Sweden’s start-up market attracts major impact investing

By Juliana Wheeler - December 5, 2023
In recent years, the picturesque Swedish capital has been the launch site of numerous successful startups. (Tobias Lindman)

Sweden is the largest market for venture capital investing in the Nordic region, supported by government-funded early stage investors, well-established domestic VC firms and, increasingly, US investors. They are all seeking the next Spotify, Klarna or Mojang Studios, maker of Minecraft, the popular video game.

Early- stage companies in Sweden raised $5.7 billion in 2022, according to Dealroom, making it the largest market for venture capital in the region. While early-stage funding in Sweden was down 14% in 2022 from a year earlier when it hit an all-time high, the market returned to the pre-pandemic trend and was 50% greater than funding in 2020.

A measure of Sweden’s success for early stage investments is its strong track record of ‘unicorns’, start-ups valued or exited at $1 billion during the previous 12 months, according to Dealroom.

Northvolt is a successful VC-funded Swedish company, which was founded by two former Tesla executives.  REUTERS/Esha Vaish

Recent Swedish early stage successes included sustainable companies that aim to enable the net zero energy transition. These include Einride, which provides sustainable shipping with electric and autonomous trucks to transport freight; Instabox, a renewable e-commerce logistics delivery company; and Polarium, a sustainable energy storage developer. Northvolt is another successful VC-funded Swedish company, which was founded by two former Tesla executives to manufacture sustainable batteries for EVs. It was valued at $12 billion in July 2022.

Strong Government Support Comes Early 

International venture capital investors, particularly from the US, have been increasing their presence in Sweden, attracted by its entrepreneurial business culture and government-backed financial support of early-stage companies.

Government-backed support comes from Almi Invest, a public seed investor that funds companies until they can seek later-stage private equity funding and Industrifonden, which also invests in seed to A round funding.

Almi Invest has co-invested with about 1,000 business angels and institutional investors. It manages some SEK 3.5 billion ($316.6 million) and has invested in more than 700 Swedish start-ups since its inception in 2009. Sectors in which it invests include tech, life sciences, cleantech, and industrials.

“Sweden has come to provide a high degree of innovation and the start-up climate has improved in the last 20 years, with successful entrepreneurs turning into business angels and fueling a richer start-up climate,” said a spokesperson at Almi Invest. This environment, in turn, attracts foreign investors.

US investors with a growing presence in Sweden include Citi Ventures, an investor in Doconomy, which enables companies and consumers to easily measure the environmental impact of their financial transactions, and Banana Capital, which invested in Goals, a multi-player platform-agnostic football e-sports game.

Sweden Punches Above its Weight

Maria Markusjan, a Swedish investor and Vice President at Citi Ventures, says: “Sweden has always punched above its weight when it comes to innovation: it has produced 37 unicorns, ranking 9th globally (according to Dealroom). Its early success in the innovation curve has fueled the next generation of start-up founders with entrepreneurs coming out of startups such as Spotify, iZettle and Klarna. Citi Ventures’ portfolio company Anyfin is another great example.”

Maria Markusjan, a Swedish investor and Vice President at Citi Ventures.

Citi Ventures is expanding its investment activity in Europe, and Sweden is one of the firm’s key markets given its culture of startup innovation, Markusjan says. The firm has made two investments in Sweden in the last two years, Anyfin and Doconomy, and is looking for more investment opportunities there, she added. 

Sweden is a leading market for impact, or values-driven, companies, a sector that is increasingly interesting to early stage investors. H2 Green Steel, a sustainable Swedish steel manufacturer, in September this year raised €1.5 billion of equity, the biggest European private placement in 2023. The proceeds will finance the construction and development of a large-scale green steel plant in Boden, Sweden, and of Europe’s first giga-scale electrolyzer. The plant will deliver steel with up to 95% less CO2 emissions, compared to steel made with traditional blast furnace technology. The company has raised a total €1.8 billion of equity since 2021. The latest round was led by Altor, GIC, Hy24 and Just Climate.

Success Paves the Way for More Success

International investors are excited about the start-up culture in Sweden, and are looking for long-term investment opportunities, according to the Almi Invest spokesperson: “[International investors] seem to be interested [in Swedish start-ups] for the longer term. The successes of Spotify, Mojang and Klarna are just some of the examples of successful ventures but there are many more. But most importantly, these successes as a whole have fostered a climate of entrepreneurship which generates new waves of exciting start-ups.”

Profile photo of Niklas Adalberth
Niklas Adalberth, a co-founder of Klarna. (Niklas Adalberth, LinkedIn)

One example is Norrsken, a non-profit foundation founded in 2016 by Niklas Adalberth, a co-founder of Klarna. It manages Norrsken Impact Accelerator, an accelerator program for early-stage impact startups. Norrsken VC is a €100 million impact VC fund that invests in entrepreneurs who aim to solve societal issues using technology.

The ecosystem of government funding and successful entrepreneurs putting their profits into other start-ups has supported this robust environment for many years. The Swedish government founded Industrifonden in 1979 to provide Swedish industry with an innovation growth engine. Industrifonden focuses on long-term investments that will create lasting value and benefits to society. Its investments include Oatly, the popular oat drink company, and Exeri, which digitizes electric grids to improve grid performance and minimize outages. Norrsken also has funds that invest in science-based companies, in African companies, and impact start-ups.

“Sweden has a long history of championing innovation, and invests ~50% more in it than the European average, with the public portion being one of the highest in the world,” says Markusjan at Citi Ventures. “These macro initiatives have created a great support system and opportunities for a healthy venture ecosystem to flourish.” 

For more information about venture capital investing in Sweden:


All of Almi’s investments can be found here: https://www.almi.se/en/almi-invest/portfolio/ with a selection below:

Aqua Robur Technologies, smart water infrastructure

Climate View, a platform for cities’ climate planning

DH Anticounterfeit, provides web-based brand and IP protection 

Lumina Adhesives, which makes innovative medical dressings 



All of Norrsken’s investments can be found here: https://www.norrsken.vc/portfolio with a selection below: 

https://northvolt.com (green battery manufacturer)

https://www.einride.tech (electric autonomous trucks manufacturer)

https://heartaerospace.com (electric short-haul airplane manufacturer)

https://olioapp.com/en/ (peer to peer food sharing platform)


By Juliana Wheeler, a US-based communications consultant and freelance journalist. Editor: Marybeth Sandell