NORDIC STARTUP FUNDING
Through the Lens of Gender Diversity
September 2019
Foreword
In the Nordics we are proud of our high level of equality.
Our unique welfare and educational systems create the optimal playground for new innovation to evolve and solve big problems. Some of them we have already proven, with the high number of unicorns per capita. There has never been greater entrepreneurship activity in the Nordics as of today.
But are we making the most out of the situation? The key ingredient in creating and building groundbreaking innovations is the people. Research has again and again proven that diversity, particularly gender diversity, is directly linked to innovation as well as financial performance. This goes for startups as well as big corporates. In order for these new innovations to come to work, evolve and grow – capital is needed.
As this report demonstrates, not everyone is given access to that capital: of the 2bn euro of venture capital invested in 2018 in the Nordics, 88% went to all all-male founder teams, 11% to mixed gender teams and 1% to all-female founder teams.
The Data
In this report we are going to dig deep into these numbers.
We are going to show you amounts of capital, number of investment rounds, in a snapshot and over time. We are looking at the average deal sizes and proportions in investment ranges - all through the lens of gender diversity. This gives us a better understanding of what is happening, when it is happening and tell us something about the trends. To complement the data – we have reached out to various investors and ecosystem players to get their insights and reflections. This has resulted in over 30 insights and reflections that complement the data analysis.
We have incorporated a section from Diversity VCs 2018 female founders report to further complement the findings as well as Atomico's 2018 State of European Tech Report to enrich our findings on diversity and inclusion in startups.
Future looks bright
When you start reading and exploring the data, the numbers may seem not so optimistic, the purpose is to raise awareness, to start having a conversation. For you as an investor or policy maker – what this data represents is a huge business opportunity. It will require a lot of work for some investors, others are already full speed ahead, targeting underrepresented founders because they (we) see an incredible investment opportunity. Investing in startups and funding tomorrow's change makers is about finding that unique high performing 1% of people, why not source from the untapped pool.
We are already seeing the wave of female led unicorns in the US and we believe this wave will hit the Nordics as well. It will require pioneers and investors taking new and unconventional paths, but it will come.
Thank You
Thank you Dealroom, from the first outreach you were up for the challenge and you have been constantly advancing the data insights, making these data points unprecedented in a Nordic context. A warm thank you to our partners who have chosen to back this project with knowledge, resources and support.
Thanks to Lego Ventures who want to increase creativity through diversity. Thanks to the financial institutions and national investment funds Danske Bank, DNB, Almi Invest and Vaekstfonden for backing this report. You all want to see a change in the flow of capital both from a societal impact perspective to the business opportunity side.
Thank you Diversity VC and Norwegian Venture Capital Association who has a profound interest in changing the status quo and who has been supporting the formation for this report from the very beginning.
Thank you Backstage Capital, Jane VC and Nordic Web – who are all changing the face of Venture Capital for supporting and being generous with your expertise and network.
Thank you to all our reflection givers. diversity and funding discussions can feel uncomfortable, taken out of context, misinterpreted. Talking about unconscious bias and our own structures standing in the way of positive change can be difficult, particularly when moving into the heart of the issues. Thank you for putting yourself out there bravely and sharing your thoughts with us in this report.
This report is an important step toward creating transparency. What gets measured, gets “funded”.
Enjoy the exploration!
// Thea
Thea Messel
Founder & MP
Unconventional Ventures
“
"As a child of Indian Immigrants, and grandchild of Sindhi refugees I was always acutely aware of my 'otherness' at a very young age. Born in New York City, I am now an American expat living in Denmark, a privilege my family afforded me.
Intersectionality and social inhertiance play a large role in why many people of color, females, all those who have been marginalised by society by assigning these unwanted labels to their identity, don't even try their hand as founders, at entrepreneurship. They start far behind the starting line of that race. The flip side of the coin is that adverse conditions force you to find resources, strength and creativity inside yourself you never knew existed or even possible. I believe this is one of the many reasons diverse teams and founders do well when they finally receive the funding they need, they had to work very hard for it, so they understand it's value.
I like to think of it as the David and Goliath phenomena Malcolm Gladwell speaks about.
As founder, I started later in my life because of the number of social barriers I had to break through as a woman and now I do the same as investor. This is the case for many 'founders to be' from ethnically diverse backgrounds, they lack the social capital needed to open necessary doors to even get started. The odds are stacked against them, and we need to recognize and be aware of that within the start-up ecosystem.
As investors, we not only have a responsibility to empower their potential, but as UV demonstrates in this report, it's just good business."
Founder of Bloom VR Therapy,
Report Co-author
Tina Israni
Executive Summary
Key Findings
Last year, 88% of Nordic VC capital went to founding teams with no women. Data shows that the vast majority of VC investments are made into all-male teams. In 2018, all female teams constituted just 1.4% of deals and mixed gender teams made up only 11%.
For every 1 euro of VC investment in the Nordics, all-female founders get less than 2 cents. All-male founding teams get 88 cents while mixed teams get 11 cents, and of this, all-female only teams get 1.4 cent.
