The Swedish Start-Up Ecosystem: An interview with Markus Hökfelt

The Swedish start-up ecosystem: An interview with Markus Hökfelt

Sweden has an exceptionally promising energy transition track record, driven by policies targeting energy efficiency. This includes giving preference to technology‑neutral processes as well as implementing the highest carbon tax globally with the aim to reduce emissions. Its overarching energy policy goals call for achieving 100% renewable power by 2040 and net zero carbon emissions by 2045. In line with this, Sweden is expecting to gradually see its outdated power plants shutting their doors and a drastic rise in demand for sustainable and innovative energy sources.

This is where start-ups come into play

Sweden boasts one of the world’s most active start-up ecosystems. Simply put, for every 1000 employees in Sweden there are 20 start-ups. Naturally, venture capital funding in Sweden is rising progressively, and Stockholm is referred to as Europe’s “unicorn factory”.

Sweden has always been well represented by start-ups in our SET100 network. Some of the previous Swedish SET Award winners and finalists include: Enjay AB (SET’ 20), BLIXT (SET’19) and Einride (SET’ 19) among many others. Be sure to check out our SET100 network here.

 We had the pleasure of sitting down with Almi Invest GreenTech Fund Manager, Markus Hökfelt who kindly agreed to answer some questions on the Swedish start-up ecosystem.


Hej Hej! Tell us about yourself, your role and your business.

Markus Hökfelt (MH): I am the Fund Manager of Almi Invest GreenTech. We are a state and EU funded Venture Capital fund that invests equity as direct investments into early stage start-ups. Our focus is companies with a major potential to reduce Green House Gas emissions and we always co-invest with private VCs or angel investors.

Can you tell us about the Greentech scene in Sweden and what others can learn from the Swedish experience?

MH: Sweden has a good platform for fostering research and development and innovation. In the last couple of years our tech scene in general has created some spectacular companies like Spotify and Klarna to name a few. But the Greentech and climate related companies are in a sector which is more challenging due to longer lead times for development, higher CAPEX demands, dependencies to industries and sometimes subsidies. Therefore, investors have been shying away from investing in this sector. However, I think we are starting to see a shift as the macro-drivers are so strong and Greentech companies will create long-term profitable returns. Mini-corns like Northvolth, Exeger, Climeon, and more are now starting to emerge.

The support ladder from University Research, through grants, seed funding and growth funding with a good blend of state AND private capital is a good system that I think can be something to learn from. Germany too has a strong start-up scene. I think in both countries the University cities and some larger cities makes up the lion’s share of new companies. What could be improved is to include more of the society in creating innovation, such as female founders and 1st and 2nd generation new citizens.

How important is green mobility? How is this being implemented to success in Sweden? What role are start-ups playing?

MH: Short transports and heavy cargo is a big emitter of not only GHGe but also small particles and NOx that is bad for human health. There is a large support for electrification of cars with subsides for cars, taxes and charging infrastructure. Additionally our collective transport system is decent. Now micro-mobility and last mile delivery services with bicycles or scooters are growing in popularity to complement this backbone. However, they still need to work on their durability, recycling and improving their CO2 footprint in order to be climate positive in the long run.  Additionally heavy transports and busses are piloted with overhead rail-lines and on the road inductive charging. Along with Northvolt’s ambition for a Swedish Gigafactory and related R&D and Sweden’s tradition and knowledge for building cars like Volvo and SAAB I think this could promote start-ups that are attractive for investments going forward. Start-ups have the opportunity to disrupt and focus without having to cope with legacy. This means that they are fast and laser sharp in building competitive edge.

Start-ups are constantly looking for the best locations for their headquarters. What makes Sweden a prime spot for start-ups to set up shop?

MH: The mix and blend of various types of funding, the mix of large companies with resources that are embracing start-ups, good access to top-talent, a well working society where being an entrepreneur is easy, and a clean environment close to nature even though you live in a vibrant larger city.

How are you currently working with start-ups during the current pandemic?

MH: We are going digital first in everything we do from pitches and events to board meetings and internal meetings. So far the pandemic has been so short that we have not yet invested in a company that we have not recently met in person, but maybe we need to if the situation gets worse.

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