Swedish startups, by all accounts, had a good year in 2021, having collectively raised €7.8 billion, according to a new report from Dealroom.
That’s an increase of 2.4x from the previous year. According to the February report, the boost came largely from late-stage funding rounds, which contributed to around 70% of all funding.
Sweden also led Europe in 2021 in terms of impact-focused startups, with impact startups raising over half of the country venture capital funding, allowing Sweden to lead through venture capital.
The report noted the flourishing startup landscape in Sweden, which includes buy now, pay later (BNPL) firm Klarna — the biggest private startup in Europe in general — with its $41 billion valuation.
The value of the startup ecosystem has doubled within the past year, and is now valued at €239 billion, up from €122 billion from 2020. Some of the notable companies formed there in the last decade include Spotify, Northvolk and Polestar, according to the report.
The report also said that one of the reasons Sweden does so well is its social welfare system, including free education and a government that has been generous with pushing for early access for new technology. That included the “home PC reform” in the 1990s, when a million Swedes got their first computer or internet access.
However, one sticking point for the Swedish tech world is a lack of diversity. The presentation notes the dearth of women in tech, with less than 1% of the capital going to all-female founding teams. A whopping 88.2% went to all-male teams, while around 10% went to mixed founding teams.
According to Nora Bavey, general partner at Unconventional Ventures, the issue comes down to a need for more accountability.
“We need accountability,” she said in the report. “Governments and institutional investors should lead the way and not wait for private capital to make the move. The numbers tells us that not only are female founders raising longer periods for less funding but also at lower valuations. However, when we look at profit, female founders are 45% more profitable than all male founding team.”
According to some leaders on the scene, the focus on sustainability and the environment is important as a plus for the entrepreneur scene.
“We are super excited to see many of the new startups focusing on impact and sustainability,” said Tove Larsson, general partner with Norrsken. “We, as in humanity and our planet, are facing enormous challenges. And to address these challenges, we need new and scalable solutions. We really believe that startups are in many ways the perfect foundation for such solutions. Startups can start from a blank sheet, be truly innovative, agile and brave.”
PYMNTS wrote that Klarna posted year-end results for 2021 that showed “runaway success” in the U.S. It had a 71% surge in users and a 42% increase in transaction volume.
See also: Klarna US Volumes, Members, Income Soar
The U.S. was the second-highest revenue center for Klarna, and Klarna is collaborating with numerous high profile retail brands like PetCo, Lululemon, Bed Bath and Beyond, Macy’s and others.
According to CEO and co-founder Sebastian Siemiatkowski, 99% of the company’s BNPL loans have been repaid worldwide.
He cited low credit loss rates and said that was a big accomplishment because “behind that numerical reduction is the lives of tens of thousands of consumers where we have avoided adding to an unhealthy debt burden.”
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