Impact startups are companies that have a positive impact on societies, industries and ecosystems – and if you look at European influence hubs, it is a country that surpasses them all.
The annual VC investment in Nordic startups has grown 25 times in the last decade, with Sweden in the lead. Investments in Swedish impact startups increased from EUR 1.3 billion in 2020 to EUR 3.6 billion this year. For the first time ever, Sweden has surpassed the United Kingdom and Germany to become the best European ecosystem through VC money invested in start-ups.
We have crushed the Dealroom figures – here it is Sweden’s impact sector that makes the biggest impact and who leads the charge.
Which Swedish influence sector is largest?
The United Nations Sustainable Development Goals (SDGs) are a set of 17 global goals that serve as a plan for a more sustainable future. Impact startups fall under the SDG umbrella, making it a useful way to categorize and measure the power sector.
Only in Sweden is it available 460 impact startups spread over the 17 SDG categories. SDG with the largest number of companies is “Climate Action”, which has 158 startups listed. “Good Health and Wellbeing” has 119 startups while “Industry Innovation and Infrastructure” has 112 startups.
SDGs with the least number of Swedish startups are “No Poverty” and “Peace, Justice and Strong Institutions”.
Of Sweden’s impact sectors, “Affordable and clean energy” is. attract the most funding with 2.8 billion euros invested in 2021 so far. This is closely followed by “Industry Innovation and Infrastructure” and “Sustainable Cities and Communities”, which have received € 2.7 billion in funding each this year.
One of Europe’s clean energy darlings is Stockholm-based Northvolt, a battery manufacturer valued at 10.7 billion euros. It took the lion’s share of SDG investments by securing EUR 2.4 billion in June this year.
But bigger is not always better – one of Sweden’s smaller, but fastest growing SDG sectors is “Quality Education”. The sector grew from just 4.5 million euros in 2019 to 34.8 million euros this year. “Good health and well-being” also saw steep growth, from EUR 49.2 million in 2019 to EUR 407 million in 2021.
Affordable and clean energy startups have attracted 2.8 billion euros this year
Kry, who is on a mission to become go-to healthcare superapp, is the largest company in “Good health and well-being” with a valuation of 1.8 billion euros. The company, which allows users to consult a doctor online, secured € 272.6 million in its Series D round in April this year, led by CPP Investments and Fidelity Management and Research.
This makes Kry the second most valued health technology in Europe, after UK-based Babylon Health.
Money money money
Investors in Sweden’s influence sector are a global group, with 57.5% of the capital coming from foreign investors.
But locally, a large part of Sweden’s VC funding goes to influencing startups; In 2020, 43% of Sweden’s total venture capital investments went to SDG-led companies.
43% of VC funding in Sweden went to influence startups last year, while in Norway it was 30%. pic.twitter.com/BfrGXcqRgW
– Sifted (@Siftedeu) 11 May 2021
Since 2010, three Swedish VCs have been leads the way in the appropriation space. Almi Invest has participated in 57 borrowing rounds with a specialized greentech fund focused on investments that reduce CO2. Norrsken VC participated in 32 rounds of funding and invested € 2.7 billion over the last 12 months; and Creandum has participated in 20 rounds of funding.
Sweden’s soon corners
While Kry and Northvolt have both achieved unicorn status, there are a growing number of Swedish companies hot on their heels.
This year, Dealroom identified 34 potential unicorns, or soonicorns, in the Nordic countries, seven of which are start-ups. In 2020, only three start-ups were identified as possible unicorns. These include the city mobility company Voi and meal kit business Simple Feast.
Investors in Sweden’s influence sector are a global group, with 57.5% of the capital coming from foreign investors
It turns out that it’s good for the planet is good for business: Dealroom data shows that startups with an impact on the seed stage were more likely to raise a Series A round within 36 months (39%) than startups without impact.
Many of these are in SaaS and hardware, such as Sturdy, a software service company founded in 2020 that recently completed its first round of financing and hopes to take on Microsoft’s GitHub.
Another is Furhat Robotics, a conversation start of AI and social robotics that raised € 5.8 million after six rounds of funding.
Act for influence
Do you want to learn more about impact startups in the technology sector?
Act for Impact Days is an event series produced by Business Sweden, focused on how Sweden’s tech ecosystem, sustainability and impact sectors are involved in the UN’s sustainable development goals.
Learn how you can be a part of the solution at their upcoming event on fintech, mobility and 5G here.
Upscaling of Swedish technology to be pioneering for the possible.