Late last year Stockholm’s Norrsken Foundation launched Europe’s biggest social impact fund for early-stage tech startups. Today the €100m fund announces its first investment.

Norrsken is leading a €2m seed round in Elsa Science, a Swedish startup that has created a digital platform to provide individualised health advice for people suffering with rheumatoid arthritis — a disease that affects about 1% of the world population. 

By investing in companies like Elsa Science, the Norrsken Foundation has explicitly set out to prove that an “impact-first” investment philosophy can also generate market rate returns. The Foundation was launched in 2016 by Klarna cofounder Niklas Adalberth, who quit his role at the digital payments provider to focus on creating a buzz around purpose-driven startups. 

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“Klarna didn’t feel meaningful any longer and I wanted to use my skills to support impact startups instead,” he told Sifted.

The team behind the fund is based out of Norrsken’s hip co-working space in Stockholm and will largely focus on the Nordics, but it will also be looking further afield in Europe.

A “perfect example” for Norrsken

Elsa Science is one of a new wave of startups that are building digital health-tracking tools designed to help people manage chronic illnesses.

Its app lets people keep track of their symptoms, diet and lifestyle, as well as how they are responding to medication. Its users are guided by “Elsa” — a personalised digital assistant, who gives suggestions based on their individual circumstances. 

The goal is to “democratise scientific research”, according to the startup’s cofounder and chief executive Sofia Svanteson, who said that there is a huge amount of research that is tricky for ordinary people to access and act upon.

“It can take up to 17 years before scientific research becomes practical evidence used in clinics and even then it’s only the healthcare providers that have access to this very interesting information,” she said. “We want to use technology to transform this knowledge into something that ordinary people patients can actually use themselves.”

As the first investment made by Norrsken’s new €100m fund, the investment sets the tone for its future. 

Agate Freimane, one of the partners managing the Norrsken impact fund, said the startup is a “perfect example” of the kind of startup they will back in the future. “While the fund will be focused on a broad range of sectors, such as climate change, education, poverty and others, we expect that digital healthcare will be a significant part of the fund as we see a lot of potential in the space at the moment,” she said.

Two layers of impact

A lot of European startups claim to be making social impact but Norrsken has taken a stricter line on its investment criteria. To be chosen, startups need to have “clearly measurable impact” that can be tracked over time.

For Elsa Science, Freimane said she expects to see “two layers of impact”. The first “short term immediate impact” is the extent to which the app’s users see a reduction in their symptoms something that can be measured via the app.

But the impact measurement also goes further than this. The next layer that Freimane wants to see is a reduction in the “cost for society”, measured by a change in the number of sick days that people have to take as a result of the illness.

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