Listing your Nordic (startup) company is a viable option

Since 2012, I have worked with investing in startups in Iceland through my work at Arion Bank in Reykjavik, Iceland. These investments come through the business accelerators Startup Reykjavik and Startup Energy Reykjavik. Each participant in the accelerator receives fresh equity in addition to the various support and perks available.

A new milestone was reached last week for Startup Reykjavik, when Klappir Green Solutions (KGS) was listed on the Nasdaq First North stock exchange. The company Datadrive participated in Startup Reykjavik in 2015. The company was acquired by KGS in 2016 and most shareholders were paid shares in KGS in return for their holding in Datadrive.


Reaching the point of “Exit” for a seed or growth stage investor is important. The liquidity of shares in startups is extremely low. Those who invest directly with their own capital or indirectly in Venture Capital funds that invest directly in startups are familiar with this dilemma. It normally takes 10 years to build a successful company and investors need to accept both the risk and time frame associated with investing in the asset class. An exit from an investment for an investor can happen anytime during the investment time (although this rarely happens), when the company is sold or acquired in a trade sale or with a listing on a stock exchange.

Different mindset in the Nordic countries

Listing an early stage company is not common in other countries than Sweden in the Nordics.

Number of companies on the different lists in the Nordics. Source: Bloomberg. Note that not all companies might be included in the query.

In total there are 501 companies on the list taken from Bloomberg, of which 498 have been analyzed in this article (thereof 1 in Iceland). Swedish located companies, First North Stockholm and Aktietorget, account for more than 80% of the companies in these small exchanges, at least when compared to the OMX main list. Nordic Growth Market (NGM and Nordic MTF) has only around 10% market share in terms of number of companies.

There is a wide diversity in the Market Capitalisation (MC) of these companies, ranging from less than 1 million USD to over 1 billion USD.

Distribution of Market Cap of 498 companies on the smaller Nordic stock exchanges. Source: Bloomberg

Looking closer at the distribution of the Market Cap of these companies we see that 75% of these companies have a MC of less than 50 MUSD.


What is even more interesting is to look at their revenues and profitability. Let’s start with the distribution of revenues in the last trailing 12 months. Please note that these numbers are only available for 321 of the 501 companies in the Bloomberg database.

Revenue in the last trailing 12 months on the smaller Nordic stock exchanges. Source: Bloomberg

Analyzing this data tells us that 50% of the companies have annual revenues less than 10 MUSD.

Revenue groups of companies in the smaller Nordic stock exchanges. Source: Bloomberg

It get’s even more interesting when looking at EBIT (Earnings Before Interest and Tax).

EBIT in MUSD for companies in the smaller Nordic stock exchanges. Source: Bloomberg

We see that 49% of the companies do NOT have positive earnings.

EBIT distribution of the companies on the Nordic smaller stock exchanges. Source: Bloomberg

What do these figures tell us, if anything at all? There are a few things

  1. Swedish founders and investors look at the stock exchange as a viable option for a financial exit in addition to the discipline that being listed entails. Having lived in Sweden for five years and worked there professionally I can vouch for this attitude.
  2. Other Nordic countries seem less inclined to list their companies at an early stage. Whether it is because of little interest of founders, investors or other stock market participants, I cannot truly say. My feeling it is more of a business culture in Sweden than elsewhere, which makes me wonder why it has not developed in the same way in Norway, Denmark, Finland and Iceland.
  3. Listing a company with a small revenue base and/or negative earnings can be useful for all stakeholders. Liquidity of shares, stronger business practice discipline and  transparency of operations are the benefits of being present on a stock exchange.
  4. Educating founders and institutional investors on the smaller markets as a strategic option to participate in is important for other countries than Sweden.

As an Icelander living in Iceland, I wish that we shall see a more mature approach towards the equity markets for all kinds of companies, whether in the startup phase or at a later stage, here in Iceland. At least I encourage founders and shareholders to seriously consider the benefits of using to stock market to attract more capital through an IPO (Initial Public Offering) or by listing the shares on the available stock exchanges in the Nordics.

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