Sweden is perhaps one of the most important technology centers in the world right now. It’s long been home to Spotify and Klarna, but this latest wave of companies, from legal AI startup Legora to vibe coding tools company Lovable, has left everyone wondering what’s going on in one of the happiest countries in the world.
Sophia Bendz, General Partner at Cherry Ventures, stopped by Equity to discuss the latest in Stockholm’s startup ecosystem. His answer to why the country has produced so many interesting startups: Being a founder is really cool. When you worked at Spotify years ago, the cool thing was to become a banker or go into consulting. “Now, I think a lot of people optimize to create things and optimize for both freedom and probably wealth.”
This year, the startup ecosystem has raised $2.8 billion in funding, according to Dealroomand is expected to reach at least $5 billion. Last year, the ecosystem raised $3.2 billion. Nothing has matched the $8.5 billion raised in 2021, a reflection of the active venture market that then cooled and is now, according to data, starting to heat up again. Other big names emerging from the ecosystem include Neko Health and autonomous transportation company Einride.
Bendz said the latest wave of startups in Stockholm are benefiting from the first generation of entrepreneurs, who provide resources and mentorship to the latest generation or, in some cases, become repeat founders themselves (Spotify founder Daniel Ek, for example, is also the founder of Neko Health).
“I think we also see a lot of people leaving Lovable because they also see these opportunities for companies that can be built with that technology,” he said of how this generation could inspire the next. “People who have worked at Lovable and Legora seem to have a strong entrepreneurial drive and a desire to start their own companies.”
Unsurprisingly, American investors have taken note. Bendz said more and more American investors have been traveling to meet with founders and deliver term sheets. “It’s just a testament that we have a lot of great construction companies here,” he said. “It’s a sign that we’re doing something right.”
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