(Bloomberg) – As competition intensifies between Europe’s top listings after Brexit, an unlikely challenger has taken second place after top dog London: Sweden.

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As many as 122 companies raised about $ 14 billion through IPOs in Stockholm this year, the most ever. It is second only to the United Kingdom’s $ 22 billion, according to data compiled by Bloomberg.

It’s a remarkable turnaround for a market that was nowhere near the peak last year, with only $ 2.7 billion in revenue. Sweden has hosted a variety of IPOs, ranging from Volvo Car AB, which raised $ 2.3 billion in one of Europe’s largest IPOs this year, to the veterinary care company Vimian Group AB and the investment company Storskogen Group AB.

Adena Friedman, CEO of Nasdaq Inc., described the current conditions in the Nordic markets as “fantastic”.

“We have had a really strong loyalty and participation among our market participants, our trading companies and we have had a really healthy new issue environment,” Friedman told Bloomberg during a visit to the Swedish capital recently.

Sweden’s climb to the top comes in the midst of a global stock market boom, fueled by higher valuations and resilient stock indices. The benchmark index OMX Stockholm 30 has increased by 25% in 2021, which places it among Europe’s best performers this year.

“Secret sauce”

Stockholm’s “secret sauce” is its investor base, said Jonas Strom, CEO of the investment bank ABG Sundal Collier. A large number of small institutional investors and a retail culture of investing in shares means that there is a wide range of IPO buyers, he said.

Sweden’s pulsating tech, renewable energy and life-science startup scene has also been a source of IPOs. About 60% of the new listings on OMX Stockholm came from the consumer, technology and healthcare sectors this year, according to information from Nasdaq.

The story continues

“The stars came in line” for Stockholm this year, said Joakim Bornold, savings adviser at Soderberg & Partners, at the same time as he struck a more cautious tone for 2022. “Many companies that went public are not well financed and will have to issue new shares, he said. “Will the market be able to swallow the need for financing that exists among some of these small businesses?”

The large volume of business this year has made investors more selective, with increasing market challenges from supply chain problems to higher inflation that make portfolio managers more risk-averse. And like many smaller markets, Sweden has seen some of its most promising startups look abroad. The oat milk manufacturer Oatly AB was listed on the stock exchange in the USA this year, in the footsteps of the music streaming company Spotify Technology SA.

The big question is whether Europe’s most valuable unicorn, the fintech giant Klarna, will follow or choose its home base.

(Adds comments from Nasdaq’s CEO)

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