Swedish seed financing is getting a boost with the launch of KTH Seed Capital. A total of SEK127 million (EURO14 million) has been committed to the fund from the Royal Institute of Technology, the Swedish Industrial Development Fund, W Capital Management, SEB Fretagsinvest and KTH Holding.
KTH is a leading institute of technology based in the Nordic region. Jan Sundberg, chairman of KTH Seed Capital, said: “KTH-related spin-offs have been listed at a value exceeding SEK20 billion over the past few years. By creating KTH Seed Capital, we hope to develop the potential that resides in KTH.”
KTH Seed Capital will invest in high tech companies in the early phases of their development and will facilitate the commercialisation of technological projects associated with KTH. Typical investment size will be between SEK5 million and SEK10 million. The fund plans to invest in around 10 companies in the next four years. The KTH team will be based on the KTH Campus in Kista Science City and will be run by Jakob Svrdstrm.
Lars jefors, president of the Swedish Industrial Development Fund, says the formation of the fund will give a considerable boost to seed capital financing in Sweden, an area that is currently lacking in funds. He said: “The company will legitimise research at KTH in a way that I am convinced will generate genuine returns.”
The Swedish Industrial Development Fund and W Capital Management will each take a 39.4 per cent holding in the venture, SEB Fretagsinvest will take a 19.7 per cent stake and KTH Holding will take the remaining 1.5 per cent.
Seed stage investing is slowly gaining pace in Sweden. In 2001 seed investments reached SEK368 million in 86 companies compared to SEK240 million in 81 companies in 2000, according to Thomson Financial Venture Economics.