Q2 2015 Q3-Q4 2015 Q1-Q2 2016 Q3-Q4 2016 Q1-Q2 2017
Funding rounds with foreign participation (%)
2927
32
47
33
Q1-Q2 2015 Q3-Q4 2015 Q1-Q2 2016 Q3-Q4 2016 Q1-Q2 2017
Funding rounds with foreign participation (count)
9
FOREIGN INVESTMENT ACTIVITY
…even beyond seed stage where foreign investors typically enter
5%
16%
45%
100%
0
10
20
30
40
50
60
70
80
90
100
0%
25%
50%
75%
100%
≤$1M $1.1 - 5M $5.1 - 25M >$25M
Foreign participation % Total deal count
Deals with foreign
participation (%)Deal count
10
While overall foreign investment slowed, UK investors claimed top spot after doubling their share
FOREIGN INVESTMENT ACTIVITY
33%
25%
19%
10%
7%
6%
Foreign participation 2015
USA
UK
RoW
Germany
Finland
Denmark
29%
18%
18%
10%
9%
7%
6%4%
Foreign participation 2016
USA
UK
Rest of World
Denmark
Germany
Norway
Finland
China
38%
18%8%
8%
6%
6%
4%4%
4% 4%
Foreign participation Q1-Q2 2017
UK
USA
Norway
Rest of World
Denmark
Finland
Netherlands
Germany
Spain
Iceland
11
VERTICALS
Top 2 verticals by deal count
FinTech
13%
Digital Health
10%
FinTech remained hottest sector, while Digital Health claimed the runner up position for the first time
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FUNDRAISING TRENDS
The rundown on Sweden’s most active angel investors Q1-Q2 2017
Executives
10%
In the spotlight: Top 20 angel investors
3Average no. of investments during
Q1-Q2 2017
60%
Founders
Professional backgroundInvestment data
Artists & Athletes
Educational background
65%
30%
5%
Tech / Engineering
Business
Other
Previous achievements
$15B+Total realized exit value during the angel
investors’ active operational careers
30%
35%Have founded a VC-backed company
35%Of the top 20 angel investors also
featured in the top 20 in 2016 and / or
2015
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METHODOLOGY
What’s included• This report covers disclosed venture investments in
Swedish private tech companies
• Analysis primarily based on proprietary database with 600+
funding rounds
• Both first-time and follow-on investments are included
• Deals are tracked in SEK but reported here in USD. If
originally reported in other currencies, conversion is based
upon exchange rate per date of disclosure. Aggregate
figures are subject to change due to currency fluctuation
What’s not included• Investments in life science, med tech, bio tech, retail,
and consulting
• Secondary transactions, investments in subsidiaries and
M&A transactions
• Equity crowdfunding and investments in public
companies of any kind, including listing rounds in
conjunction with IPO’s
• Grants, bonds, bank loans and any other types of
funding that is not intended to result in ownership
An end-note to keep our lawyers happy: The information contained in this report has not been independently verified as to its accuracy. No representation or warranty, express or implied, is given by Industrifonden or any of its
directors, partners, officers, affiliates, employees, advisers or agents as to the accuracy or completeness of the contents of this report or any other document or information supplied or any opinions or projections expressed
herein or therein, nor is any such party under any obligation to update the report or correct any inaccuracies or omissions in it which may exist or become apparent.
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