The amounts of capital backing mixed teams are raising. Over the last 5 years, deals with all-female teams have been steady hovering around 1-3%. For mixed gender teams however we see a great rise the last two years from 7%-recording 18% if the projections for 2019 holds.
Proportion of deals going to female founders declines from seed to early stage VC, then something happens! The number of deals going to female founders drops from 18% at the seed stage to 8%in the early VC stage, 5-10 million Euro. But after Early stage towards later stage the proportion of women led companies increases drastically from 8% to 17%.
Female founders uses more creative sources of funding.
All female founders raises proportionally 4x more from crowdfunding than any other team compositions.
Family offices funds proportionally all male teams 6x more than mixed and all female teams across the Nordics.
On average, the Nordics have funded more founding teams with at least one female founder than most European countries. The Nordic Average 14%. Might be due to more gender equality in the Nordics compared to the rest of Europe.
That said, the Nordics lag behind the US on the amount of capital that is invested in female founding teams. In 2017, female founders in America received just 2% of venture capital dollars. Despite this funding gap, a 2018 study by Boston Consulting Group found that women-founded startups produce twice the revenue.
Why don't Nordics VCs invest more in teams with female founders? To answer the question, one must look at three parts of the investment funnel:
The way forward
1. Invest in more diverse founding teams given the compelling performance data. It's not just about democratizing access to funding but it's just good business.
2. Empower women to apply their intellectual capital within the startup space. Important with role models within the startup space that are relatable as well as access communities of female investors that they might not otherwise have access to in their personal network.
3. Create transparency around the performance and role of companies founded by diverse teams. Gather more data sets on diverse teams to create transparency and dispel myths / stereotypes on diverse persons roles and performance in startups.
This report looks at the representation of gender diversity within the founding teams that receive VC investment. To get the clearest answer, we have studied pre-existing public deal data from Dealroom.co database and framed it within the wider European context using both Atomico's report on the '2018 The State of European Tech' as well as DiversityVC's 'Female Founders Report'. In addition we have stitched in findings from Jane VC’s Early Stage Founder Survey as well as 2018 study by BCG reviewing 5 years of investment and revenue data on female founders.
Overview
In 2018, 2.3 bn euro was invested into Nordic Startups. VC is an influential industry and venture capital is a crucial enabler for developing and growing great technology companies that positively can impact society. They are viewed as the leading edge, and as such it matters who is part of the industry.
6:2 - Unconventional Ventures and Dealroom have shown that far less capital per round in Female only teams as compared to other teams. Mixed teams land 9.4% of deals but raise 10.5% of the capital All female founding teams land 6% of deals but only get 2% of the capital.
Smaller check, shorter runway, constantly fundraising.
The female founder penalty. All female teams get smaller average checks, 80% of the all male and mixed in the seed round. In later rounds these differences increase to 57% of all male average deals and 69% of the average mixed team size. Teams with at least one female founder are raising more often than all males teams. What this means is that these teams know how to run twice as fast while constant fundraising.
There aren't enough female founders. That may be true for a number of reasons, but it doesn't explain away the lack of capital for the ones who do found companies. Female founders get 1/3 pr. deal on average in contrast to all male teams who get proportionally 1/1.
Female founders don't play in opportunity industries.
If that were true, they are still playing in industries that produce twice the revenue. For example Femtech is on the rise to $50 Billion by 2025.
Report Leads
Report Partners
Report Methodology
The data used to form this report is compiled form Delaroom.co's own database. Dealroom is the most comprehensive database covering funding data in Europe.
The data in Dealroom's database consists of:
Dealroom is used by professional investors, corporates and local governments. Dealroom has tracked almost 6,000 deals in 2018 for Europe, triple the sample size of other similar databases (70%+). Dealroom is utilized by NYTimes, Bloomberg, Reuters, The Economist, Forbes, BBC, TechCrunch, BusinessInsider, European Commision, Google and more.
About the data sample that is used to conduct this report:
"The Nordic ecosystem is home to some 14,000 startups spread across 5 countries, all ranking among the top 10 European countries by GDP per capita. This makes the diversity in the system important not only for the countries themselves, but also for the rest of Europe. The data around diversity becomes crucial for understanding both the current state and the drive for future actions."
Research Analyst at DealRoom
Report Partner
Gligor Micajkov
Nordic Context
Individually, the contributions that Denmark, Norway, Sweden, Finland and Iceland have made to the Internet and technology are extremely impressive.
However, combined together as a region, their achievements are nothing short of mind-blowing, and made even more notable when you consider that even with five countries, the total population only stands at 27 million. The Nordics is the birthplace of C++, Ruby on Rails, Linux, the foundations of Web 2.0. Not only that, but the region is also the origin of billion dollar companies such as Spotify, Supercell, Skype, King, Zendesk, Rovio, iZettle, Mojang and Just-Eat.
In fact, outside of Silicon Valley, there are very few regions globally who consistently return VC investment quite like the Nordics does. And that's before we've even mentioned the likes of Unity, Klarna, Truecaller, Tradeshift and Trustpilot, companies above or around a billion dollar valuation who look set to exit in the next couple of years.
