Private equity and venture capital in Sweden

Written on 6 Feb 2018

Outlook for 2018

The private equity and venture capital outlook for Sweden in 2018 appears promising, with a strong continuing upturn in the economy. There is a large volume of capital in the market to be deployed by the large investment funds, institutional investors and smaller market players alike.

Overall, the Swedish private equity players appear to increasingly target technology and growth companies, shifting somewhat away from pure traditional buyout activity, spurred by the potential for high returns. Payments companies in particular continue to attract investors and increased private equity attention. In 2017, Nordic Capital Fund VIII notably sold Bambora Group AB to Ingenico Group (publ.) for EUR 1.5 billion, three years after the company’s market entry. Similarly, EQT’s acquisition of BlueStep Bank is indicative of the private equity market’s focus on the payments and private lending segment. Companies within the payments, loans and fin-tech sector with compelling market opportunities should also continue to attract private equity activity in 2018.

In 2017, a number of new venture capital funds for every investment stage raised money to tap the full potential of the market, including, Inventure and GP Bullhound. Besides that, family offices, corporates and private equity funds are entering the market with new money. A number of the large private equity funds, such as EQT and Triton Partners, raised money for new mid-market funds in 2017.

As regards the major venture capital funds operating in Sweden, there is a notable shift towards expanding their operations internationally. This includes establishing both new offices in Europe and the US, but also an increased number of investments in international companies. We view this primarily as a consequence of the ever growing fund sizes requiring them to look beyond the Nordic borders in order to deploy their capital. Conversely, Swedish growth companies are targeted by international venture funds with Index Ventures, Accel, Balderton, Inventures, Sunstone being very active.

Technology companies continue to score large investment amounts in the Swedish venture capital market. In 2017, the total amount of invested venture capital into technology companies in Sweden is estimated to be €1.1 billion. Companies within sectors such as SaaS, online retail, payments and gaming should continue to find funding in 2018. By way of example, payments and personal finance company Tink AB secured funds totalling SEK129 million from amongst others Nordea, SEB, Creades and Sunstone.

Lastly, the continuing strong Swedish economy and positive on-going market development promise a large number of financing rounds as well as a considerable number of exits in 2018. We expect to see several high-profile IPOs from tech companies during 2018.

Key Osborne Clarke Sweden deals in 2017

Although being a newly established player in Stockholm, Osborne Clarke Sweden has gained a strong position in venture capital legal advice. Since the Stockholm office’s establishment, we have worked on several international investments together with colleagues in Munich, London and Paris, including EQT Ventures investment in NaturalCycles.

Other notably deals in the Swedish private equity and venture capital market include:

  • Öhman Group and Nordic Capital’s takeover bid of Nordnet AB (publ).
  • EQT Fund V Limited’s divestment of AcadeMedia AB (publ).
  • Nordic Capital’s purchase of Ryds Bilglas AB
  • Accel, Index Ventures, Creandum and Project A’s €20 million investment in Kry AB
  • EQT Ventures’ €22 million investment in Min Doktor AB
  • EQT Mid Market Europe’s investment in Epidemic Sound for an undisclosed amount