Read our 2020 market analysis as of Q3

Photo: Ilja C. Hendel

In our latest market analysis, we have compared the activity in the first three quarters of the year with the same period in the last five years, to get a picture of how the COVID-19 pandemic has affected Nordic private equity so far.

The venture segment has performed well compared to previous years, with as many deals as in an average year. The invested amount is up 121 per cent:

  • A major reason why the amount has increased is Klarna, which became the highest valued fintech company in Europe when the company raised $ 650 million in its last finance round in September, 39 per cent of the value invested so far this year.
  • Another clear trend we see is that companies in the healthcare sector are popular, and one in five venture investments has gone to these – an increase of as much as 46 per cent. We have several examples of Nordic health companies that have become relevant during the corona crisis and thus attracted investors, e.g. Kry and Oura.

For the Nordic buyout segment, the arrows have pointed further downwards so far this year: the number of investments is down 27 per cent and the amount invested is down 17 per cent.

  • An interesting development is that technology has taken over the throne as the most popular sector with a share of 43 percent so far this year. In the last five years, the sector has had an average of 21 per cent of investments.
  • Two tech investments also stand out: When the British PE fund Hg joined Norwegian Visma, it was the largest acquisition of a software supplier ever. In addition, IFS was acquired by EQT and TA Associates.

Although the pace of investment has slowed in 2020, Nordic managers apparently have little problem raising new capital. Especially among the acquisition funds, the appetite is great and we are heading for a record year with almost 30 billion euros raised at the end of the year.

The number of PE-supported sales is down in both the venture and acquisition segment, around 45 per cent in both markets:

The uncertainty that we have seen so far this year has affected the willingness to take risks and has affected pricing in a negative direction, which makes both buyer and seller wait until the market becomes more predictable.
However, there are many IPOs of PE-supported companies, as many as eight since June. It is clear that early-stage companies see listing on the stock exchange as an attractive way to raise fresh capital and achieve attractive pricing.

Read our market analysis per YTDQ3 2020