The consequences of this is that even with a history as rich in success stories as the Nordics have, the best days are still to come. The entrepreneurs, early employees and investors who've experienced success before are now beginning to reinvest their time, money and resource into the next generation of Nordic startup success stories.
Thriving startup ecosystems now exist in all Nordic countries and investment continues to flow into the region, as Nordic entrepreneurs continue to build the future.
- NEIL S. MURRAY
Founding Partner of The Nordic Web Ventures
"There are market based evidence that diverse teams improves performance and reduces risk. So we are encouraging founders and investors to be aware of the existing gender bias in the startup ecosystem and to put it on the agenda in the companies they run or are investing in, simply because it is good business.
This analysis continues to document a diversity problem in the startup ecosystem that we are aware of. It’s a problem within the investment space, but also within the salary-domain.
Spring this year we launched a “Nordic startup salary report” and one of the clear conclusions were that women are getting less salary than men when working in a startup – across company size, positions and experience"
Head of Wealth Management at Danske Bank
Report Partner
Berit Behring
Untapped Resource:
Intellectual Capital of Women
NORDIC REGION
"As countries struggle to respond to economic, environmental and social transformations – including technological advances, climate change and migration – intellectual capital has become the most valuable asset of our time."
Education @ a glance 2019, OECD indicators
GLOBAL TRENDS
Policy focus on access to education
Governments are increasingly looking to international comparisons of education opportunities and outcomes as they develop policies to help mobilize resources, while enhancing individuals’ social and economic prospects against backdrop of SDG 2030.
Closing the gender education gap in favor of women
While tertiary attainment has risen for both younger men and younger women between 2008 and 2018 across OECD countries, the gender gap in favor of women has widened from 9 percentage points in 2008 to 12 percentage points in 2018...yet the employment and pay gaps for women remain.
87%
of Health and Welfare graduates in Denmark are women.
1 2
in Finland are educated up to a tertiary level as of 2018.
Women in Norway with an equivalent tertiary level of education to their male counterparts recieve 1/4 less in pay.
75%
WOMEN
in
"I don't think there's a lack of strong
ambitious female founders, but I do think there has been a lack of female investment partners and, with that, fewer investments made into
female-led businesses.
I see this as an untapped business
opportunity and I am personally a proud backer of 19 female founders."
Atomico Partner and Angel
Sophia Bendz
“
“
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FINLAND
NORDIC FY 2018
SWEDEN
DENMARK
“I’m so happy that finally this data is made transparent to the ecosystem - there is so much room to improve! We here in the Nordics claim to have the worlds most equal society, but as a whole, in reality, we are lacking diversity both among startups funded and VC investors in all aspects, not just gender. But it’s not easy and we need more role models - brave entrepreneurs and investors. My passion has always been to open up doors and help new talent, and I will continue to do so in the future. Always”
Managing Partner Voima Ventures
Inka Mero
Capital Raised in the Nordics
Nordic Capital Raise by Gender | Snapshot 2018
In the Nordics 11.8% of the funding went to teams having at least one female founder.
All female founder teams raised 1.4% of the total capital raised in the Nordic region for 2018.
In Finland 6% of the funding went to teams having at least one female founder. All female founder teams raised 1% of the total capital raised in the Finland in 2018.
In Sweden 18% of the funding went to teams having at least one female founder. All female founder teams raised 2% of the total capital raised in Sweden in 2018.
In Iceland 7% of the funding went to teams having at least one female founder. All female founder teams raised 3% of the total capital raised in the Iceland 2018.
In Denmark 2% of the funding went to teams having at least one female founder. All female founder teams raised 1% of the total capital raised in Denmark in 2018.
Capital Raised 2018 Finland
Capital Raised 2018 Sweden
Capital Raised 2018 Iceland
Capital Raised 2018 Denmark
Capital Raised 2018 Norway
In Norway 20% of the funding went to teams having at least one female founder. All female founder teams raised 1% of the total capital raised in Norway in 2018.
"About half of my investments are in start-ups with a strong female lead – there are plenty of good projects with great market fit, and women do know how to sell. Female founders play a hard balancing game and it makes them exceptionally focused on doing the right things and applying their time and skills wisely."
Managing Partner of Technorocks
Silvija Seres
“
"First of all, it is very encouraging to see Norway leading the way with mixed teams. Diversity in teams has long been championed as key to improving performance and decision-making, so this is good news.
This report proves that the recent report and action plan from the Norwegian government to promote women in entrepreneurship is not a day too early. I am sure there is an untapped potential here, and for investors, seeing this should be yet another wake-up call.
At the NVCA we're also working to promote more women on investment teams in the VC/PE-industry, which I think is another important part of improving the diversity among the companies aiming to become tomorrow's solutions, employers and leaders."
CEO, Norwegian Venture Capital Association
Report Partner
Rikke Eckhoff Høvding
"Diversity brings different perspectives to the table. Having a mix of different genders, ages, cultural and educational backgrounds, we are better prepared to evaluate investment opportunities. Our dealflow is also change as we diversify our own team. There is clearly money to be made through diversity. And I wish more LPs start demanding venture capitalists to be the change they want to see in the industry."
