Venture Capital Statistics 2017
In 2017, formal venture capital (VC) investments in Swedish portfolio companies increased slightly. Foreign VC funds accounted for most of this increase. As previously, ICT and life science companies attracted most investment.
This statistical report gives details of formal venture capital investments in Swedish companies from 2007 to 2017. The statistics are based on data provided by the Swedish Private Equity & Venture Capital Association (SVCA) in collaboration with Invest Europe. A tripartite breakdown is used in the statistics: state (or government) venture capital funds; Swedish private VC funds; and, foreign VC funds. These statistics include the funds’ own assessments of the portfolio companies’ branch or sector (in broad categories) and development phase (seed, start-up, launch and expansion).
VC investments in Swedish portfolio companies somewhat larger in 2017
Since the peak year of 2008 (when almost SEK 5 billion was invested in Swedish portfolio companies), investment volumes have decreased. Over the past eight years (2010 – 2017), the average annual investment volume has been SEK 2.2 billion. The largest deviation from this average was in 2015 when only SEK 1.5 billion was invested. In 2017, VC investments in Swedish companies (in all phases) totalled SEK 2.39 billion, an increase of SEK 0.15 billion (+7%) on the previous year.
Increase entirely attributable to investments from foreign funds
In 2017, foreign funds accounted for 59% of total VC investments in Swedish companies. Thus, these invested more than Swedish private and state funds combined. Swedish state funds provided 25% of the total investments and Swedish private funds 16%. Foreign funds invested SEK 1,402 million, an increase of SEK 476 million (+51%) on the previous year. Swedish state funds invested SEK 598 million (-2%) and Swedish private funds invested SEK 390 million (-44%).
Over time, the trend is towards Swedish private investment decreasing while foreign investment is increasing (state investment remaining rather more stable). However, there is some variation from year to year. The state is the main investor in companies in the earliest phase (seed). Foreign VC funds have concentrated on the later phases.
ICT and life science continued to attract heaviest investment
As in all previous years, ICT (information and communication technology) and life science drew the heaviest investment. In 2017, 72% of the total investment volume was placed in portfolio companies in these two sectors. Compared to 2016, investment in ICT increased while investment in life sciences decreased.
This statistical analysis also examines VC investments in environmental technologies (cleantech). Broadly speaking, there remains little eagerness to invest in cleantech. Cleantech investments have decreased considerably since the peak year of 2008 (when SEK 700 million was invested). From 2007 to 2011, many Swedish private funds stated that they invested in cleantech. However, since 2013, it has primarily been state funds that have declared they have invested in cleantech companies. In 2017, SEK 73 million was invested in cleantech. This came solely from state and foreign players.
Increased investment in consumer products, services and retail
Breaking down investments on both a fund group and industry basis shows that, nominally, the greatest differences on the previous year were that: i) foreign funds invested SEK 227 million more in the consumer products, services and retail sector; ii) Swedish private funds invested SEK 210 million less in life science; and, iii) foreign funds invested SEK 120 more in ICT.
Clear major city concentration in venture capital investment
As regards Swedish state and private investments (of which, respectively, 98% and 66% could be identified), private venture capital shows a clear “major city concentration”. Only state funds invested in identified, portfolio companies in rural areas. However, as only a small part (31%) of foreign funds’ portfolio companies could be identified, no statements can be made on the geographical spread of their investments.