Insights / Technology
”Sweden has a unique ability to turn research and science into products and services”
On the Swedish ”climate tech boom” and what we can learn from it
7 Mar 2022

Tove Larsson has worked for more than ten years in the impact space. In 2017, she joined Norrsken VC — a commercial VC fund that invests in early-stage startups solving the world’s greatest challenges while building massive businesses — where she’s now a General Partner.

— When we look at backing impact unicorns, we search for companies not only valued above 1Bn USD but also positively impacting more than 1Bn people, she explains.

Einar Bodström is an entrepreneur, focused on building and growing purpose-driven startups. Passionate about filmmaking, he began by founding House of Radon (a creative agency, later acquired by Valtech, Ed’s note) and was also a Founding Partner at wardrobe-essentials brand ASKET. He’s now the co-founder and Chief Growth Officer at ClimateView, a Swedish climate technology company working with cities around the world to execute their optimal pathway to net-zero faster.

Together, the two of you believe that it’s time to talk about the Swedish ”climate tech boom”. What is that?

Einar Bodström: After being in the industry for a bit more than 4 years, the change in narrative and ideology surrounding climate tech during this time has been profound. In the last two years, it has become clear to — almost — everyone that we will shift towards a low-carbon economy which means that people and institutions that represent that future have gained lots of tailwinds. And even if the change in narrative has been global, Sweden’s mix of industrial heritage, cutting-edge software, and stable government institutions makes for fertile climate tech soil. This has really emboldened Swedish climate tech startups to think and act bigger, placing them on the podium just behind Silicon Valley.

Tove Larsson: Skype, Spotify, Klarna, King, Mojang, and more. Over the last decade, Sweden has generated numerous tech unicorns and Stockholm ranks second in the world in terms of start-up unicorns per capita, as mentioned second after Silicon Valley. More recently, within the past year, several Swedish startups have emerged as global leaders in the field of climate tech, according to Dealroom, now ranking Sweden as #1 in Europe in terms of impact unicorns. The next generation of superstar entrepreneurs coming out of Sweden are looking to address climate change through scalable tech solutions that can address these complex issues on a global scale.

How have Sweden as a country come where it is now? What are the secrets? And what can other countries learn from it?

Tove Larsson: Sustainability has been high on the agenda for Sweden for many decades, and we have often been a frontrunner in this topic both on the public and private sides. The environment is close to heart for many Swedes. It could be driven by the uniquely Swedish concept of allemansrätten — ”every man’s right” — which is grounded in the constitution and gives every Swedish citizen equal rights to access and make use of, but also responsibility to look after, public grounds and the countryside. This strong focus on sustainability together with structural attributes that promote tech and entrepreneurship, such as free education, subsidizing home PCs back in the 90s, and a strong welfare system, are some of the reasons why we see this exciting ”movement”. 

Einar Bodström: Sweden has a unique ability to turn research and science into products and services. And in contrast to other countries, there are also relatively fast-moving government agencies open to collaborating and co-create with startups on innovation. For instance, our origins started with a project as a collaboration between the Swedish Climate Policy Council, the Swedish EPA and the Energy Agency. Together with energy company Vattenfall, they all committed to a highly innovative experimental idea: to turn our first prototype — a 4-meter poster — into a digital platform. So there is a culture of nurturing innovation and an openness to crossing institutional boundaries that makes all the difference.

Who are the good examples here? Which startups, scaleups, companies, and initiatives are leading the way?

Tove Larsson: ClimateView is a great example, they have been able to pull together a rarely seen collaboration between Swedish government sectors, cities, and regions by introducing their operating system to tackle climate change. Now that is being upscaled and exported across the globe as we speak and we think that part of the company’s success has been coming from the Swedish ecosystem. A sector that especially stands out among Swedish impact companies is electrification and green mobility. We believe that Sweden is developing one of the strongest ecosystems in the world for electrification of transport — the roots of it coming from Northvolt, Europe’s largest battery giga-factory producing the world’s greenest batteries. They have inspired a string of start-ups tackling the future of transport and companies leading the way globally in this area are all from Sweden — Heart Aerospace’s electric aeroplanes, Einride’s electric autonomous trucks, X-Shore’s electric boats, and Cake’s electric motorcycles to name a few. Northvolt has also shown that you should not shy away from really bold, ambitious and capital intensive projects. Another example in that area is H2GS.

Einar Bodström: In the software space, I’m impressed by the work of Normative and Doconomy. Normative is creating tech to help companies decarbonize their value chains and Doconomy is empowering consumers, via financial institutions, to put their money where the carbon isn’t. In hardware, there is just so much to choose from, but I’m inspired on a daily basis by Northvolt and Einride for thinking big, as well as Cake for re-defining the concept of what a motorcycle can be. When you look at the landscape from hardware to software, there’s a thriving tech company in each sector, each niche, serving those needs but also part of a great ecosystem. Science-wise, agent-based modelling is really the cutting edge — even the next big thing after AI — and it’s what we’ve used in our platform. What’s exciting is that much of the research of its use on climate issues is coming from researchers in Sweden, like from the Stockholm Resilience Center.

Is this a temporary ”boom” or will it continue?

Einar Bodström: The talent migration into the field is huge. We often joke that the typical job applicant is a 30-something parent of young children looking for meaning in their career. But what we now also see is the number of young graduates who have included sustainability subjects in their master’s studies and also the ever-increasing number of senior experts looking to apply their decades of experience to the challenge. With so much skill from all parts coming to climate tech, the boom is just going to get bigger, fast. 

Tove Larsson: The challenges that these companies are addressing are massive and complex. With big challenges come big business opportunities. To solve climate change, we will need to invest trillions of dollars every year. This is not a boom, it is a long term structural shift. What is needed now is to embrace these new technologies that have the potential to really solve the challenges we are facing. Governments and big corporates can learn a lot from the agile, fast-moving startups that we are backing. I would love to see further acceleration of the speed at which these innovative solutions are bought and deployed in the public sector as well as with big corporates.  

And for you, what else do you have coming?

Tove Larsson: It’s always exciting things going on in the portfolio and with new additions to it. Norrsken VC is incubated by Norrsken Foundation and there are many exciting projects ongoing right now. We just launched the Africa growth fund and are running our second impact accelerator batch this summer.

Einar Bodström: Next month we’re launching a new best-in-class climate action plan visualization. It will help cities not only communicate their climate plans in a beautiful and data-driven way but also make it easier to increase climate literacy. We see some cities like Borås in the west part of Sweden already taking our software into classrooms to change the way teenagers think and learn about the climate transition. We’re working on some really interesting innovation projects with both cities like Malmö and organizations like WWF. They aim at knowledge sharing to help cities help each other and to increase the understanding of key parts of climate science, for example carbon budgets, and will be made public very soon. We also look forward to Stockholm 50+ at the beginning of June, the large UN conference that summons the world and is aimed at marking the starting point of ”the decade of action”.

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