Partner @ Inventure
Ekaterina Gianell
“
Nordic Capital vs. Rounds
Female only teams get a lot less capital per round as compared to male and mixed teams .
Mixed teams land 9.4% of deals but raise 10.4% of the capital. All female Founder teams land 6% of deals but only get 2% of the capital.
FINLAND
NORDIC FY 2015-2018
SWEDEN
ICELAND
DENMARK
NORWAY
Rounds
Funding
"The world looks to the nordics for startups, a powerful breeding ground for successAs countries champion of gender equality, the success stories of women founders are beginning to be numerous, combining an impact model and profitability such as To good to go, karma, easy size or engaging care. The Time has come for European investors to pay attention to them"
CEO 50inTech
Caroline Ramade
“
The Right Company to Work
For, The one and ONLY
The Right Company to Work
For, The one and ONLY
"At Fast Track Malmö 89% of our investments last year had at least one female co-founder. We are incredibly proud of these figures.
We believe that diverse teams solve more important problems and ultimately offer better returns for our fund. Diversity is not something that happens by chance. We have actively worked on improving our methods of reducing biases and making our processes fairer.This has led to us making better investments overall."
Head of accelerator at Fast Track Malmö
Heidi Lindvall
"If we cannot find or properly assess female founded businesses, we will be missing out on a part of the pool of potential investments. A good start is to have a good gender mix on the investment professional side, and we are happy to have a majority of female investors at Norrsken.”
The Chief Investment Officer, Norrsken Foundation
Tove Larsson
“
"It's not a numbers game, more women is a simplistic view on diversity. It's about challenging the old way of doing business and traditional leadership styles. We face climate change and the toxic global inequalities tearing the fabric of society and to me it's obvious that we all need to work towards a paradigm shift and rethink the values of business."
Columnist SvD, investor and techdiplomat
Aurore Belfrage
The Right Company to Work
For, The one and ONLY
The Right Company to Work
For, The one and ONLY
"The data is on the table, now it’s time to empower women.
We have to look at female ownership, entrepreneurship and funding as a blockchain. Make sure we raise awareness on the companies females build and the possibilities that follows for growth. Share knowledge on how to pitch to get the right funding, confront unconscious bias and showcase the successes of previous female lead investment opportunities."
Feminvest
Michaela Berglund
"5 years ago it wasn’t that easy finding female founders but just in the last 2-3 years it has changed drastically. At our Startup Sweden accelerator programs and meetups that we organize more than 60% are women. I really do not see a pipeline issue here. There are a lot of great female founders out there but we have to become better in providing the right platforms and making the right intros to Investors to higher the chances of funding. Network is the key to success!"
Project Manager, Start-up Sweden
Tatjana Choudhary
Capital Raised vs Rounds
Capital Raise Trends
Across all countries funding mixed gender teams is on the rise with Finland taking the lead in capital raises having at least 1 female founder.
Female only teams are least funded hovering between 0 - 5% over the last 5 years with the exception Iceland which in 2016 hit an all-time high of 27%. Across all countries however funding for male only teams is on the decline with the except of Sweden this year 2019 (Q2).
FINLAND
NORDIC FY 2015-2019
SWEDEN
ICELAND
DENMARK
NORWAY
2015
2016
2017
2018
2019
“
"The majority of my investments have female founders in the team. In my job, I meet amazing entrepreneurs and investors every day, and I am excited to see the increasing number of women with various backgrounds and ages coming into this space in the last coupe of years. If we want to compete on the global market, we need to attract all the talent we can. I am optimistic and hopeful that the statistics will look even better in the near future. But change doesn’t happened by itself. We need to continue attracting and including women to the entrepreneur community to stay competitives."
Angel Investor & Board member Propel Capital
Anna Ljunbergh
"The report is an important reminder that the startup world urgently has to focus on diversity to build the best companies with the best talents to solve the most important problems. Minc, the startup house in Malmö, targets to reach a point where as many male and female founders gets VC-funding.
Our annual event Nordic Female Investor Meetup pinpoints the issues and encourages more female founders and more women to get into angel investing"
CEO of Minc heading Nordic Female Investor Meetup
Jeanette Minc
Principal, Firstminute capital
Lina Wenner
"At firstminute we have a 50:50 male-female investment team, which has helped attract more female founders. That said, we're acutely aware of the gender funding gap, and the majority of our inbound deal flow continues to consist of male-dominated founding teams. Personally, I look to invest in people for whom gender diversity is a priority from the very beginning; not only at founder level, but across the entire team."
“LEGO Ventures is proud to support the report into gender diversity within Nordic Startup Funding. The results speak for themselves, and LEGO Ventures will carry through the core LEGO brand values of diversity and inclusion into our investment strategy. After all, creativity, play and innovation are gender agnostic in their very nature!”
