The State of Nordic Private Equity 2022

Argentum

Frida is a Partner at Verdane, where she leads the Investor Relations team, covering investor relations, fundraising and co-investments. She joined Verdane in Stockholm in 2010 from Helix Associates, Jefferies Private Placement Group, to build its investor relations and capital raising function.


Frida holds an MSc in Business and Economics from the Stockholm School of Economics (SSE) and a CEMS Master’s in International Management from HEC Paris (France) and SSE. She is a CFA charter holder.

A specialist growth investment firm that partners with tech-enabling and sustainable European businesses 

Invests as a minority or majority investor in single companies or through portfolios of companies 

Looks to deploy inside two core growth themes: Digitalisation and Decarbonisation 

Verdane holds over €4.5 billion in total commitments, and has made over 140 investments since 2003 

Operates in Europe, with bases in Stockholm, Oslo, London, Helsinki, Copenhagen, Berlin and Munich 

Second highest number of venture and growth deals on record. A total of 359 deals.

There was a 20 % reduction in deals compared to the record-breaking level in 2021, but a 10 % increase compared to the average between 2017 and 2021.

Fund managers invested €2.2 bn in Nordic venture and growth companies. 

Activity slowed down in the second half of 2022. Two thirds of deals were completed in the first half of the year, representing more than three quarters of the invested amount.

Compared to the average for 2017-2021, the invested amount was up 52 %, but down by 25 % compared to 2021.

Investments by seed, venture and growth funds in Nordic companies in 2022.

Amount invested in Nordic venture and growth in 2022.


Quarterly view: The investment level was very high in the first two quarters of 2022. In Q3, the activity slowed down considerably, before increasing again in Q4. Overall, the activity slowed down in the second half of the year. Two thirds of deals were completed and 77 % of the invested amount was invested in the first half of the year. 

The investment level was very high in the first two quarters of 2022. In Q3, the activity slowed down considerably, before increasing again in Q4. Overall, the activity slowed down in the second half of the year. Two thirds of deals were completed and 77 % of the invested amount was invested in the first half of the year. 

 venture and growth deals by quarter, 2022

Number of venture investments in industrials in 2022. This is 3 percentage points up on the average for the same period in the previous five years.

New sector: Financials has only been counted as a separate sector in Argentum’s tracking for the last couple of years, and the sector already has a significant market share. 

Financials has only been counted as a separate sector in Argentum’s tracking for the last couple of years, and the sector already has a significant market share. 

Norwegian growth: Activity in Nordic venture fell in 2022, but the Norwegian market experienced increased activity despite the overall fall in the Nordics. Activity in Denmark fell sharply, while the decrease was moderate in Sweden and Finland. 

Activity in Nordic venture fell in 2022, but the Norwegian market experienced increased activity despite the overall fall in the Nordics. Activity in Denmark fell sharply, while the decrease was moderate in Sweden and Finland. 

Active Norwegian fund managers: Norwegian fund managers made the most investments in Nordic venture and growth in 2022, with 19 % of the Nordic market. The number of investments by US fund managers fell sharply by 51 %, compared to 2021. 

Norwegian fund managers made the most investments in Nordic venture and growth in 2022, with 19 % of the Nordic market. The number of investments by US fund managers fell sharply by 51 %, compared to 2021. 

Nordic venture funds raised €7.1 bn in 2022 compared to €2 bn in 2021. 

In total, venture and growth funds raised €7.1 bn, more than twice the previous record from 2019 of €3 bn.

Seven funds exceeded €100 m in 2022, compared to five in 2021 and zero in 2020

 NB: Only taking public closings into account.

Despite activity slowing down in the second half of 2022, most of the fundraising was closed in the second half of 2022.

According to the overview, the total amount of capital in the fundraising pipeline for 2023 is €2.6 bn.

Fundraising, by home country of fund manager

Fundraising in 2022, by home country of fund manager

public information, either on the funds’ websites or according to news stories.

 Only includes funds with a public closing in 2022.

Venture funds completed 44 exits of Nordic companies in 2021.

VC exits decreased by 57 % from 2021, and by 42 % compared to the previous five years. 

The number of exits was the lowest level since Argentum’s tracking of the market started in 2007.

Most VC-backed exits involved ICT companies (70 %).

Industrials was the second largest sector (11 %). 

“We are currently seeing rising interest rates and market unrest, which contributes to lower investment activity and exits, particularly within the venture phase.”

 ICT sector dominating: ICT exits accounted for 70 % of exits in the venture segment, followed by industrials and consumer companies. 

 ICT exits accounted for 70 % of exits in the venture segment, followed by industrials and consumer companies. 

Venture and growth exits by year and home country of company in 2018-2022

Round-up of Nordic private equity in 2022

Increase in secondary exits: Secondary exits made up 28 % of venture exits in 2022, compared to an average share of 8 % of exits in the previous five years The most popular exit strategy in 2021 was trade sale, with 55% of exits. However, compared to the average in the previous five years, this is a relatively low level (down from 71 %, see graph). 

Secondary exits made up 28 % of venture exits in 2022, compared to an average share of 8 % of exits in the previous five years The most popular exit strategy in 2021 was trade sale, with 55% of exits. However, compared to the average in the previous five years, this is a relatively low level (down from 71 %, see graph). 

127 buyout deals were completed in 2022, which represents a normalisation of activity after soaring in 2021. 

37 % fewer deals than in 2021, and 12 % fewer than the average for the previous five years.

Buyout funds invested €9.3 bn across these deals.

17 % decrease in the invested amount compared to the average in the previous five years. 

Investments fell by more than 30 % across all three major sectors – industrials, ICT and consumer. 

71 % of deals and 67 % of the invested amount were completed in the first half of 2022, illustrating how activity fell sharply in the second half of the year.

