Northvolt named most funded startup in Europe with €5.15B in funding

Swedish low-carbon battery maker Northvolt ranks first on the list of most-funded startups in Europe, with a total of €5.15 billion raised to date, Pitchbook reported.

In its latest capital raising effort last year, Northvolt secured €1.03 billion from several notable investors, including Baillie Gifford and AMF. As the funding came as convertible notes, these investors will eventually become Northvolt’s shareholders.

Co-founder and CEO Peter Carlsson said the company used the latest funding to expand its production capacity. Carlsson explained that there was rising demand for cleaner batteries due to the shift to electric vehicles and overall consumers’ awareness of the importance of using green products.

Founded in 2016, the Stockholm-based startup provides high-performing batteries containing a special lithium-ion formula called Lingonberry NMC.

As each Northvolt battery unit can accommodate more than 1,000 charging cycles, it provides cleaner power solutions for various applications, including automotive, construction, and micro-mobility.

Furthermore, the startup has created plans to reduce its carbon footprint by 90 per cent and use recycled materials for 50 per cent of its production by 2030.

Fintech dominates Swedish VC

Swedish fintech Klarna takes up the second-highest spot after Northvolt, with €4.32 billion raised since its establishment. Start Campus, a sustainable data centre provider, comes third with €3.93 billion in funding. Digital banks Revolut and N26 are also in the top ten most-funded startups list despite not having raised funding since 2021.

Pitchbook reported that the median venture capital amount raised in 2022 was €3.4 million, up from a €2.6 million median in 2021. Data showed that the growth of funding especially occurred in early-stage startups.

Pitchbook’s analysis explained that early-stage startups are more protected against macroeconomic conditions, including the monetary tightening that many central banks are implementing today. Investing in early-stage companies also requires less monetary commitment from investors.

The most popular sector receiving venture capital was fintech. Over the years, fintech’s ability to attract investors has resulted in large-size contracts and big company valuations.