Managing Partner Lego Ventures
Report Partner
Alexis Horowitz-Burdick
“
The Right Company to Work
For, The one and ONLY
The Right Company to Work
For, The one and ONLY
"Every challenge I look at, I see an opportunity for change and growth. What I love about this data, even though they are not as great as we wish them to be, is that they exist. Few years back we didn’t have access to this information. So this makes a strong case to highlight the market opportunity and to also push investors to challenge themselves to look for investments in untapped places! The data will lead to action, action and more action!"
CMO Watty, Co-founder SUP46 Femtech
Maral Kalajian
"Beyond inequality, what the funding gap represents is untapped opportunity. It’s surprising the situation hasn’t improved more, considering the significant body of evidence that diverse founder teams and women in leadership deliver stronger results. While the conversation has been ongoing for a while, change is happening slowly. In order to get where we want to be, we need pioneers who can take charge and lead with actions, not just words."
Manager, Marketing & Community, ByFounders
Ida Åsle
% of deals by funding stage
0-1 M
1-5 M
5-10 M
10-25 M
25- M
NORDIC FY 2015-2019
FINLAND
SWEDEN
ICELAND
DENMARK
NORWAY
13.1%
Average
10.7%
Average
14.3%
Average
6.8%
Average
7,3%
Average
31.8%
Average
In the Nordics, most deals made with at least one female member in the founding team are at the seed stage. Deals with these types of teams decline moving into early stage VC. That said there is an interesting upward swing of companies that make it at later stage VC funding of 25+M (Euro).
”There is much evidence already that diverse teams perform better. Therefore, it is encouraging to see that investments in mixed gender teams is on the rise across the Nordics - even though we see a setback in Denmark. It underlines how we as investors need to overcome unconscious biases and be able to truly value diversity.
At Vaekstfonden, we are working to reinforce this mindset and across our portfolio, 16 per cent of companies have female founders on the team. Our ambitions are higher though. We see a great opportunity to unleash more potential from diversity, so we seek to engage with all relevant players in the ecosystem to raise awareness.”
CEO, The Danish Growth Fund,- Vækstfonden
Report Partner
Rolf Kjærgaard
"Since moving from San Francisco to Europe, I have consistently had people tell me that the Nordics are exceptionally female friendly, with many female founders and a supportive VC ecosystem. I was surprised to see the investment in female led startups actually lags the US.
I personally see so much opportunity in the Nordics, and serving these female founders is a priority for Jane VC. I’m excited that other investors like Unconventional Ventures, Backstage, Nordic Web also see the opportunity and are paving the way for change.
One of the most concerning stats in this study is how female founders in the Nordics raise less capital on average and raise more often. Piecing together small checks through continual fundraising is a huge penalty for female founders. We saw a similar dynamic in Jane VC’s survey of over 500 early stage founders in the US and Europe, published earlier this year.
For every $1.00 that a male founder raises, a female founder raises $0.37 and a black female founder raises $0.02. What this means in practice is that the average male founder has a team, an office and some runway to experiment. In contrast, the average female founder is doing most of it herself. She is running a business while fundraising without a team to support her, and she doesn’t have any leeway for a pivot."
Co-founder and Partner, Jane VC
Report Partner
Maren Thomas Bannon
"These numbers regrettably confirm that there is a large financial gender gap, even in the Nordics where there is a supposedly high level of gender equality and equal opportunities (for men and women). However, the increase in the share of mixed investment teams is promising.
As an investor, if you believe that the consumers and end clients are 50/50 male and female, and that talent is evenly distributed, you should take this into account and require the companies you invest in to be more diverse. Why invest in somebody who identifies with only half of the client base and taps only half of the talent base?
In our experience, gender bias is to a large extent unconscious bias.
That means that you can make changes quite easily through awareness and structured processes. Investment criteria and investment processes can be a driving force.
It would be interesting to see the numbers showing the gender composition of the investment teams investing in these companies... How diverse are they? Could making sure that there are both men and women on the investment teams be a good start? Why not set mixed teams in the target companies as an investment criterion as well? If we want to make a real difference, we have to change the way we invest!"
Group Executive Vice President,
Corporate Banking DNB
Report Partner
Benedicte Schilbred Fasmer
Deal Size
Average Round Size
Stage comparison
Female only teams are the least funded when it comes to the size of seed deals. This trend carries forward into early stage / series A round size with Denmark funding females the least Series A and up with not enough funding from seed to series A, this can inhibit the success of many female owned companies.
"The Nordic landscape is one that, across industry, Government and policy, has been put on a pedestal of progress and equality. This latest report suggests that there is room for improvement when it comes to the diversity (in this case, primarily gender has been covered) of investments and people making the investments. This suggests that there is a lot of opportunity for returns where talent is being untapped and undervalued.
The Boston Consulting Group's research from 2018 showed that teams with diverse management were 19% more revenue due to innovation these teams create. We also know that privately held, women led companies who take on investment are more efficient with the funding received- The Kauffman Foundation found that these companies achieve 12% higher returns on investments than startups run by men. With further intersectional and representative diversities, companies are more likely to solve for diverse audiences, create diverse teams, and provide higher returns. This is a space that has room for a lot of opportunity and it's exciting that Unconventional Ventures are leading the way.."
