As we approach the year’s end, we’re celebrating the milestones achieved by our team and portfolio. In a world where AI and the green…

As we approach the year’s end, we’re celebrating the milestones achieved by our team and portfolio. In a world where AI and the green energy revolution are accelerating at an unprecedented rate, we envision 2024 as the year for generation-defining founders to solve some of the world’s biggest problems, and we’re here to back those daring to do it.

Photo: Jero Forradellas

The landscape for founders and investors has undergone a significant shift. The past decade’s era of easy credit and robust growth has given way to a more challenging commercial environment, with less margin for error and greater pressure to perform.

Yet, 2023 also marks a return to familiar territory. The anomaly of 2021 has passed, bringing investment volumes and valuations back to long-term averages.

Amidst this return to form, we at EQT Ventures have much to celebrate. New companies, some significant funding milestones, team additions, and a portfolio of startups that continue to change the world — from revolutionizing water transport with hydrofoil boats to launching the first European capsule to be sent to a commercial space station. All testament to our belief in businesses that dare to redefine the future.

The big picture

While overall funding remains below the peak levels of 2021, the broad picture is a positive one. Global venture funding hit $64.6bn in Q3, an increase of 11% from the previous quarter — the strongest quarterly percentage growth since Q2 2021. And total investment in Europe is set to hit $45bn for the year. While that’s a 38% drop from 2022, it’s around 18% ahead of 2020. This resilience, amidst a broader market downturn, puts Europe on track to have its third largest year in funding.

And this is largely thanks to deals focused on sustainability, energy transition, and artificial intelligence — a trend that mirrors government efforts around the world to reduce emissions across key industries. Despite a 40.5% year-on-year decline, climate tech’s share of venture and private equity investment rose to 11.4% in Q3 2023, extending a decade-long upward trajectory. The need for innovative ways to mitigate, measure and adapt to climate change has become more urgent, and investors and founders recognize it.

To the backdrop of these developments, the global IPO market is regaining momentum, with IPOs up 24% quarter-on-quarter, and Europe maintains its lead in share of global exits.

It all serves as a barometer for sentiment and increasing activity across not just tech, but markets as a whole.

Investments and raises

We’re proud to have announced 10 new investments this year: The Exploration Company, ViridiCO2, Sifflet, Parloa, evroc, Payrails, Fly.io, Kota.io, Qevlar AI and Generative Engineering.

We also saw some incredible raises from across our portfolio, including Volt’s $60m Series B, Anyfin’s $30m Series C, Nothing’s $96m raise, Verkor’s €2bn raise, and Sana’s $28m extension to their Series B. Congratulations to all of you who reached funding milestones this year!

Portfolio companies changing the world

Our portfolio companies continue to build toward a better future. Candela launched P12, the world’s first all-electric hydrofoiling passenger vessel, Dott unveiled plans to double their e-scooter lifespan, helping halve carbon emissions, and The Exploration Company and Axiom Space signed a deal which will make Nyx, The Exploration Company’s reusable vehicle, the first European capsule to be sent to a commercial space station.

Events

We collaborated with Brilliant Minds on the Brilliant Innovators startup competition, co-hosted a dinner session with Sana following their groundbreaking AI Summit, and kickstarted the Climate Brick initiative in Stockholm’s archipelago. Our Founder Day in Berlin brought together 50 guests from our portfolio and beyond. We also partnered with Sifted at their London Summit to tackle strategy, headcount, resourcing, and trade-offs, and gathered 50+ female founders and operators for a pizza party in Stockholm. At last month’s Slush, we teamed up with Nothing and teenage engineering to host drinks for pioneers, creatives and humanists actively shaping the future of consumer tech.

Content picks

Don’t miss our podcast series with Sifted on how to navigate a downturn, with insights from Flow, Instabee, Sonantic, Peanut, and Griffin. Dig into Nothing and Volt’s Founder Stories, and check out Operating Partner Gautam Nadella’s latest piece for Forbes on how and when to consider selling a startup.

Soak up the learnings from our Founder Day in Berlin, including Iskender Dirik’s piece on pitching with more “bam, boom, pow and wow”, and get hands-on tips for making the most of challenging moments from our London team and portfolio company Cleo.

Lastly, discover how our fintech team, led by Tom Mendoza, is investing in the sector as part of our generalist fund strategy.

Team growth and recognition

We welcomed seven new members to our team: partners Julien Hobeika, Kaushik Subramanian, Gustav von Sydow and Shivram Ayyagari, director Thomas Poitrineau, executive assistant Camilla Hellgren, and analyst Preet Singh Khalsa.

And our team has been recognized for their exemplary work. Partner Ashley Lundström was named one of the top women in European VC by Sifted, Partner Sandra Malmberg was named a top female investor in food and climate by ClimateHack, and Principal Naza Metghalchi was named one of 34 rising stars in European VC by Business Insider.

In the media

Partner Ted Persson talked to Business Insider and Di Digital about the Inflation Reduction Act’s consequences for European climate tech, and to CNBC about the current AI landscape. Sandra told Sifted about the Nordic startups she has her eye on, and Partner Rania Belkahia was profiled by Maddyness.

On stage

Engagement with industry events has been a highlight this year. Partner Doreen Huber joined this year’s Sifted Sessions Berlin to discuss the State of Play in DACH, Partner Carl Svantesson joined TechBBQ’s Nordic LP Forum for the panel “The Future of Venture Capital (Data & AI)”, Lars spoke at SuperReturn on the panel “Spotlight on Europe: the land of optimism and purpose?” and Ted appeared on-stage at Slush to chat with Nothing’s Carl Pei about the future of consumer tech. Meanwhile, Kaushik attended a roundtable at 10 Downing Street hosted by Baroness Diana Barran MBE.

Looking ahead

As we approach the end of this year and look to the next, there’s a tangible sense of optimism and resilience within tech and venture. The year has been a pivot from the past decade’s growth trajectory, ushering in a more nuanced commercial environment. Yet, it has also signaled a return to form, shifting priorities to what really matters.

European venture is gaining ground, now nearly on par with the US in terms of global funding share for early-stage companies, after having nearly halved the gap in the last five years. And investors, particularly in Europe and the US, are focusing their attention on startups solving the world’s biggest problems, increasing investments into AI, climate, and purpose-driven tech — all of which have been notable exceptions to the broader drop in funding. This trend resonates deeply with our mission to support startups addressing key societal issues.

Here’s to another year of supporting the founders shaping tomorrow and building with purpose.

— The EQT Ventures team

Read more
State of European Tech 2023
State of AI Report 2023
The state of AI in 2023: Generative AI’s breakout year | McKinsey
State of Venture Q3’23 Report — CB Insights Research
Global Venture Capital Outlook: The Latest Trends | Bain & Company
State of Climate Tech 2023: Investment analysis | PwC
Living Landscape: Climate Tech
A brighter future for fintechs in 2024? — Thomson Reuters Institute