Tracxn, a leading global SaaS-based market intelligence platform, has released its Geo Quarterly Report: Nordics Tech - Q3 2023. The report, based on Tracxn’s extensive database, provides insights into the Nordic Tech space.
Funding into the Nordic Tech startup ecosystem reached its peak in Q2 2021 after which, the funding started to decline till Q1 2023. Funding in 2023 has been experiencing a steady increase of more than 40% every quarter.
In Q3 2023, the Nordic Tech sector witnessed a total of $1.7 billion in funding, making it the highest-funded quarter in 2023. Multiple government initiatives and the need for innovative solutions in this region can be an accelerating factor for the growth in funding. Countries in this region, like Finland, are among the list of top places to work on a global scale, and also some of the top innovative countries
Nordic Tech startups witnessed total funding of $1.7 billion in Q3 2023, a growth of 41% from $1.2 billion raised in Q2 2023 and a decline of 52% compared with $3.6 billion raised in Q3 2022.
This growth in funding in this space is largely due to the sharp spike in late-stage investments from $739 million in Q2 2023 to $1.4 billion in Q3 2023, an increase of 89%. However, this is a drop of 44% compared with the $2.5 billion raised in the corresponding quarter last year (Q3 2022).
Early-stage funding worth $304 million was observed in the third quarter of the year, 7% lower than $327 million raised in Q2 2023, and a 68% decrease from $954 million in Q3 2022. This space attracted seed-stage investments worth $49.2 million in Q3 2023, which is a 46% fall from $91.5 million raised in Q2 2023 and 58% lower compared with $119 million in Q3 2022.
Energy Tech, Enterprise Applications and HealthTech are the top funded sectors in Q3 2023. The Energy Tech segment recorded total funding of $1.29 billion in Q3 2023, a massive increase of 98% compared with $652 million raised in Q2 2023.
Environment Tech and Life Science were the most affected segments in Q3 2023. Funding in the Environment Tech segment plunged from $132 million in Q2 2023 to $62.9 million in Q3 2023, a drop of 52%.
The Nordic Tech space has not witnessed any new Unicorns in 2023 so far. In terms of ticket size of rounds, only Northvolt has raised funding higher than $100 million throughout 2023, raising $1.2 billion in a Series D round in Q3 2023.
Further, only one company has gone public in Q3 2023, making it the first IPO from this sector this year. The number of acquisitions fell to 34 from 45 in the previous quarter and 48 in the corresponding quarter last year.
Comparing funding across cities, Stockholm accounted for more than 80% of the funds raised in the entire region. Companies headquartered in Stockholm attracted investments worth $1.4 billion, followed by those based in Copenhagen ($103 million) and Lyngby ($33 million).