CEO 23 Code Street
& Director Backstage Capital London
Anisah Osman Britton
"There's been statistical evidence for so many years showing that diverse teams improve performance, but for the industry to ignore this fact is nothing else than saying no to potential return. I think that we will very shortly see LP's moving their capital to funds that have the teams and methods with the ability to identify founders beyond cognitive biases."
Founding Partner of BackingMinds VC
Sara Wimmercranz
"The oft-quoted 'pipeline problem' doesn't exist. Of the companies we've taken a second meeting with, close to 50% have had a female founder. And from the 19 investments we've made across the Nordics over the last 2 years, 8 have had a female co-founder. Amazing female founders do exist in the Nordics, you just have to find them."
Founding Partner of The Nordic Web Ventures
Neil S. Murray
"I think everyone suffers from unconscious bias and as a VC it’s you’re responsibility to be aware of that.
Studies show that female founders get questions about the risks of the venture and that men are asked about the potential.
As a VC you always need to bear in my mind what type of questions you ask. It’s not until we “assess” female and male entrepreneurs equally that we will have a more equal flow of VC money."
Investment Director, Inventure
Tatiana Shalalvand
Time to next round of funding
Female and Mixed teams tend to raise more often within less than a year with the exception of Sweden.
FINLAND
NORDIC SNAPSHOT FY 2018
SWEDEN
ICELAND
DENMARK
NORWAY
Sources of Funding
Nordic Snapshot of Funding Sources
Females only teams use more diverse sources of funding.
Female only teams have to really on more creative means of funding, with corporate funds and accelerators in DK.
Like the Mixed teams, Male teams are funded most by investment funds and second corporate funds. (Iceland is an outlier).
All Female
All Male
Mixed
FINLAND
NORDIC SNAPSHOT FY 2018
SWEDEN
ICELAND
DENMARK
NORWAY
"One of the key obstacles faced by female founders is the incredibly outdated and frankly ridiculous perception that women can't do tech, or are simply not interested in it.
Recent studies have shown that obstacles begin to emerge for women as early as high school, when girls are either implicitly or explicitly discouraged from pursuing technical subjects. We all know that it’s difficult to imagine what you can’t clearly visualize, or have never experienced.
I therefore actively look to meet startups with technical female founders and have organised events where we aim to shine the light on inspiring women who have built a career in technology, as well as women in investment and venture capital. If we increase the presence of women in the higher ranks of our ecosystem so as to create new role models for future generations, while actively curating a pipeline of female founders, we hope to be part of the change we want to see."
Partner & Chief Investment Officer
Wellstreet VC
Jessica Dick
The Right Company to Work
For, The one and ONLY
The Right Company to Work
For, The one and ONLY
"Diversity is our strength if we are to solve the world’s challenges. It's our obligation to invest into diverse Founders to ensure that we represent the world we live in."
CEO, The Indext Project
Liza Chong
"To us, diversity is a key success factor and something we actively look for and promote."
The Chief Investment Officer, Norrsken Foundation
Tove Larsson
The good news
The Nordics slightly outperform #1
When reviewing share of companies with more that 0.2M Euros in funding, we can see teams with at least 1 female founder make up 20% in Iceland vs. 10% in Denmark.
Iceland
Norway
Sweden
Nordics
Germany
France
Finland
Netherlands
Belgium
Denmark
The Nordics slightly outperform #2
The Nordics slightly outperform again on funding mixed or female only teams at 14% vs other European countries listed here in the Nordics Denmark and Finland have the highest potential on diversity.
Iceland
Norway
Sweden
Nordics
Germany
France
Finland
Netherlands
Belgium
Denmark
The Right Company to Work
For, The one and ONLY
The Right Company to Work
For, The one and ONLY
"Nordic Tech has seen more success stories than other European countries in the last 2 years, as far as unicorns go. Klarna and Natural Cycles have the chance of producing the next generation of talent. We see more role models of diverse founders, and hopefully this encourages more to follow their footsteps."
Investor, DawnCapital
Sarah Nöckel
"For a long time already, we’ve considered ourselves forerunners of equality here in the Nordics. However, it's quite devastating and worrying what the data actually reveals. We still have so much work to do. Now is the time for us to wake up, roll up our sleeves and start working rigorously to fix this."
Founder of Inklusiiv
Katja Toropainen
Top Industries with at least 1 female founder
health
enterprise
software
media
education
fintech
gaming
marketing
food
fashion
energy
sports
wellness beauty
iot internetofthings
Health and SaaS industries dominate most female only and mixed team founded companies.
"We’ve found that the key to be an inclusive VC, since we are Swedens most active startup investor, is to work actively with the recruitment of female Investment Managers 38% females, but also have diversity in the management group, 54% females. We’ve seen results in the past three years going from 6% female founders getting founded to 10% 2018. We’ve also raised the qoute of mixed team from 15% 2016 to 19% 2018, that sums up to 29 % of female founders or mixed team getting founded 2018, but there is still room for improvement.