Industrial companies attracted the most investments, with 34 % of deals.

Aggregate value invested in Nordic venture & growth companies in 2022. Down 26 % compared to 2021, but up 52 % compared to 2017-2021.

Pivotal year: Activity in the Nordic buyout segment normalised in 2022, following an extraordinariry high activity level in 2021, with regard to both the number of deals and the invested amount. 

Activity in the Nordic buyout segment normalised in 2022, following an extraordinariry high activity level in 2021, with regard to both the number of deals and the invested amount.

Number of Nordic venture & growth deals in 2022. Second highest on record.

Nordic buyout deals by half-year, 2017-2022

Decrease in the number of venture deals compared to the record in 2021.

Nordic fund managers

Non-Nordic fund managers

Investments from Non-Nordic GPs fell sharply, especially for US based GPs. The share of non-Nordic investments fell from 40 % in 2021 to 32 % in 2022.

 Most active fund managers in terms of investments in new portfolio companies. Add-on investments not included.

Aderian, Avidly, Diakrit, Handverkskompaniet, netIP, SSI Diagnostica, Westpack

Aro Systems, Hydroware, Netox, Niemi Palvelu, SARC Architects

Audiowell, Nordic Climate Group, Nova Austral, Silo AI, Svea Solar, Vianode

Danx, Init, NTI Group, Oral Care, Voff Premium Pet Food

 Only Verdane’s investments categorised as buyouts are included in the list.

Aggregate value invested in Nordic buyout companies in 2022. This corresponds to a 51 % decrease compared to 2021, and 17 % decrease compared to 2017-2021.

Active Brands, Apoteka, Hobbii, Topro Industri

Active Brands, Epista Life Science, Firesafe, ilionx, Seriline

Reduction in the number of Nordic buyout deals in 2022 compared to 2021.

Deals

Invested amount (€bn)

Buyout investments (amount) by home country of company

After high activity in the first half of 2022, both the number of investments and the amount invested in Nordic buyout fell significantly in the second half of 2022.

Nordic VC & Growth funds raised a record-high amount of capital in 2022.

 of deals by home country of investor, 2022

Fundraising among Nordic VC & Growth funds was 138 % above the previous record of €3 bn, in 2019.

Never have Nordic buyout funds raised more capital than in 2022, up 9 % compared to the previous record in 2020.

Description: A group formed by Equip that instals and renovates underground pipelines without digging. The methods they use are resource efficient and have minimal impact on the environment. 

According to our overview, the amount of capital in the fundraising pipeline for 2023 is €22.6 bn for buyout and venture combined.

The combined number of exits in the venture and buyout segments. Compared to 2021, the combined number of exits is down by 51 %.

In total, Nordic buyout funds raised a record-breaking €28.9 bn during 2022, up from €12.1 bn in 2021. 

Large-cap funds accounted for 92 % of capital raised compared to 2021, when several small- and mid-cap funds raised a majority of the amount, at almost two-thirds.

Three large-cap funds (>1 € bn) closed in 2022, which was the same as in 2021 and 2020. However, in 2022, the three funds in question raised a combined €26.7 bn, compared to €4.2 bn for the three funds in 2021.

The number of VC-backed exits fell by 57 % compared to 2021, down from 102 in 2021 to 44.

The fundraising expectations for 2023 are positive, with €20 bn in the pipeline, although that is lower than in 2022.

Total fundraising by fund size in Nordic buyout

There was a 47 % decrease in the number of exits backed by buyout funds compared to 2021.

Top 10 Nordic buyout funds with public closing

public information, either on the funds’ websites or according to news articles.

Idun I held final close in December 2021, but was announced in January 2022. 

2022 was a slow year for public listings of Nordic companies backed by PE funds.

As few as 71 buyout exits were completed in 2022. 

The number of exits was almost halved compared to the record-high level in 2021. 

Compared to the average for the period 2017-21, the level was 23 % lower. 

After the financial crisis in 2007-2009, only 2010 and 2020 saw a lower number of Nordic buyout exits.

Secondary exits still on the rise: Trade sales are still the most common exit strategy, but secondaries are closing the gap. Trade sales accounted for 45 % of buyout exits in 2022, closely followed by secondary exits, which accounted for 35 % of deals. 

 Trade sales are still the most common exit strategy, but secondaries are closing the gap. Trade sales accounted for 45 % of buyout exits in 2022, closely followed by secondary exits, which accounted for 35 % of deals. 

Changes in the sector composition: There was a change in the sector composition for exits. Industrials was still the sector with the most exits, with 34 % of exits. The respective shares of health care and life science and energy exits increased, whereas the consumer share remained stable. ICT exits plummeted in 2022.

There was a change in the sector composition for exits. Industrials was still the sector with the most exits, with 34 % of exits. The respective shares of health care and life science and energy exits increased, whereas the consumer share remained stable. ICT exits plummeted in 2022.

Buyout exits, by year and home country of company

Nordic buyout: PE-backed exits by country,

Private equity firms use multiples to understand the price that they are paying for a company relative to a financial metric.

One of the most common valuation multiples is the ratio between EV and EBITDA.

EV is the enterprise value or the total value of a company.

EBITDA is earnings before interest, taxes, depreciation and amortisation – in other words, the company’s operating income.

The number of PE-backed IPOs decreased by 86 %, from 59 IPOs in 2021.

7.4 % of all European IPOs were Nordic and PE-backed, down from 12 % in 2021.

The second largest IPO in Europe in 2022 was a Nordic PE-backed company (Vår Energi).

PE-backed IPOs in 2022, by home country of listed company

Chalmers Innovation, Karolinska Development, Almi Invest

The State of Nordic Private Equity 2022

2. Round-up of Nordic private equity in 2022