The NVPI was created to establish a credible index showing the actual returns from the Nordic venture capital market. The index is an efficient tool to communicate the performance and risk profile of the Nordic venture capital market and will help attract more capital to Nordic start-up and scale-up companies.
The NVPI is based on the data from 10 venture capital firms, 40 funds and 768 portfolio companies, and covers the period from 2000 – 2019. The index is based on full cash flow information from all participating funds.
"We must be a world-leading region for startups and scale-ups"
The NVPI was mandated by Nordic Venture Network and created by Henrik Talborn at Swedish House of Finance at the Stockholm School of Economics. Partial financing and support for the project have been received from Nordic Innovation.
“The Nordic prime ministers have the ambition that the Nordic region should be the most integrated and sustainable region in the world. If the Nordic region is to be economically sustainable, we must be a world-leading region for startups and scale-ups. This requires that early-stage businesses be able to attract sufficient capital. A new report shows that investors in these kinds of businesses in the Nordics have higher return on investment that investors in more mature businesses, says Svein Berg, Managing Director at Nordic Innovation.
Nordic venture capital has created superior returns since 2000
The net returns for the venture index are higher than for the public market equivalents 2000-2019. The estimated net IRR for the entire period is 15.9%, which compares to a net IRR of 13.1% for the Nordic Small Cap Index and 12.8% for the Nasdaq 100 in the same period. Taking into consideration the fee structure, with higher fees in the first years of venture funds compared to the fees in later years of the funds’ lifetime, the estimated net IRR is even higher with 23% for the entire period.
For more information about the work with NVPI, please contact Nordic Innovation Senior Adviser Mikael von Dorrien.