Disclaimer: This blog is my side hustle and is separate from my role at SVB
Sections:
If you want to skip the storytelling (I promise you won’t hurt my feelings), these links will take you to each market breakdown!
- Market Trends — Self-explanatory.
- Music — Sweden might not be the biggest country, but it is a POWERHOUSE in the music industry.
- Furniture — I went to IKEA to try the meatballs, so I’m going to dissect the furniture industry.
- At-Home Diagnostics — An STD-test vending machine led me to research an industry that has skyrocketed in the last few years.
Market Trends
Sweden has one of the fastest-growing startup scenes in Europe. According to the World Intellectual Property Organization (WIPO), Sweden is the 3rd most innovative country globally. The European Commission ranks the country as the 2nd most innovative in the EU, behind Denmark (which I will cover later). That’s wild, considering Sweden’s population is only 10 million, roughly the same as Michigan’s! Stockholm alone is home to giants such as Klarna, Spotify, and Skype.
While activity has dropped since 2021, the total capital invested has still been greater these last two years than in 2019 and 2020 despite the lower deal count. The top verticals with the most deals in 2023 were SaaS, CleanTech, AI/ML, and HealthTech.
Within each deal category, the most recent raises are:
- Neogap (November 10, 2023) — Accelerator/Incubator
- Developer of personalized cancer immunotherapy designed to precisely target and eliminate cancer. They raised USD 2.63 million from the European Innovation Council Fund. - Mauj (November 13, 2023) — Seed
- Sexual and menstrual wellness brand intended to destigmatize sexual and menstrual wellness for Arab women. They raised USD 0.50 million from The Case for Her. - Pixelgen Technologies (October 9, 2023) — Series A
- Developer focused on delivering the first DNA-based visualization technology for cell-surface proteomics. They raised EUR 7.3 million from Industrifonden and Navigare Ventures. - Eliq (November 21, 2023) — Growth round
- Developer of energy monitoring and white-label tools designed to improve the way energy is used in everyday life. They raised EUR 10.7 million from Axpo Holding, Inven Capital, and Valkea Growth Club.
The top 5 most active Swedish VC firms in the last 12 months are:
- Chalmers Ventures — founded in 1997 and based in Gothenburg — has invested in 34 startups in the previous 12 months. The firm prefers to invest in pre-seed, seed, and growth-stage companies specializing in DeepTech.
- Stockholm Innovation and Growth — the accelerator was founded in 2002 and is based in Stockholm. Within the last year, they have made 31 investments. They prefer seed and early-stage companies and invest in ClimateTech, HealthTech, and DeepTech.
- Almi Invest — founded in 2009 and based in Stockholm — has made 23 investments this past year. They prefer seed, early stage, and later stage rounds and invest in areas such as Tech, Life Science, CleanTech, and Industry.
- Industrifonden — the oldest firm on the list — was founded in 1979 and is based in Stockholm. They have made 20 investments in the last 12 months. They invest in early-stage companies operating in the life science, deep technology, and transformative technology sectors.
- Navigare Ventures — the youngest firm on the list! Navigare was founded in 2021 and is based in…you guessed it! Stockholm. They invest in early-stage companies at the frontier of science and technology.
STORYTIME
I want to start this post by apologizing to Stockholm. I underestimated the city. The only reason I went to Stockholm was because it was close to Norway, and I figured, “If I’m going to do Scandinavia, I might as well do as much as I can.”
I’m so glad I went because I loved it. I mean L-O-V-E-D it. I wish I had spent more time there. If London is the European version of New York, Stockholm is Chicago — except…cleaner.
If you don’t know much about Stockholm, it’s known as the “Venice of the North” because it’s 14 islands connected with more than 50 bridges. Because of this, one of the popular ways to travel around the city is by ferry. I didn’t do this, but you could if you wanted to. Their metro is also a popular mode of transport. What’s neat about the metro is that it’s one big art gallery. Each station has unique art covering the walls.
I don’t have any market insights to discuss about their transportation. I just wanted to talk about it.
Vasa Museet — It’s giving Pirates of the Caribbean
The first island I visited was Djurgården, home to one of the most visited museums in Scandinavia: Vasa Museet.
The Vasa Museet is all about the Vasa, the only almost fully intact 17th-century ship that has ever been salvaged. I loved this museum. I read just about every plaque there was to read, and the only reason I didn’t finish them all was because I had a flight to catch.
The ship in the museum is 98% original, even though it was underwater for over 300 years (let that sink in for a moment — LOL PUN INTENDED). A brief history of the ship and why it was so well preserved:
The Vasa sailed on August 10th, 1628. Only 1300 meters (0.8 miles) into the journey, a gust of wind caused the Vasa to heel to port. I don’t know what that means; that’s just what the website wrote. Basically, the wind caused the ship to tilt, water rushed in, the ship sank.
