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There used to be a time where the main way for Nordic entrepreneurs to be successful was to decamp to Silicon Valley.

Now, the Valley is coming to northernmost Europe as funds look to pick out the best new tech startups. 

The first quarter of 2021 saw a record $1.56 billion invested into tech startups from Norway, Finland, Sweden, Denmark, and Iceland by US funds, per Dealroom data. It’s part of a larger trend of Bay Area investors looking beyond their traditional patch, with the Nordics now an established destination for venture capital dollars. 

“US funds are turning up at our doorstep,” Tommy Andersen, managing partner at specialized early-stage fund ByFounders, told Insider. “It was rare to see US funds in the Nordics pre-COVID-19 but now everyone is on Zoom doing deals and that has dramatically changed the competitive landscape.”

The start of 2021’s booming figures was due in part to US investor involvement in mega rounds for payments firm Klarna, food-delivery firm Wolt, music startup Epidemic Sound, and telehealth firm Kry. For context, in 2020 $1.68 billion was invested in Nordic startups by US funds.

It’s not just mega rounds that are getting attention though.

Oslo-based Tillit secured €2.5 million ($3 million) in funding from Airbnb investor Sequoia Capital, marking the Silicon Valley firm’s first investment in Norway.

“Big names coming in is a massive boost to the ecosystem,” according to Johan Brand, the founder of Norwegian education tech giant Kahoot and now an angel investor. “More money means more deal flow, that creates a wave as other funds come in.” 

The shift mirrors one seen across much of Europe since the beginning of the COVID-19 pandemic in the Western world from March 2020 onwards. As VC investors globally realised the necessity of doing deals via video chat, the global tech ecosystem has effectively become accessible to all funds. 

“US funds are in Europe more than ever because they are ripe with cash from various SPACs and IPOs,” Andersen added. “Liquidity rates are so high in the market because interest rates are so low. It’s led to more US-style valuations coming in so we are definitely feeling the heat.”

“10 years ago, not even VC firms in London had a Nordic focus or representative,” Brand added. “Sweden has always been more advanced than its neighbors, but now in Norway and Denmark the talent is there and people are leaving jobs to work in …read more

Source:: Business Insider

      

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‘US funds are turning up at our doorstep.’ VC investment in the Nordics is booming as COVID-19 draws investors over Zoom

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