We always try to meet with female founders early and also support female founders events and female investor meetings. It’s all about tapping into the networks and be aware of the importance of diversity in startup team for the later success. We try to influence the founders on how to develop their teams, based on a team analysis built on research and our experience."
CEO Almi Invest
Report Partner
Mikael Karlsson
"By acknowledging where the venture capital industry is right now, this report demonstrates just how much room there is to grow and improve.
We can’t dream big about a more inclusive future if we can’t see the scale and scope of the issue today."
Founder of #movingforward
Ginny Fahs
Diversity in European Tech
State of European Tech is an annual report covering the European tech ecosystem. Besides looking at funding, technology developments and growth rates – the report covers diversity and inclusive insights that brings further interesting learnings.
Discrimination in the
European tech industry
The industry's perception of its own inclusiveness is undermined by what survey respondents shared about their individual experiences of discrimination while working in European tech. 46% of women state that they have experienced discrimination.
Content provided by State of Euroepan Tech 2018, Atomico, link to survey
Central European & Baltics
DACH
Eastern Europe
France & Benelux
Nordics
Southern Europe
UK & Irealnd
While Gender discrimination is the easiest to quantify, there are other forms that exist in Europe
Discrimination based on gender might be the most visible and quantifiable, but it is not the only form of discrimination that exists at worrying levels in the European tech ecosystem.
A meaningful number of respondents have experienced discrimination based on age and ethnicity too. The survey can't accurately quantify the level of discrimination based on disability or sexual orientation, but the data points to these being very prevalent here too.
Content provided by State of Euroepan Tech 2018, Atomico, link to survey
Age
Gender
Sexual Orientation
Ethnicity
Disability
Religion
Race discrimination continues to be a barrier
Race discrimination continues to be a barrier to entry within the tech ecosystem and startup community within Europe. This is exemplified by the fact that people of Black, African or Caribbean ethnicity who are working in the European tech ecosystem are more likely to have experienced discrimination than not.
Content provided by State of Euroepan Tech 2018, Atomico, link to survey
Asian
Black / African / Carribbean
Mixed/ Multiple
Other
White
Awareness of this discriminating behavior has led to positive changes by both genders
While creating awareness of conscious and unconscious biases, the State of European tech survey respondents here were asked whether they changed their behavior as result of being made aware.
Content provided by State of Euroepan Tech 2018, Atomico, link to survey
Female
Male
Insights from the U.K VC industry
Lower proportion of female only teams have warm introductions to VCs, than mixed or male teams
30% of all female teams have warm introductions to funds with only male decion makers compared to 45% for mixed teams and 46% for all male teams.
38% of all female teams have warm introductions to funds with female decision makers compared to 38% for mixed teams and 40% for all male teams.
Content provided by Diversity VC, report on Female Founders link to report
All female
Mixed
All male
"Studies show that warm intro’s are better than cold. I always try to meet with female founders – even if it’s too early for us to invest – so I at least can help them with warm intros.
The least I can do is to be generous with my network."
"There’s a knowledge asymmetry when it comes to funding. Women don’t have the same network and therefore the same insight and knowledge in how you can fund your company. Female founder events are critical in that regard – it gives them network and hopefully new knowledge on how you can fundraise"
Investment Director, Inventure
Tatiana Shalalvand
All female and mixed teams get less benefit from a warm introduction than male teams
Content provided by Diversity VC, report on Female Founders link to report
A warm introduction means a team is much more likely to get funded at IC. Taking all warm introductions together this benefit is 2.1x.
This explains why mixed genderteams fall from 20% of pitchdecks to 15% of funded IC decisions – almost all teams receiving funding at IC come in warm.
All-female teams see a benefit of 1.8x, similar to all-male teams at 2.1x. However, mixed gender teams fare worse with benefit of only 1.5x.
benefit from warm introductions
Warm all-female
Warm mixed-gender
Warm all-male
1.8x
benefit from warm introductions
1.5x
benefit from warm introductions
2.1x
All female teams are more likely to make contact with funds with a female decision maker
This chart is a gender breakdown of pitchdecks by fund decision makers.
n=165
n=2,451
n=663
Content provided by Diversity VC, report on Female Founders link to report
All female
Mixed
All male
The Way Forward
Our mandate, is to invest in diverse founding teams.
2.5x
Women-founded or
co-founded companies outperform all-male led companies (BCG June 2018)
Unexplored market potential: for example, Femtech is to become a 50 Billion USD market by 2025.
Diverse teams outperform homogenous teams in revenue from innovation by 45% (BCG Jan 2018).
Women-founded or co-founded companies outperform all-male led companies by 2.5x (BCG June 2018).
Talent is evenly distributed across genders, ethnicity, race and sexual orientation. There is an untapped potential in targeting these underestimated founders, where capital is scarce.
We need more data on existing teams
More seed early-stage data: We need to better track who, and how much we invest in our founders here in the Nordics, the stage.
Performance data: In addition to investment and stage data, if we came together to compare optimal team mixes, we can optimize our investments together.
All of the above: This will allow us to dispell gender / race myths and stereotypes over time.
