Bright future ahead for VC fundraising in the Nordics in 2024

As we look ahead, the Nordic region is poised for a bright future in venture capital (VC) fundraising in 2024. Several factors contribute to this optimistic outlook, making it an exciting time for both founders and investors.

Favourable economic environment

One key driver of an expected growth in VC investments is the anticipation of lower interest rates.

With borrowing costs decreasing, startups and scale-ups will find it more affordable to seek funding for their innovative ideas. Additionally, a lower inflation rate and a stronger Swedish currency will further bolster the investment climate, attracting both domestic and international investors.

Utilisation of uninvested capital

The year 2023 saw a significant decrease in VC investments, leaving many investors with substantial amounts of uninvested capital. This pent-up demand for investment opportunities is expected to drive a surge in funding during 2024, particularly in the second half of the year.

As the macroeconomic environment improves, investors will be eager to deploy their capital and support promising startups and scale-ups.

Recapitalisations and down-rounds

While some companies that received heavy funding in 2021 may face challenges, others with efficient business models will seek new investments to thrive and grow.

Startups with inefficient business models may struggle to attract investors and could face closure or acquisition. However, companies with proven business models can expect to see more recapitalisations and down-rounds in 2024.

As we approach the third and fourth quarters, there will likely be an increase in investments in seed-stage companies, creating opportunities for early-stage entrepreneurs.

Emerging trends

Artificial intelligence (AI) has been a hot sector in recent years, and this trend is expected to continue into 2024. However, there will be a shift in focus from large language models to real-world applications. AI will also face the challenge of addressing its current biases, for equity and diversity, as the industry strives for more inclusive and fair AI technologies.

In addition to AI, there have been promising indications of increased investments in companies working with business-to-business software-as-a-service (B2B SaaS) and the digitalisation of healthcare. These sectors present significant opportunities for founders and investors alike, as they tap into the growing demand for innovative solutions in business software and healthcare technology.

For more on trends in the tech sector more broadly, see Osborne Clarke's Technology, Media and Communications Annual Review 2024 and see our Insight for more on M&A trends in Scandinavia