Why investors should look to the Nordics for impact investments

A picture of Kristin Harilla on stage at StartupLab during Cleantech Summit 2023
Kristin Harila at StartupLab Cleantech Summit during Oslo Innovation Week 2023. Photo by Gorm K. Gaare

Published by Oslo Business Region, 13 February 2024

According to the Nordic Impact report launched back in September 2023, the Nordic region is the leading impact region in the world. Over 38% of total funding is going into the impact segment while the number in Europe is 22% and under 10% in the US and Asia. 90% of impact investments are within climate tech where energy, mobility and transportation are dominating.

A picture of Adele Unneberg from Sandwater VC
↳ Adele Unneberg from Sandwater VC

We met with Adele Unneberg, Venturist at Sandwater VC to hear her thoughts on the impact space in Norway:

What is your view on the opportunities for impact investments in Norway. Are there any trends you see?

"One source of competitive advantage for Norwegian start-ups is our specific industrial heritage, and the opportunity that lies in leveraging existing expertise and value chains to drive innovation in those sectors. A great example of this is our offshore and marine industries, where we see a lot of entrepreneurial activity going into repurposing that heritage competence to develop sustainable solutions - in offshore wind and wave energy, zero emission shipping, and sustainable aquaculture to name a few."

International capital represents a big portion of all investments in Norway (80% in 2022). Sandwater is one of a few Norwegian VCs investing in later-stage startups. What are the main gaps you see for Norway to attract more impact investments?

"As the Norwegian venture ecosystem is maturing, one area where we see a relative scarcity of local capital is in the growth stage, and within that particularly for climate tech hardware companies that often need significant amounts of venture funding before their technology is sufficiently de-risked and commercialized to attract private equity or infrastructure funding. To enable faster scaling of the technologies that will allow us to meet our 2030 targets, we need more risk capital in this growth stage, and crucially we need it in combination with other non-dilutive funding sources, such as government grants and commercial debt structures."

Tonje Ørnholt, head of investment at Oslo Business Region agrees that we need more growth investments in Norway. To use an example from the impact report:

"Sweden is ahead in the Nordics and invests 6 times as much as no. 2, Norway in impact. One explanation is that Sweden attracts more later-stage investments. Norway is actually ahead of Sweden in early-stage investments and maintains high activity with the same number of funding rounds as Sweden. This trend between the two countries isn’t only isolated to the impact segment, but across all areas of VC investment. One of the reasons for that is that the Norwegian startup ecosystem is still young, Sweden has a more mature startup ecosystem and more mature companies in need of later-stage investments."

Based on the report, as of September 2023, Norway had experienced an increase in climate tech investments of 16%, with 286 million euros invested in climate tech. The biggest round in Oslo was Hystar, led by a mix of Asian and European investors including the Norwegian VC, Firda.

In the global context, impact funding experienced a drop of 19%.

Come join us at Tech Arena 2024 in Stockholm where we will be discussing impact investing in the Nordics!

You can get access to all Dealroom reports in 2024 for free if you sign-up and create a free Dealroom account!