Norrsken Foundation, the Swedish impact hub created by Klarna cofounder Niklas Adalberth, has launched a €100m “impact-first” investment fund.
When it closes, Adalberth says it will be biggest impact fund yet focusing on early-stage tech startups in Europe.
The new fund will follow a similar approach to Norrsken’s earlier fund, investing in impact-driven tech startups from seed to Series A.
The idea behind the fund is inspire more money to flow into impactful startups by proving that they can also generate market rate returns. With this goal in mind, the fund will also be putting an emphasis on transparency — being open about financial returns and keeping track of how its portfolio companies are tackling the world’s biggest problems.
“We believe that entrepreneurs are key to solving challenges like poverty, discrimination, food waste, mental health and climate change,” said Adalberth.
“The biggest impact we can have is if we can inspire other VCs to go into this too.”
“[But] the biggest impact we can have is if we can inspire other VCs to go into this too, as well as other asset classes,” adds Adalberth.
The fund will be run out of Norrsken’s trendy co-working space in Stockholm and will largely focus on the Nordics, but it will also be looking further afield in Europe.
Four general partners will be in charge of running the fund, including Adalberth himself alongside entrepreneur and angel investor David Frykman, Norrsken’s chief investment officer Tove Larsson and former Morgan Stanley banker Agate Freimane.
So far, Norrsken has successfully completed the fund’s first close of €61m, with the final €39m expected to be finalised by April.
Founded in 2016, the Norrsken Foundation has already generated a buzz around impact in tech in the Nordics, spurred on by Adalberth’s own deep pockets as well as his profile as a well-respected entrepreneur.
“Klarna didn’t feel meaningful any longer.”
Before setting it up Adalberth rose to prominence as one of three cofounders of Sweden’s digital payments provider Klarna, now the most valuable European fintech, where he worked for over a decade before leaving it behind to focus on impact-driven tech startups. “Klarna didn’t feel meaningful any longer and I wanted to use my skills to support impact startups instead,” he told Sifted.
As per Adalberth’s design, there are two key pillars to Norrsken’s work. The first is to open a series of impact-themed co-working spaces, similar to the one in Stockholm where the fund will be based, which has already become a well-known feature of the city’s tech scene.
Norrsken recently announced it will be opening a second space in Rwanda’s capital city of Kigali, where it is hoping to accelerate the development of the city as a tech hub. In the future the foundation plans to go much further — the ultimate ambition is to open a total of 25 co-working spaces across the world.
The second pillar to Norrsken’s work is all about channeling more capital to impact-driven companies. This began with its previous, much smaller fund, which was something of an experiment, according to Adalberth.
“To be honest, at the beginning we had no clue if there were many impact startups out there. But we’ve been so overwhelmingly surprised that not only have we found an enormous number of impact startups, but we can make a profit from them too,” he said.
To assess whether a company is impact-driven, the new fund’s managers will use an impact framework that is inspired by the United Nation’s Sustainable Development Goals (SDGs).
For this, the ability to measure a company’s impact is key. “If you can’t measure it — or if you are struggling to find ways to measure it — then it probably isn’t an impact company,” said Freimane, one of the fund’s four general partners.
One example is Karma, the Swedish food-waste startup that has designed an app to link users with surplus food from restaurants. The company’s raison d’être is reducing food waste — something that can be measured by looking at the number of meals bought via the app that otherwise would have gone to waste.
This can then be taken one step further by measuring the amount of carbon dioxide that would otherwise have been emitted in the process of making and disposing of those meals.