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2016 is looking like a good year in Nordic investments

While equity round activity has been slowing down in the UK, in the Nordics activity in 2016 already surpassed 2014 and 2015 combined.

In my previous blog post, I wrote about the slowdown in equity rounds in the UK. While things are slowing down in Europe’s biggest equity crowdfunding market, new numbers collected by investment news website the Nordic Web point to an opposite trend in the Nordics. With ten weeks remaining in the year, 2016 surpassed 2014 and 2015 combined in the number of equity rounds.

According to the Nordic Web, in 2014 and 2015 there were in total 512 investments, whereas there have already been 578 in 2016. The year-on-year growth in Nordic investments is quite impressive as there were 176 rounds in 2014, 336 in 2015 (90.9% growth), and a projected 653 in 2016 (94.3% growth). This year’s growth was largely driven by a sprint in Q3 and Q4, as back in May the site was reporting a plateauing in the rate of investment in the Nordics.

Unlike the UK numbers from the research house Beauhurst covered in my previous blog post, the Nordic Web doesn’t segment the investments by channel, so no direct growth numbers for equity crowdfunded rounds can be inferred. However, it is reassuring for Nordic entrepreneurs that the slowdown trend seen in the UK has not reached the region. The Nordic Web does warn that despite the good streak there have been enough warning signs in 2016 to indicate that the streak probably won’t continue for too long.

Whereas Beauhurst’s report highlighted a possible re-emergence of the dreaded equity gap (investors moving to bigger ticket sizes which creates a vacuum in funding available for smaller companies), the Nordic Web’s seems to point in the opposite direction. It seems that the large funding rounds are becoming increasingly rare in the Nordics and that the growth in investment numbers stems mainly from the seed and pre-seed stages. There is money available for bigger rounds too, but the problem might lie in seed-funded businesses not being good enough for the bigger follow-on investments. Time will tell whether this is a real problem or simply a side effect of short time series data.

Still, no matter which way you look at it, growing numbers of investments in the Nordics is certainly good news.

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Tagged: Points of view, market analysis, nordic, nordic web

Mikko Savolainen

Written by Mikko Savolainen

Head of marketing at Invesdor