Nordic startup funding – a deep dive into who funds whom

All male founding teams still get 92.9% of external capital in the Nordics, to build and expand their startups. However, a new report from Unconventional Ventures shows us how a shift towards a more equal distribution of capital can be accelerated. 

Unconventional Ventures is a Nordic early-stage investment firm that invest in scaleable tech startups at the pre-seed and seed stage with a focus on underrepresented founders.  Their report, a deep dive into the Nordic funding ecosystem, shows that gender iniquity is still at large.

Nora Bavey, General Partner at Unconventional Ventures, says in a press release:

“The data clearly shows that the more women that hold power to decide who to invest in – the more women will be invested in. This is something that has so far mostly been a feeling or a theory but now is something we can back up with data. This insight gives a fantastic opportunity to increase the pace towards more diverse portfolios.”

Female entrepreneurs get access to a fraction of the total available capital, and per investment made they only access 36 cents out of every – in men invested – Euro. They also have to spend roughly one month longer raising said capital. At the same time, they generate 45% more in revenue than their male peers.

More than 90% of capital goes to all male founders

During 2019 1.3% of capital in the Nordics went to all female founding teams, 5.8% was invested into mixed teams and the rest, a staggering 92.9%, went into teams with only male founders.

“Over the last four years, women have received 2.2% out of the total €9.1B invested into Nordic startups. As depressing as these numbers might seem, what they show is a huge investment opportunity in the Nordics. It is not and has never been a pipeline problem, ” says Nora Bavey.

Government funds and nonprofits offer best options for women entrepreneurs

For women founders seeking funding, the best odds are to look into public funds and nonprofits.  Within government-run and non-profit funding, 6.90% of total funding goes to female entrepreneurs.  This is followed closely by Crowdfunding, with 5.85% of total funding going to female-led teams.  Family offices also tend to skew slightly better at supporting women-run teams than traditional VCs, which make up 5.45% of their portfolios.

Arash Sangari, Program Manager at Tillväxtverket’s Startup Sweden, explains:

“We chose to partner with Unconventional Ventures on this report because we believe in the importance of making the data accessible. To be able to accomplish change we need to understand where and how we should focus our efforts to ensure maximal impact. The fact that we clearly see that more women on the investment teams lead to more women founders accessing capital is for me a typical example of one of those crucial insights.”

The report is based on data from Dealroom and covers 1733 startups with headquarters in the Nordics, founded during or after 2010, that have raised at least €0.2M in external capital between 2016-2020 (note that for 2020, only the first quarter has been included).  Rounds based on e.g. convertibles or debt have been excluded. The startups in the report are divided into three categories, which are based on the composition of gender in the founding teams: only men, only women and mixed teams. Currently, Dealroom taxonomy collects binary gender data, but will soon be expanded to be inclusive of other gender identities and beyond, for more accurate reporting.   The report was made in partnership with the Norwegian Venture Capital Association, UBS, Tillväxtverket and Startup Sweden.