2020 turned out very different for most of us. Like the rest of the world, the Nordics have faced enormous challenges because of the coronavirus pandemic. Even though we are talking about opening our societies, I dare to say that infection control measures will be in place well into 2021. That means uncertainty over when we can go back to ‘a normal’ where we are able to see people that we care about, eat at a restaurant or travel to a new country, or work from our office. Private equity is well-suited for uncertain times where businesses need to turn around fast, to limit lay-offs and financial losses, but also see opportunities amidst the challenges.
We have spoken to a range of Nordic companies backed by private equity funds about how they have handled the crisis. Confrere, a Norwegian provider of video consultation software to doctors, saw a hundredfold increase in usage in the second half of March. The company was able to grow from 10 to 25 employees during the year, attracting people that were laid-off or out of job. MatHem is the largest online grocery store in Sweden and had a massive increase in its user base, with new age groups trying out their service. Because of limited capacity, the company created priority queues for struggling groups. Trondheim-based Signicat creates software for digital identity management and electronic signatures, making us able to do payments and log on to public services smoothly. This has been integral during the pandemic, when we have needed to live our lives digitally.
Despite the pandemic, 2020 saw a record high number of venture capital deals in the Nordic region, and the invested amount increased for the third straight year (read more). Over half of all venture deals were directed to technology companies, as tech-enabled services were popular during the pandemic. In addition, there was a 40 per cent increase in health care and life sciences deals. The pandemic has highlighted the importance of biotech and innovative health solutions, and fund managers regard the industry as attractive. Read our interview with EQT Ventures’ Ali Mitchell about the pandemic’s effect on VCs, Nordic start-ups that seek to enter the US market, and how it has led big players to get bigger – and the smaller ones in a squeeze.
In the buyout segment, investors flocked to companies that were not too affected by the pandemic. Technology companies attracted 39 per cent of all deals, making it the largest sector for the first time in Argentum’s tracking of the market. Read our interview with Eivind Roald, head of QNTM Group set up by Altor, which aims to create Europe’s largest ecosystem of ICT companies. Fundraising in the buyout segment reached new heights during the pandemic, raising €26 billion in total. Read more about the three large-cap funds that led the way.
Lastly, I would like to thank everyone who shared their insight and contributed to the report. I hope you think it is an insightful and enjoyable read.