How Sweden built one of Europe's hottest startup ecosystems

Sweden has become one of the world’s hottest tech hubs, building on the legacies of Spotify and Klarna with a fresh wave of startups that includes legal AI company Legora and vibe-coding tool maker Lovable. Cherry Ventures general partner Sophia Bendz discussed what’s driving Stockholm’s ecosystem on TechCrunch’s Equity podcast, pointing to a cultural shift: being a founder is now considered cool.

Bendz said that when she worked at Spotify years ago, the ambitious career move was to become a banker or go into consulting. That’s flipped, she said: “Now, I think a lot of people optimize for creating stuff and optimizing for both sort of freedom and probably wealth.”

The numbers back up the momentum. Sweden’s startup ecosystem has raised $2.8 billion in funding so far this year, according to Dealroom, and is projected to hit at least $5 billion. That would top last year’s $3.2 billion, though it would still fall short of the $8.5 billion raised in 2021 — a reflection of a venture market that cooled after that peak and, per the data, is now starting to heat back up again. Other prominent names from the ecosystem include health-tech company Neko Health and autonomous freight company Einride.

Bendz said the latest wave of Stockholm startups is benefiting from mentorship and resources provided by the ecosystem’s first generation of entrepreneurs, some of whom have become repeat founders — Spotify founder Daniel Ek, for instance, also founded Neko Health. She sees that pattern repeating: employees leaving Lovable, she said, are increasingly spotting opportunities to build their own companies with the same technology, and people who’ve worked at Lovable and Legora tend to be entrepreneurial-driven and keen to start their own companies.

American investors have taken notice, too. Bendz said more U.S. investors have been flying in to meet with Stockholm founders and hand out term sheets, which she called a sign the ecosystem is doing something right.

Why it matters

A funding trajectory that’s already ahead of last year and closing in on the 2021 peak suggests Stockholm’s startup scene is compounding on itself, with repeat founders and departing Lovable and Legora employees feeding the next generation of companies.