As has been pointed out many, many times, lack of diversity is an ongoing problem in the tech startup and VC landscape. It’s a fact that’s long been recognised in the U.S., and it’s of equal concern in Europe. Zoom in on the Nordics region, and the lack of diversity sadly becomes even more acute. A report in 2020 revealed that the previous 10 years witnessed all-men founding teams never receiving less than 83% of Nordic VC funding, while all-women teams received barely 2.2% of funding.
So it’s refreshing to see a VC fund emerge in the region that directly addresses the issues, not just in its team but also in its thesis, as well as investing in some very interesting businesses.
Launched as more of an SPV "nano-fund" by Thea Messel in in 2018 with co-founder Nora Bavey, Unconventional Ventures (UV) now has a VC structure and invests across the Nordics in healthtech, women's health, diversity tech, sustainable fashion, food tech and fintech.
It’s now passed the "half-way" close of its targeted €30 million fund to invest solely in impact tech companies with diverse founding teams and founders.
LPs backing the fund include European venture capital giant Atomico, the Export and Investment Fund of Denmark (EIFO), Investinor (an evergreen investment company funded by the Norwegian government), and Danish investment firm Chr. Augustinus Fabrikker. New LPs joining the fund include The Case for Her, a Stockholm-based firm specialized in investments in women’s health issues and The Inner Foundation, founded by Northzone founder PJ Pärson and his wife Annika Sten Pärson.
UV’s portfolio companies so far include four main standout companies.
Out of its investments from this fund so far, Climate X (U.K.), has raised the most at €10.65 million. This climate analytics startup is closer to the fintech space, as it assesses the climate risk in to for asset holders.
Ocean Oasis (Norway) is in sustainable desalination using wave energy. Messel said: “Desalination is quite a CO2-intense process, but they’ve come up with a solution of using wave technology, enabling not only more freshwater to be accessible, but also creating and producing it in a sustainable way.”
SciFree (Sweden) offers open access to research for universities. Bavey said: “In a world where we have fake news and research being attacked imagine what that will mean for entrepreneurship and innovation, having access to an open source database of research? It's just incredible. This startup creates transparency over who is getting funded at the end of the day because there's also a lot of issues behind the research.”
And Meela Health (SWE) is a matchmaking tool for therapists and clients targeting women first. Bavey commented: “Meela is matchmaking tool for therapists and clients targeting women first, but also now extending to men. Over 60% of people go into therapy drops off before the third session, but Meela drop off rate is to less than 2%. So it really speaks volumes about them enabling AI for the matchmaking.”
Other companies in the new fund include:
FJONG (NO) - circular fashion
Leia Health (SWE) - personalized parental health
Equality Check (NO) - diversity and inclusion analytics
DORA (DEN) -digitizing towards greener freight transport
The next target for the fund will aim at synthetic biology startups.
Among these investments, UV claims 75% are founded by all-female teams, and over 25% have a founder or co-founder from an ethnic minority. Moreover, 67% of the portfolio focuses on combating climate change, while 20% addresses female health-related challenges.
Prior to founding UV, Copenhagen-based Messel was a banker who went on to co-found and develop platforms supporting tech and impact startups. She’s also a former member of UNEP-FI working group for Sustainable Banking.
Bavey is a former edtech founder who built and launched concepts for supporting underrepresented founders in the Nordics.
Over an interview, Bavey told me that although the new fund is a full-blown VC stucture, “it’s easier to decide on diverse investments because we've been following them for so long.”
While she admits "there's a lot of impact funds popping up” in the Nordics, she says the uniqueness of UV is “not only do we only invest in those type of diverse founders, but we are also the only fund that also invest only with impact at the core.”
The pair also think women's helath remains a space waiting to be unpacked further by impact funds: “If we look at female health, we're seeing some really interesting deals there. Startups in that space are targeting problems that none has really thought about. It's not just about fertility or menstruation, there are a lot of other layers in between and that's what we're also excited about to explore more,” added Bavey.