DENMARK Trends and Developments Contributed by: Poul Guo, Martin Søndergaard, Patricia Rasch and Jonas Miller Rasmussen, Moalem Weitemeyer
environmentally friendly business models within the Danish VC market. In the fourth quarter of 2024, the Danish green technology sector experienced a significant boost, with VC investments reaching record lev - els. The total investment volume in green tech companies amounted to DKK2 billion (EUR266 million) across 32 funding rounds, marking a 40% increase in investment volumes and a 10% rise in deal count compared to the previous year. This growth reflects the sector’s continued expansion, driven by an increasing investor focus on sustainability. Despite the strong investment momentum, the sector faces challenges due to rising capital costs and long commercialisation timelines, which make scaling green technologies more difficult. Additionally, high-profile failures of ven - ture-backed companies have heightened inves - tor caution, leading to a more selective approach to green investments. As a result, while the sec - tor shows promising growth, uncertainty around future investment levels remains due to macro - economic pressures and shifting investor priori - ties. Exit Opportunities Danish IPO activity has seen a notable decline in recent years. After peaking in 2021 with a record high of 26 IPOs, the number of listings dropped significantly, with only three companies listed in 2023. This downward trend continued into 2024, with no IPOs completed in the first half of the year. The decline forms part of a broader trend across Nordic markets, driven by increased stock mar - ket volatility and reduced investor confidence, making the environment less favourable for IPOs. Despite the Danish stock market perform -
ing well in the first half of 2024, companies have been hesitant to pursue listings, partly due to continued investor caution and a preference for low-risk alternatives such as government bonds. Matchloans Matchloans, offered by the Export and Invest - ment Fund of Denmark (EIFO), are a financial instrument designed to support early-stage start-ups in Denmark by matching investments from private investors on a one-to-one basis. This means that, for every krone invested by a private investor, EIFO provides an additional krone, effectively doubling the capital available to the start-up. The loans range from a minimum of DKK500,000 to a maximum of DKK3 million, and are struc - tured with a six-year term, including an initial three-year interest-only period. Matchloans are particularly attractive to companies as they provide substantial funding without diluting the founders’ equity, thereby preserving their control and ownership. Additionally, these loans enable start-ups to leverage private investments, share risk with investors, and establish a solid financial foun - dation to scale their businesses. The structured support from EIFO, combined with the expertise and networks of private investors, enhances the potential for start-ups to achieve their growth and innovation objectives. Foreign Direct Investment (FDI) Screening Over the past year, enforcement of Denmark’s FDI screening framework has intensified, with authorities conducting more in-depth reviews – particularly for investments linked to Chinese or non-EU/EEA investors. Despite this heightened scrutiny, only one case to date has resulted in the Minister for Industry, Business and Financial
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