2013 was a bumper year for Nordic startups, with a record 179 investments made in startups from the region, totalling just over €500m.
Thanks in part to Spotify's $250m (€183m) round led by Silicon Valley's TCV late last year, Swedish startups soaked up about 67 percent of funding in the Nordics in 2013 totalling €335 million — more than the entire region attracted in 2012, according to numbers compiled by Swedish VC firm Creandum.
While entrepreneurship hasn't always been admired in Sweden, in recent years the nation has produced more than its fair share of startup stars, building on earlier successes such as MySQL. Besides Spotify, other standouts include online payments firm Klarna, VoiP company Rebtel, card payments startup iZettle (which last week landed $55m in a series C round), and eye-tracking business Tobii.
While Sweden's startups took the lion's share of total investment, Norway took €32m, €79m went to Finland, and Denmark notched up €55m.
The volume of deals was spread fairly evenly between the Nordic countries. Llast year, there were 69 deals for Swedish startups, 50 for Denmark's, and 42 in Finland, while Norway's younger startup scene drew 18. The total number of investments across the region climbed from 135 in 2012 to 179 in 2013.
One lowlight for the Nordic startup scene is that 60 percent of the investments were seed or angel investments, typically valued between €0.1m and €1m. In other words, gaining follow-up funding appears to be just as tough for startups in the Nordics as it is elsewhere in Europe. According to Creandum, the number of series A rounds was flat last year at 48, while series B rounds climbed from 14 in 2012 to 20 in 2013.
Despite this, Creandum points out that Nordic startups raised 60 percent more capital in 2013 than the €310m they landed in 2012.
So, besides cold, dark winters and plenty of time to contemplate big dreams, what makes the notoriously expensive and isolated region a good place to launch startups?
According to Creandum's Lasse Pilgaard, the growth of startup communities are helping entrepreneurs network, there's a growing number of startup accelerators in the region, and access to local and international venture capital funds has improved.
One example is Northzone's €150m VII fund — launched late last year with backing from a Swedish pension fund — targeting startups with "Nordic roots".