Transparency is key to accurately benchmark where the Nordics stand on diversity on an the international stage.
We are in a model in many ways globally, but on this front, it is not the case.
"6 out of 10 of the most valuable companies globally have been fueled by venture capital. The culture of those companies affects 100 000+ employees and diffuses through the products we use daily. This report serves as a very much needed start in measuring the diversity funding gap in the Nordics, to see where we are today and if we as funders and founders progress fast enough. I hope this is a continuous project and is adopted by the industry at large to ensure our world is shaped by diverse perspectives."
Investment Manager at Maki.vc
Pauliina Martikainen
Empower potential diverse founders
Why might be the case?
"...but there aren't that many female or ethnically diverse founders."
Creators of this report
Tina has worked on Wallstreet for 5 years, in Investment banking at JPMorgan and Fixed Income Trading at Credit Suisse.
She has been a founder of a men's fashion ecommerce company, digital agency focused on early stage startups and most recently Bloom, VR based mental health.
Ventures & Founder of Bloom VR Therapy
Tina Israni
Research Analyst @ DealRoom
Gligot is a Research Analyst at Dealroom.co. He has an MSc in Finance and Investments, Rotterdam School of Management. BSc in Economics and Business Economics from the Universiteit Utrecht.
Gligor Micajkov
Hiske is a Graphic Design and Art Direction expert with a Master's in Magazine Design, Identity Design and Web Design. She is also a coach: Graduated from Mindjuice Academy and works daily with coaching and coaching conversations.
Art Director & Coach
Hiske Jessen
Report Partners
As Norway’s largest bank, DNB seeks to broaden the scope and role of our business. This is part of our responsibility as facilitator and bank. To bring together investors and entrepreneurs, small and larger enterprises, we have created DNB NXT as a meeting place to exchange learning and inspiration. We are proud to be part of this important report, we look forward to help promoting the content, and we appreciate that DNB NXT in Oslo 26th September 2019 will be the arena for launching the report in Norway.
Diversity VC is a non-profit organisation focused on creating a more fairer and inclusive venture capital industry. Since Venture Capital is funding the future and that the decisions made by VC’s filter through to the whole community, Diversity VC believes we have a responsibility to ensure the right decisions are being made by creating an industry free from bias. Diversity VC has created several reports looking at diversity and the VC industry. Some of the most recent studies include Diversity in UK Venture Capital, toolkit for VC, Female founders report (Link). Diversity VC is a content partner to the report helping on analysis and content structure.
Backstage Capital is a US based VC firm investing in startup founders who identify as a Woman, Person of Color, and/or LGBTQ. Backstage believe these founders are underestimated, and have the most potential for unlocking innovation and creating valuable businesses. In 2019 Backstage Capital launched 4 new accelerators in Detroit, L.A, Philadelphia and London. Backstage Capital is a content partner to the report.
LEGO Ventures seeks to invest in entrepreneurs, ideas and startups that sit at the intersection of creativity, learning and play in a manner that aligns with this shared LEGO mission and supports the goal to reach as many children worldwide as possible with high quality, creative play and learning experiences.
Danske Bank Growth & Impact helps startups across Nordics that want to scale their business and make a better world. We believe that these companies will be important for the Nordic economy going forward and that they will be able to create solutions to global challenges that is essential for all of us. We engage the startup community with an open agenda and mindset.
Norwegian Venture Capital & Private Equity Association (NVCA) represent the seed, venture and private equity industry in Norway. The association works to promote an understanding of venture capital and private equity as an asset class, its contribution to and role in the Norwegian economy through financing innovation and growth.
Dealroom.co was founded in 2013, out of an itch to bring business information systems to the 21st century, They are based in Amsterdam and while we offer global data, Dealroom.co's distinctive strength is the quality of data on companies in Europe. A continent characterised by many different languages, many local startup ecosystems and a fast developing venture capital climate. Dealroom.co will be providing the data for the report using their database over the European startup scene.
Jane VC is a fund that makes early stage investments in female led technology startups in the US and Europe. The fund invests in areas where a female perspective unlocks value, with a focus on future of work, health and commerce.
Almi Invest is Sweden’s most active startup investor. Almi Invest manages a total equity of SEK 3 billion and has since start invested in about 600 startups. Our best holdings have been divested to major industry players such as Google, Apple, Microsoft, Twitch and Qlik or through successful IPOs such as Tobii and MIPS. Almi Invest is a Venture Capital company within the Almi Group. www.almiinvest.se
Vaekstfonden is the Danish state's investment fund. We strive to improve access to risk capital to enable Danish businesses to innovate, and to generate growth and new jobs. In close collaboration with banks and domestic and international private investors, we finance companies from all sectors nation-wide. We can accompany you for the entire journey – from your company’s infancy through growth phases to expansion abroad and even to an initial public offering
The Nordic 100 is an annual list recognising the 100 most impactful and influential figures in the Nordic tech scene each year. Individuals at the forefront of shaping and positioning the region as one of the world’s most important innovation hubs. They recognise investors, entrepreneurs and community builders that are playing important roles.
Thank you
