Startup guides Sweden 🇸🇪

what you need to know about startup funding in Sweden

Jan 27, 2023

Hey there,

We have produced our second country guide - for startup founders from Sweden, which you can find below.

Kind reminder, we already have created one for 🇩🇪 Germany (we got great feedback on it), and have in the works France, Spain and the UK. Which one should we publish first? 😊

Hope you find it useful, please let me know if you have questions or comments.

Thanks,
Dragos

🇸🇪 Sweden

Known for startup unicorns doing music streaming (Spotify), consumer credit (Klarna), food (Oatly) or energy (Northvolt).

💪 #4 VC-funded startups country in Europe in 2022

532 startups (655 in 2021) secured funds of $5.8 billion ($10.6bn in 2021)
323 startups raised at the <$5M level (400 in 2021)
404 active angel investors (430 in 2021)
90 active VCs (98 in 2021)

🏁 Active Investors

Angels

VCs

Non-Swedish investors

Alliance Venture (Norway)
Atomico (UK)
Cherry Ventures (Germany)
GFC (Germany)
Heartcore (Denmark)
Icebreaker (Finland)
Inventure (Finland)
Northzone (Norway)
Peak Capital (Netherlands)
Schibsted Ventures (Norway)

Other active investors

☁️ Opportunities

Stockholm is the place to be in Sweden. Top three cities where startups got funded in 2022: Stockholm (370 deals/$5.1bn), Gothenburg (48 deals/$358M), Malmö (25 deals/$166M).
Gothenburg and Malmö together with Lund combine into a big startup hub, considering the proximity of Copenhagen, just across the Øresund strait.
Swedish startups get accelerated locally or by Americans. Startup accelerators Swedish startups go to: Chalmers (Sweden), Sting (Sweden), Antler (Singapore), Y Combinator (USA), Techstars (USA).
Other local startup accelerators: KTH, SU, Fast Track Malmö, Arctic Business Incubator, SmiLe, SynerLeap, Tinc.
Swedish startups part of Y Combinator: Depict, GetAccept, Heart Aerospace, Castle. There’s more than 10 of them - talk to those founders and ask them about their experience.
Swedish Superfounders: Daniel Ek (Spotify), Emil Eifrém (Neo4j), Jacob de Geer (Zettle), Joachim Hedenius (Scapin), Alex Ljung (Dance), Sebastian Siemiatkowski (Klarna), Eric Wahlforss (Dance), Hjalmar Winbladh (Ark Capital).
State funding programs: Almi Invest, Business Sweden, Invest Stockholm, Tillväxtverket, Vinnova.
Tech startups raising the most - industries most Swedish startups raised money in 2022: software (SAAS), manufacturing, e-commerce, marketplaces, health, finance, energy.
Investors say they’re interested in:
- startups doing climate and health technology.
- in general, anything related to making impact - Nordic people are among the more environment/society conscious in Europe.
- fintech - there’s arguably more fintech startups than needed in Sweden already, but there’s a good tradition for innovating in the local financial services.
- startups going global from day 1
- don't forget about investors’ new obsession ChatGPT - if your startup is by any means using machine learning, add AI/ChatGPT in your opening and make your pitch all about it

That means they would like to find this kind of startups - if you have an investable project you should be ok too. 😊

🔮 Also notable

Sweden’s startup scene has grown fast since 2013-2015, when rich families that run the Swedish society have turned their attention from real estate or industrial investments to tech startups. At that time there was just a handful of VCs active in all the Nordic countries, that number 10X-ed now.
Great exit stories and money/knowledge recycled back into the ecosystem helped tremendously in shaping one of today’s better startup ecosystems in Europe. Compared to other European countries, it is more mature with a good number of startup experience people - alas, it is also a small country, with higher density in just a few hubs.
Add to that a low level of bureaucracy, where everybody is more relaxed, casual and speaks English. People are helpful, in spite of generally doing business in closed circles excluding outsiders or foreigners by default. However, like in any place, if you are persistent, mindful to the culture and the way business is conducted, you will be able to join local networks and contribute.
The government has been always supportive of the startup development through diverse programs, schemes and grants. They are the low hanging fruits that should help kick off things for any startup founder. On the other hand, accessing bank loans can be challenging, as banks usually are not equipped to deal with and understand startups - in general, doing business with Swedish banks can be very expensive and difficult.
Known problems The personnel stock option schemes are unfavourable for startups and startup visas are also a bottleneck, making it difficult for startups to hire competent personnel, particularly at the top management level. There’s frequent cases of tech startup people kicked out of the country because of visa problems, sometimes beyond the common sense or because of bureaucratic errors. That being said, don’t lose hope and keep going if you come across any hurdles, in general people behave in good faith and things will work out.
The startup events scene - in the past years, the only regular tech meet-up capturing the startup zeitgeist was organised by an American living in Thailand. Other good ones, with a local focus though: Sthlm Fintech Week, Sweden Food Tech, Sweden Innovation Days, Gothenburg Tech Week, Nordic Demo Day, UPPSTART, Future of Tech. Local startup people usually go to Slush in Finland, one of the better events in Europe.
Sweden is a great place to build a global startup from day 1. The alternative is to do something local for a small closed market, with little chances of good returns to professional investors, as the exit option is likely selling to the local family-run businesses that control most of the Swedish economy.
Having international ambitions can benefit you from a fairly good pool of people with experience in the startup world, both as investors and as founders. Add that the local competition is low as people find it hard to switch from a safe job to a risky, low paying gig - that is why, at the Swedish society level, building tech startups is considered to be an exotic choice, taken by rich families kids or immigrants. If you do it right and get advice from the right people, chances are in your favour.
There’s also a great number of newly minted funds and venture money chasing these ideas - if you’re doing something interesting, chances are they will find you and reach out.
As always, the trick is to build an investable startup that’s attractive for what they’re looking for. It’s what we help founders with at Project Arrow.

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