Why did it sink? Well, the Vasa is HUGE. I have about 30 photos from 30 different angles on my phone trying to get the entire ship in frame, but I simply couldn’t. The vessel stands four stories tall. However, it is not very wide. The boat's keel was filled with rocks (technical term: ballast) to weigh the ship down, but because of its narrow shape, they couldn’t add enough ballast to counteract the ship's height. Therefore, all it took was a gust of wind to bring this scary-looking boat down.
The Vasa sank into cold, dark, almost oxygen-free, brackish water — an ideal environment for preservation. Decomposition was slowed down, and the growth of microorganisms was discouraged, further slowing down degradation.
Another — counterintuitive — reason the Vasa was so well preserved: pollution. Until the late 20th century, the water in Stockholm’s harbor was highly polluted due to industrialization and urbanization. This toxic environment further prevented bacteria or other organisms from growing and breaking down the wood. I don’t mean to paint pollution positively, though; the harsh chemicals in the water were absorbed into the wood and caused many problems once the ship was exposed to air, but you can read more about that here.
Another extremely popular attraction in Djurgården — one that all the TikTok videos mention — is the ABBA museum. Anyone who knows me knows that #musicislyfe, so I obviously had to go. I went on my first night in Stockholm and only planned on spending 1 hour there. I spent 3. The museum is as interactive as it gets. You can mix one of ABBA’s songs (I was really good at this), sing in a vocal booth (not so good at this), sing on stage as the 5th ABBA member, and take a photo in the Bell 47 Helicopter.
If you live under a ROCK, or idk…live under a ROCK — ABBA is a pop supergroup that was formed in Stockholm in 1972 by Agnetha Fältskog, Björn Ulvaeus, Benny Andersson, and Anni-Frid (Frida) Lyngstad.
A quick breakdown of how ABBA was formed: Benny and Björn had previously worked on songs together; they met Agnetha and Frida and formed ABBA while also dating each other (Benny and Agnetha, Björn and Frida).
ABBA rose to international fame in 1974 when their song “Waterloo” won Eurovision, becoming the first Swedish group to do so. To date, they have sold between 150 million and 385 million records worldwide, have 9 No. 1 singles in the UK, and have over 3.5 billion streams on Spotify.
This brings me to the next stop on my Stockholm tour and another Swedish icon — Spotify.
While exploring the city, I took a detour to visit Spotify’s headquarters. While, unfortunately, I wasn’t able to tour the offices (I asked), I was able to get a photo of the sign in front of the building.
Spotify was developed in 2006 — and launched in 2008 — by Daniel Ek and Martin Lorentzon. It actually started as a way to fight against music piracy, a growing problem due to file-sharing sites like Napster and LimeWire.
Today, it has grown into one of the biggest companies in the world and is the most popular audio streaming subscription service. In Q3 2023, the platform had 574 million active users worldwide and, in 2022, generated over 11.7 billion euros in revenue.
I can’t talk about Spotify without also mentioning the ongoing issue with royalties. For years, artists — especially songwriters — have rightfully complained about Spotify’s royalty payouts. While 70% of Spotify’s revenue is paid to rights holders (an important distinction from artists), artists only receive $0.003 — $0.005 per stream on average. Why?
A shortened Pia-explanation: It’s complicated.
From my limited understanding, Spotify pays royalties to rights holders based on the artist’s streams as a percentage of Spotify’s total streams. Artists who make up a greater percentage of Spotify’s total streams get a larger percentage of the revenue. Those royalty payments don’t directly go to the artists and the songwriters. Instead, the payments get split among all the right holders, which can include labels, publishers, songwriters, sound engineers, singers, etc.
The full explanation is very complicated and very long. If you’re interested in going down that rabbit hole (it’s a deep one), here is a great article that covers it ALL.
Okay, ANYWAY, the point of this blog is to talk about venture trends, so let’s break down the music industry.
Music — We can’t stop listening to it
At the end of 2022, the global recorded music market was worth USD 26.2 billion, a 9% growth from 2021. Subscription streaming accounted for USD 12.7 billion, and overall streaming (subscription and advertising-supported) accounted for 67% of the market. Here is a cool chart that highlights the changing revenue makeup of the recorded music industry.
Sweden is the 3rd largest exporter of pop music, generating around EUR 193 million in 2020. It makes sense, considering Sweden is home to artists such as ABBA, Avicii (RIP), Roxette, Swedish House Mafia, Robyn, Tove Lo, Max Martin, Zara Larsson…the list goes on and on.
