Sweden, a leading European innovation hub

Once primarily known as home to IKEA, Volvo and Ericsson, in the last 10 years, Sweden has transformed itself into one of the most valued European ecosystems. In a new report made in partnership with leading ecosystem builders including Startup Sweden, The Swedish Agency for Economic and Regional Growth, Swedish Institute, Business Sweden and Vinnova, we’ve taken a look at Sweden’s thriving startup ecosystem and funding landscape.

Sweden – an innovation hub

Sweden’s thriving ecosystem isn’t an overnight success, but a result of several factors that sparked business creation, such as a well-structured safety net consisting of free education and health care, favourable policies, and ecosystem builders that reinvest back to the community. 

On the VC funding front, the country’s startup ecosystem is backed by public funds and investments targeting startups as well as macro initiatives to create opportunities for innovators to flourish.

2021 – a record year

2021 was a record year for the Swedish ecosystem. VC investment more than doubled in the last year alone, hitting an all-time high of €7.8B. This rise in venture capital investment is due to the surge of megarounds, which accounted for 70% of all funding. Some of the largest deals included: Northvolt’s €2.5B Growth Equity, four funding rounds totalling €2.4B for Klarna, Polestar and Epidemic Sound Growth Equity rounds, and Kry’s €284M Series D.  

Swedish startups (founded since 1990) passed the €200B mark in 2021, up 2x since 2020. Within Europe, Sweden registered the fastest growth in enterprise value in both absolute and per capita terms.

The Nordic unicorn hub

Sweden is a fertile breeding ground for new tech unicorns. The country has minted 35 unicorns to date, an increase of 3.9x since 2016. The country also has strength in depth, with the 5th largest pool of potential future unicorns – companies valued between $250M and $1B – in Europe. 

Sweden is leading in impact investing in Europe and beyond

Sweden is a leader in impact investing, reflecting the country’s long tradition on a range of climate issues. Impact investing in Swedish startups has reached €4.3B in 2021, up from €1.3B in 2020, ahead of any other European and third on a global scale.

Learn more about how Sweden became one of the leading European innovation hubs by checking out our full report.