NORWAY Trends and Developments Contributed by: Nicolai Julsvoll, Øyvind Mork Karlsen and Jørn Hove, Thommessen
rate venture capitalists and crowdfunded invest - ments declined in 2024. Going into 2025, active venture capital funds and private equity funds remain well funded and have capital to deploy. According to Son - do Capital, the number of unique investors per investment round increased from 2023 to 2024, which indicates that investors have not given up on Norwegian early-stage companies but have become more particular on where and how capi - tal is deployed – thus increasing competition for financing between early-stage companies. Further, the amount of rounds with at least one international investor increased to more than 30%, indicating that Norway remains an attrac - tive market for foreign investment, despite tax concerns (see subsection on “exit tax” later in the article). In line with international trends, private equity funds have joined the fast-growing segment of growth equity – loosely defined as an overlap - ping space between the venture capital and pri - vate equity space – with mandates adjusted to include minority investments in scale-up com - panies, as opposed to the typical controlling stake in more mature companies. Unlike fam - ily offices and the typical venture capital funds, the private equity funds’ mandates are normally not adapted to minority investments. Investing in a minority stake may result in more demand- ing negotiations for companies, as the private equity fund’s mandate will typically require target companies to have a clear set business plan and clearly defined exit opportunities. Investors’ defi - nitions of good exit opportunities will not neces - sarily align with those of the other shareholders – for example, certain private equity funds’ aver - sion to IPOs, due to an IPO typically requiring a lock-up of shareholding that prevents a quick and clean exit.
The private equity influx, primarily targeting companies with established market positions and ongoing upscaling activities, has increased competition between sponsors and investors – hereunder more traditional venture capital - ists – as the amount of viable target compa - nies has not increased at the same rate as the growth in available capital. In a venture capital market dominated by early-stage investments, increased investment in scale-ups and more mature growth companies is a welcome devel - opment for companies seeking financing in the critical make-or-break phase. At the deal level, an ongoing trend is that venture capitalists acquire lower shares of equity, yet have not reduced their demands for influence. This makes board representation, veto rights and reserved matters key points of negotiations. Exit opportunities 2020 and 2021 saw a surge of IPOs, with a peak of 68 listings in 2021. A significant number of the companies in question – many of them early- stage technology companies – were listed on the multilateral trading facility Euronext Growth Oslo. With lighter reporting requirements and simplified listing requirements, Euronext Growth is attractive for SMEs and has therefore provided a potential exit opportunity for venture capitalists and other shareholders. However, the IPO activity cooled in 2023, which saw seven listings across Euronext Growth and the regulated marketplaces. IPO activity increased somewhat in 2024, with 19 listings in total. At present, a large uptick or downturn in activity levels is not expected for 2025 – further indicating that 2020 and 2021 were anomalies. For many of the early-stage companies listed in 2020 and 2021, equity financing remains hard to
423 CHAMBERS.COM
Powered by FlippingBook