The Swedish music startup ecosystem is also loaded. Besides Spotify, other well-known music and related startups founded in Sweden include Soundcloud, Kobalt, Arduino (I said music and RELATED), Snafu, Tracklib, and Soundtrack.
Tracklib, a music sampling platform that I actually use quite often, raised USD 12.25 million in September of 2021. Investors included Baron Davis and Sony Innovation Fund.
Some notable fundings from this year:
- Arduino — a developer of an electronics prototyping platform intended to help users create interactive electronic objects, raised USD 58.7 million in September. Investors include Bosch Ventures, CDP Venture Capital, and Anzu Partners.
- MasterExchange — a trading platform intended to enhance the buying, selling, and trading of music shares, raised USD 2.85 million in August. Investors include Vectr Ventures, Vectr Fintech Partners, and MarketX
- anotherblock — a blockchain-based music rights marketplace intended to democratize music ownership, raised USD 4.4 million in May. Investors include Axwell and Swedish House Mafia.
Furniture — Cloud couches are here to stay!
The next stop on my 2-day Stockholm tour was IKEA. If I’m being honest, I only visited IKEA to try the meatballs (had to see if they tasted different!), but an opportunity is an opportunity, so let’s pretend this visit was for the blog.
IKEA was founded in a small town called Småland in 1943 by Ingvar Kamprad. Only 17 at the time, Ingvar started by selling goods like wallets and pens. In 1948, after receiving money from his father, Ingvar began selling furniture, launching the IKEA we all know and love today.
IKEA is part of a massive industry with competitors like Ashley Furniture, Bed Bath & Beyond, and Wayfair. The global home furnishing market was valued at $516.66 billion in 2022 and is projected to reach $780.43 billion by 2030.
In 2020, Sweden was the third largest furniture manufacturer per capita in Europe, producing EUR 2.7 billion worth of furniture. Swedish VC activity in this space hasn’t been too active these last five years — only USD 15.34 million of capital has been raised.
In 2022, 3 companies raised:
- Sajkla — a digital platform for reused furniture and furnishings to serve the recycling market, raised USD 300k from Skaraborg Invest.
- Beleco — a furniture renting platform designed to offer designer and office furniture on demand, raised USD 2.18 million from VEQ and Alfvén & Didrikson.
- Ekbacken Studios — a manufacturer of sustainably produced furniture from upcycled waste materials, raised an Accelerator/Incubator round from Stockholm Innovation & Growth.
At-Home Diagnostics — Doctor visits are so millennial
In between my morning fika (my diet in Stockholm was literally Swedish cinnamon rolls and meatballs…) and my strolls through the old town of Gamla Stan, I discovered a really interesting vending machine.
Not just any vending machine but an at-home diagnostics vending machine. This machine had tests for common STDs, lactose and gluten intolerances (for the IBS girlies), and nutrition, skin, and training (not sure what that tested for). Not only that, but these tests were pretty affordable, ranging from $20–65. It’s simple to do, too: you take the test, send it to their labs, and within a few days, you’ll receive a code that will allow you to unlock your results on their website. As a bonus, the results will always come with a medical recommendation.
The maker behind these tests is Dynamic Code. It was founded in 2000 in a town called Linköping by Anne Kihlgren (we love women in STEM!!). To date, the company has raised USD 11.63 million from Swedish investors such as BackingMinds and Duus Capital Partners.
Dynamic Code is part of the rapidly growing market of at-home diagnostics. In 2022, it was estimated that the global home diagnostics market was USD 5.92 billion, and it is expected to reach USD 9.87 billion by 2032. At-home testing has been around since the 1970s (think pregnancy tests), but many factors have driven the recent rise and expansion of these devices:
- Covid (obvious one)
- A rise in chronic illnesses in the population
- The mobile apps era: in 2021, 47% of all apps focused on managing health conditions, and many of these apps are designed to work with testing kits
- A stronger desire for personalized medicine
- Technological advancements, which have allowed testing to be quicker and more accurate
Outside of the use cases I’ve already listed, at-home diagnostics can also be used for glucose tracking, fertility monitoring, sleep apnea, genetic diseases, and rizz levels… I’M JUST KIDDING.
Another woman-led Swedish startup, UTI-lizer, raised USD 3 million in May 2023 from Almi Invest and Propel Capital. As the name suggests, this company develops point-of-care diagnostic tests designed for urinary tract infections.
Again, no conclusion. If you want to see a few more pictures, please see below. I hope you enjoyed this blog and visit Sweden soon.
Bye!
