SWEDEN Law and Practice Contributed by: Corinne Ekman, Mikael Nagy and Joacim Kanstedt, Gernandt & Danielsson Advokatbyrå KB
the US, which was expected during H1 2025 but, at the time of writing, has been post - poned due to market volatility and valuation uncertainty. • Bankruptcy: In March 2025, Northvolt filed for bankruptcy proceedings in Sweden (after a Chapter 11 filing in the US in November 2024), after securing over USD15 billion in funding since its founding, including a USD5 billion green loan in early 2024. Northvolt’s collapse leaves Stegra as the bellwether for climate tech in Europe and has prompted broader questions around the viability of capital-intensive gigafactory ventures. 1.2 Key Trends Following the valuation peaks during the record years of 2021–2022, the beginning of 2023 proved challenging for many Swedish start- ups. A combination of higher interest rates and geopolitical uncertainty led to a contraction in the availability of venture capital, resulting in a subdued fundraising climate, save for start-ups within clean and climate tech with Stegra (for - merly H2 Green Steel) taking pole position in 2023 with its EUR1.5 billion financing from an investor group led by Altor, CIC, Hy24 and Just Climate. While there was optimism at the outset of 2024, driven by expectations of interest rate reduc - tions and market recovery, conditions remained constrained. Investors continued to focus on the increased cost of capital, whereas many found - ers remained anchored to prior-cycle peak val - uations. This disconnect contributed to a con - tinuation of the trends observed in 2023, with founders favouring convertible instruments and bridge financings over a down round. As a result of the continued challenging financ - ing climate during 2024, many investors shifted
their focus from primarily assessing the poten - tial of rapid growth, to also include sustainable growth, profitability and a clear exit route in the equation. The emphasis is now more on busi - ness models that balance revenue generation with long-term viability, predominately in sec - tors such as fintech and software as a service (SaaS), where the previous mindset of “growth at all cost” is being replaced by more strategic approaches. At the same time, the LPs of ven - ture capital funds are becoming increasingly more demanding, wanting to see actual returns on their investments rather than being satisfied with a hypothetical figure derived from the most recent funding round. Despite these pressures, the second half of 2024 and first quarter of 2025 saw a clear uptick both in fundraising activity and valuations, as more companies returned to the market and investor appetite improved. Foreign investors were fur - ther incentivised by the weak Swedish krona, enhancing the appeal of Swedish investments. There has also been a noticeable shift amongst investors preferring to deploy their capital in early-stage companies which are less capital- intensive and require less frequent capital injec - tions, such as fintech and SaaS. This said, start- ups within the deep tech segment have seen a rise in both number and size of investments during 2024 despite those companies requiring substantial capital before reaching the commer - cial phase and seeing any meaningful revenue streams. This could be seen as an indication of investors’ willingness to support ground- breaking impact technologies which, while cap - ital-intensive, benefit from a clear competitive advantage due to high technological barriers to enter the segment. Another important and noticeable trend during 2024 was Sweden’s progression towards pro -
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