Tech companies keep the Nordic PE ship afloat
After a weak start to the year for the Nordic venture segment, the number of deals picked up sharply in the third quarter. The investment volume is like in an average year, while there is an increase of 121 per cent in the amount invested (read more). A clear trend is that one in five venture deals involve health companies, an increase of 46 per cent. In general, health and life science seem to have done well in Europe during the pandemic. Nonetheless, technology is still the most popular sector in the Nordic venture, and the region became home to the highest valued fintech company in Europe when Klarna raised 650 million dollars in its latest financing round in September (see also large venture transactions).
For the Nordic buyout industry, the arrows have pointed downwards so far this year: the number of deals is down 27 per cent and the amount invested is down 17 per cent (read more). We saw an upswing in the activity in the third quarter, driven by some significant individual transactions in the tech sector, including Visma which was acquired by the British PE fund Hg, and IFS which was acquired by EQT and TA Associates. In 2020, ICT has been the most popular sector in the buyout segment, with a deal share of 43 per cent (read more).
If we look at fundraising, Nordic venture funds expect to land around 1.5 billion euros in 2020, which will be an above-average year. Nordic buyout funds have already raised 11 billion euros this year, and we expect that they will have closed funds with a value close to 30 billion by the end of the year. If they succeed, 2020 will be a new record year for fundraising in the Norwegian buyout segment. The coronavirus pandemic will naturally affect the ability of funds to close during the fourth quarter.
The number of PE-backed exits is down so far in 2020, both in the venture and buyout segment, a drop of 45 and 46 per cent respectively (read more). The uncertainty that we have seen so far this year has affected the willingness to take risks and has affected pricing in a negative direction, which makes both investor and vendor await the situation until the market becomes more predictable. A trend that stands out in the period is a large number of IPOs of PE-supported companies, including BEWi and Readly (read more).