Fund launches for startups at the Stockholm School of Economics

The Stockholm School of Economics is tackling a common problem in the venture capital industry; unrealistic expectations on short-term returns. The school’s incubator SSE Business Lab is now focusing on long-term strategies to help potential break-out startups.

The startup incubator is closing a new 40 million SEK fund with an evergreen structure, where a portion of the returns will be reinvested.

“This means that we’ll only raise one fund with a long-term investment horizon, where investors see the value of letting companies grow over time and realize their full potential,” SSE Business Lab CEO Julia Delin said. “Something the classic VC firms don’t allow them to do today.”

Delin is helping launch and lead the incubator’s first venture capital fund, SSE Ventures. She says starting today, startup founders from SSE Business Lab will receive an investment when they join the Incubate program.

“This is a project that I’ve worked to make a reality for almost 4 years, and it really took a village to raise this kid, I’ll tell you that,” Delin said through a post on Linkedin announcing the news.

Backed by notable investors

The 40 million SEK fund will become 100 million SEK next year, with plans to invest in 20 startups. Delin says she’ll be the youngest CEO in Sweden for a fund this size.

The fund is backed by Bonnier Ventures alongside notable people like Anna Nordell-Westling, Sven Hagströmer, Anna Kinberg Batra, and Sebastian Knutsson.

Supporters of the new fund believe this pivot to long-term investing will boost the potential of innovative new companies.

“Long-term growth and sustainability have to be more important than short-term profitability, otherwise startups risk losing their momentum,” Budbee Founder Fredrik Hamilton said. The Sweden-based tech company got its start at SSE Business Lab several years ago, and this month it announced plans to merge with Instabox.

Since its inception in 2001, SSE Business Lab has supported over 250 companies including unicorns like Klarna and Voi. Previously, the incubator hasn’t made any investments in them until now. The school says they’ll be able to both support its companies with early capital and make larger follow-on investments.

“Long-term thinking amplifies the potential returns,” Delin said.

The fund will make its first investments in the companies admitted to SSE Business Lab’s Incubate program within the next few weeks.