6. Venture fundraising: Several small funds closed during the year
Following a record-breaking fundraising year in 2019, last year proved to be more challenging for Nordic venture fund managers.
“Fundraising is cyclical, with high amounts in some years and lower in subsequent years. As expected, the pandemic affected many funds’ ability to close during the fourth quarter of 2020. Now, we can look forward to another solid fundraising year in 2021,” says Ingibjörg Meyer-Myklestad, Head of Corporate Affairs at Argentum.
Nordic venture funds raised €906 million in 2020, a decrease of 64 per cent from the record level in 2019. The lack of sizeable later-stage venture funds is the main reason for the total reduction from 2019. Instead, the funds closed in 2020 were relatively similar, with no closings larger than €100 million. For comparison, in 2019, four funds raised more than €200 million each.
In total, there were 24 fund closings in 2020, a slight increase from 2019 (17), 2018 (16), and 2017 (19). Despite the sharp reduction from 2019, only three of the last ten years experienced higher fundraising levels than 2020 (see graph below).
Cyclical fundraising: As the graph shows, the astonishing fundraising levels in 2016 and 2019 influences the average. The outlook for VC fundraising in 2021 is hopeful.
A range of new funds closed
Among the established fund managers, Norway-based Alliance Venture had a first close on its fourth fund called Delta, and Skagerak Maturo had a first close on its fifth fund. In Denmark, SEED Capital had a first close for its fourth fund. In Finland, CapMan did a first close of its second growth fund, and Icebreaker.vc had a first close for its second fund.
A range of managers with their first fund closed during last year. Among them were J12, which focuses on “tech companies with large ambitions,” and the EdTech fund Sparkmind. The Swedish life science fund Eir launched in July. Two new climate-focused investors also closed: Sweden-based Blue Dot had its first close in June, and the Norwegian state-owned climate investor Nysnø made the fourth close.
Top 10 largest closings in 2020 by Nordic venture funds
| Fund name | Fund manager | Home country | Amount raised in closing (€m) | Close |
|---|---|---|---|---|
| CapMan | Growth II | Finland | 85 | First |
| Eir Ventures | Eir Ventures I | Sweden | 76 | First |
| Nysnø | Nysnø | Norway | 71 | Fourth |
| SEED Capital | SEED Capital IV | Denmark | 67 | First |
| Alliance Venture | Alliance Venture Delta | Norway | 60 | First |
| Icebreaker.vc | Icebreaker Fund II | Finland | 50 | First |
| Pale Blue Dot | Pale Blue Dot Fund I | Sweden | 53 | First |
| J12 Ventures | J12 Fund I | Sweden | 47 | Final |
| Sparkmind.vc | Sparkmind Fund | Finland | 40 | First |
| Skagerak Maturo | Skagerak Maturo V | Norway | 30 | First |
High fundraising expectations for 2021
“Due to uncertainty concerning the pandemic and infection control measures, several of the planned fund closings got pushed to 2021. Our estimates show that funds worth around €1,6 billion could close during the year, which would be the third-best year in the last ten years,” says Argentum’s Ingibjörg Meyer-Myklestad.
A fund that is planning a first close in 2021 is Oslo-based SNÖ Ventures. Together with like-minded VCs in the other Nordic countries, SNÖ’s second fund will do co-investments in Nordic tech companies. The aim is to “unify the Nordics and strengthen the region’s connection to the US and broader Europe,” Teodor Bjerrang, Founding Partner of SNÖ, says.
“In our new fund, we are transitioning from a Norway-focused seed mandate to a pan-Nordic seed and Series A focus. With our track record and reputation well in place, we are now establishing a more international platform of LPs, advisors, and team members. While the pandemic certainly presents challenges in fundraising, we have strongly benefitted from the increased interest from international investors in finding trusted, knowledgeable local partners to help them navigate this stable and successful, yet still emerging, Nordic venture ecosystem,” Bjerrang says.
The Norwegian life science fund Hadean Ventures is also planning a first close of its second fund in 2021, says Managing Partner Ingrid Teigland Akay.
“It will have a similar strategy as our first fund, focusing on health care and life science companies across Europe with a particular attention to areas with very high-quality science and few specialist investors, or what we call ‘under-ventured’ regions. The Nordics is a good example of that,” says Teigland Akay.