Nordic impact startups draw record investment despite market cooling
Impact startups in the Nordic and Baltic regions have bucked the trend by pulling in an increase in venture capital during 2024, a new report shows.
While venture capital investments in climate tech decreased globally in 2024, the Nordic and Baltic region seems to have moved in the opposite direction.
A new report from byFounders – a Copenhagen based VC firm – shows that impact startups in the "New Nordics" surged to record levels of €650m in 2024 – a robust 25 percent increase from €520m in 2023 and outpacing investments in other sectors.
The report, which was done in partnership with Crunchbase, shows that the total VC investment in early-stage startups in the region was €1.18b, a 6 percent increase from 2023.
That means ventures in impact sectors such as energy and climate, techbio and health now represent 55% of total funding volume across the region, up from 35 percent the previous year.
"The New Nordics early-stage VC market has stabilised, with a clear shift toward defensible, AI-driven sectors and a more selective funding environment. While global investor interest has declined slightly, top startups continue to attract substantial backing, highlighting the region’s resilience and growing maturity", byFounders writes in the report.
Energy and climate leading the way
Energy and climate was the biggest of those sectors with a total €347m in investments, fuelled by big rounds such as Swedish textile recycling company Syre raising €93m.
Sweden maintains its position as the region's powerhouse, leading with €455m in early-stage funding across 61 rounds.
However, it's the smaller nations that are punching above their weight, with Iceland and Denmark showing the highest invested capital per capita at €56 and €52, respectively.
Despite market uncertainties, B2B companies remain the dominant force, accounting for 83 percent of all funding rounds.
Investors are backing younger companies
The data also reveals an intriguing shift in investor behaviour, with venture capitalists increasingly backing younger companies. The median age of startups at Series A funding dropped markedly from 5.6 years in 2023 to 4.2 years in 2024, suggesting either faster company maturation or greater investor appetite for early-stage risk.
"Startups are reaching funding milestones slightly earlier in their journey," the report says.
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