VC Perspectives

There are lots of lists right now, last week Internetworld selected Sweden’s hottest web entrepreneurs, this week two of Sweden’s most influential business and technology magazines, Affärsvärlden and NyTeknik, present Sweden’s 33 hottest technology startups (max 7 years old).

Although these kind of lists are highly subjective and a bit populistic, Affärsvärlden and NyTeknik have a thorough process where readers and the journalists nominate companies and then the magazines select the 33 most promising companies that have the potential to become internationally successful.

This year, 3 companies that we have invested in made it to the list: Spotify, Videoplaza and Edgeware. Congratulations to them and to the other 30 companies on the list.

An interesting fact perhaps is that out of the 33 companies at least 23 had received venture capital. The magazines also asked these investors (in the 33 companies) what their investment activity in 2009 will be like. 5 investors (Creandum, Industrifonden, Investor Growth Capital, Northzone Venture Partners & SEB Venture Capital) said that they will continue to invest as much in 2009 as in 2008 whereas 4 (Exero Capital, Jane Walerud, Kreos Kapital & Provider Venture Partners) mentioned that they would invest less.

UPDATED: The list in NyTeknik (Swedish Only) and Affärsvärlden (Swedish Only)

Last week Internetworld.se announced their list of Sweden’s 25 hottest new web entrepreneurs (Swedish only but pretty easy to understand anyway). The published list so far only includes place 2-25 but the winner Fraktjakt.se has been published separately. New in terms of that they haven’t been on the list before (since quite few have been at it for several years) and hot in terms of their likelihood of being successful during 2009.

Success is hard to measure in early stages of a company but going back to last year’s list actually reveals a pretty good hit rate. Quite a few companies have developed positively, at least a handful have raised capital from VCs and business angels (including Spotify, Bambuser, Videoplaza, Tailsweep, Xcerion, Yubico, Momail and probably more) and at least one was acquired (Viewserve). Hopefully, this year’s bunch will be able to defy the tough financial climate and develop their ideas and companies further.

By the way, are there similar initiatives in the other Nordic countries?

We’re already well into 2009 and we can look back at a turbulent 2008 with a financial crisis, economic recession but also exciting company developments and new investments.

During 2008, we looked at around 400 companies eventually investing in 4 companies and now have 7 portfolio companies in our latest fund. The companies we invested in covered a wide range of technologies:

• IPtronics (Denmark). A semi-conductor company founded by some of the people behind Giga that was sold to Intel for USD 1.25 billion in 2000.
• Spotify (Sweden): An innovative and legal digital music service offering instant access to pretty much all music on the planet. The team is headed by serial entrepreneurs Martin Lorentzon (co-founder of TradeDoubler) and Daniel Ek (Skype, Stardoll).
• Videoplaza (Sweden): Provides premium publishers with an ad server for video, specifically catering for the needs of well known online brands with high-quality web tv content and a proprietary sales force.
• Xtract (Finland): A software company helping mobile operators and online advertisers create accurate and automated consumer profiles based on social interactions, behavioural and demographic data.

In addition to our new investments, we also made a pretty thorough exit-analysis where we have analyzed about 200 Nordic technology exits during the last 10 years. We’ll cover this study in more detail in a later post.