How financing startups became a success
The desk believes that the Nordic region is emerging as a beacon for startup financing, bolstered by Nordea's systematic approach to risk assessment and investor integration. Per the full note from Nordea, their strategy has led to a record-high €11.9 billion invested in Nordic startups in 2021, underlining the region's potential to shape the business landscape of the future. This positive narrative aligns with our current targets for the Nordic currencies, positioning them favorably amid a robust venture capital environment.
What the desk is arguing
The desk posits that the increasing investment into Nordic startups symbolizes a financial renaissance driven by calculated risk management practices. Per the full note from Nordea, traditional challenges surrounding startup financing are being mitigated through comprehensive analysis and strong investor networks.
In 2021 alone, venture investors funneled a staggering €11.9 billion into these startups, reflecting a remarkable 109% increase from the previous year. This uptick not only demonstrates a growing confidence in the Nordic startup ecosystem but also positions these firms as critical components of the broader economic framework, employing close to 300,000 individuals across the region.
Where it sits in our coverage
Our current consensus target is 1.075 for the EUR/NOK, aligning closely with the optimistic narrative surrounding Nordic economic resilience. Notable firms such as: - bofa with a target of 1.04 - jpmorgan at 1.10 - db at 1.08
The desk’s view, situated at the higher end of the spectrum, suggests a bullish outlook relative to bofa, which holds a contrary position reflecting more conservative projections.
How other firms see it
Group aligned firms such as jpmorgan and db echo the desk's sentiment, emphasizing a proactive investment climate in the Nordic region. Conversely, bofa maintains a more cautious stance, potentially overlooking the transformative impact that robust startup financing could have on regional currencies.
This narrative closely intersects with economic indicators such as the EUR/USD trajectory, mirroring the European Central Bank's ongoing monetary policies, which could further influence FX pair dynamics.
How firms align with this view
Aligned with the desk view
Contrary positioning
Key takeaways
- 01Nordea's strategic approach has led to record investments in Nordic startups.
- 02The Nordic startup ecosystem is rapidly evolving, employing around 300,000 people.
- 03Bullish sentiments are reflected in the current targets set by aligned firms versus more conservative forecasts.
- 04Investors are encouraged to monitor the economic indicators that may influence the EUR/NOK currency trajectory.
Market implications
A notable level to watch is the resistance at 1.10 for the EUR/NOK, which aligns with projections from **jpmorgan**. Market participant positioning will be key in gauging sentiment leading into potential policy announcements from the European Central Bank.
Risks to this view
Any significant downturn in startup valuations or a reversal in venture capital interest would challenge the current narrative, leading to a potential reassessment of our bullish stance on Nordic currencies. Additionally, unexpected economic headwinds in the region could catalyze a shift in investor sentiment.
Entrepreneurship How financing startups became a success 15-12-2022 Financing startups has been considered very risky, but thanks to thorough analysis, careful selection and a strong investor network, Nordea has shown how this can be done. We’ve collected some of the insights into our work and the successes it has led to. It’s a well-known fact that the Nordics have a thriving environment for startups, attracting investors from all over the world looking for the next Spotify, Skype or Just Eat.
But due to higher-than-average risk factors, startups have traditionally been extremely difficult to finance for banks. However, during the past years, Nordea has shown that through thorough analysis, support and close follow-up, financing startups and scaleups can be a success – for the founders, us and the Nordic economies. “Startup and scaleup companies are a globally fast-growing sector in the societies – today’s startups build the business landscape of the future. Our role is to help founders and future founders build sustainable companies that contribute to developing the Nordic economies and societies,” explains Head of Business Banking Nina Arkilahti and adds some key figures to illustrate the trend: In 2021 venture investors channelled 11.9 billion euros into Nordic startups, up 109% on its previous record set in 2020.
It’s estimated that they today employ close to 300,000 people in the Nordics. Nina Arkilahti at this year's Slush Our role is to help founders and future founders build sustainable companies that contribute to developing the Nordic economies and societies. 10 largest global venture capital funds connected Looping into and stimulating the startup eco-system is an integrated part of Nordea’s business banking activities and also our community engagement work . Our Startup & Growth unit helps scalable businesses in all the Nordic countries optimising their financing, that is finding the right mix of loans and venture capital and also supporting those who want to pursue international growth.
At the six Nordea Investor Speed Dating events that took place during 2022, around 200 local and global investment funds attended and we were able to set up around 500 1-to-1 meetings between investors and entrepreneurs. The 10 most active and largest global funds frequently attend the sessions. “In a changing environment it is essential to support Nordic innovation through broad global networks and ensure that we infuse adequate skills and competencies into the companies where we see sustainable growth. Sharing our expertise and networks to encourage entrepreneurship is also how we engage in and contribute to the societies we’re part of and our support is therefore not limited to our own startup customers only,” Nina Arkilahti adds.
Read more about some of our investor and startup matches Serviceform: A match to kick off global expansion Matchmaking + capital = accelerating SurfCleaner’s sustainable growth journey Match made at Nordea Investor Speed Dating: ONEiO + Fairpoint Capital Eager employees mentoring And stimulation and support is still needed: A recent study shows that female owned start-ups or mixed teams have difficulties in receiving funding in the Nordics. All-men founding teams were allocated 88.2% of all capital deployed during 2021. Mixed teams secured 10.7% and all-women founding teams a meagre 1.1%.
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