Who Will Fund the Next Nordic Breakthrough?

The NLSDays supersession titled “Financing the Future of Life Science – Strategies, Trends, and Opportunities” brought together leading investors, financial strategists, and venture capitalists to explore the current and future state of financing in the sector.

The panel, moderated by Renee Lucander, CEO of Hansa Biopharma, featured Yohan Christensen, Partner at HealthCap, Sonia Benhamida, Managing Director at BlackRock, Kristofer Klerfalk, Entrepreneur and Managing Partner at Life Science Invest, and Peter Horn Møller, Founding Partner at Marigold Investment Management.

Renee Lucander opened up the discussion with a perhaps surprising fact: In Europe, and particularly in the Nordics, the market has recently outperformed the US. There are several reasons for this, she said, including falling interest rates, which directly affect risk assessments for investors, and the growing need for Big Pharma to fill upcoming gaps from patent cliffs.

Early-stage financing

The panel discussed the issue of the proliferation of spinouts from academic institutions in Europe, which is made easier by local rules like Sweden’s teacher’s exemption, and how it might dilute early-stage financing. “Do we really have the capital depth to take all these spinouts forward into the clinic and beyond? – And is it a problem if only a few get funded?” asked Renee Lucander.

“It’s actually healthy to have competition. It pushes the market to ask the right questions”, commented Kristofer Klerfalk, adding: “Investors, incubators, and the ecosystem all have a role in demanding that early-stage spinouts fill their gaps”. While not all projects will make it, the process frees up competence for the others, he explained. ”Given the small size of the Nordic countries, we need as many knowledgeable professionals as possible.”

Peter Horn Møller agreed, arguing that it’s not a problem if only the best survive, as that’s innovation. “The real problem is when the wrong projects are born”, he said.

The Nordics, despite being a region with high-quality science and infrastructure, is not always good at turning that potential into commercial success. Horn Møller’s solution is that selection should start early – at the university level. “Qualifying projects early doesn’t require huge funding, just time and expertise. Once that selection happens, the companies that are incorporated are much more likely to succeed and compete for capital effectively”, he argued.

Lack of Nordic VCs

Delving further into the financing situation in the Nordics, the panel discussed the fact that the region has top-tier science on par with London, Zurich, Basel, Boston, and the Bay Area, yet many companies still struggle to take the next step.

Kristofer Klerfalk thinks part of the problem is that there are too few venture firms in the Nordics. “We need more international VCs to come here because our science is world-class.”

He added that the Nordics also need to allow failure: ”In the region, we tend to avoid letting people fail, but failure is essential learning. In the US, biotech CEOs often fail multiple times before succeeding – we should embrace that mindset.”

He also noted that innovation and entrepreneurship training should be included earlier, even in medical education, so professionals see how they can play a role in innovation beyond clinical work.

Peter Horn Møller argued that the issue should not be about the amount of capital, but rather how it is used: “Whether there’s too much or too little money, you need to plan and use it wisely.”

Later-stage financing

Europe doesn’t have the same capital depth or unified ecosystem as the US, and investors here tend to be more risk-averse. The panel was asked how this affects the way companies raise capital.

Yohan Christensen argued that the venture model as we know it is dying. “Traditionally, VCs took early risks, and successful companies later raised money at higher valuations. That’s no longer happening”, he said. Investors are waiting until risk is gone, often post–proof of concept: “So who’s left to take the early risk? It’s becoming a systemic issue”, he argued.

The panel noted that historically, European companies raised smaller, stepwise rounds, whereas now there are larger early-stage rounds designed to take companies further. But this also concentrates capital among fewer companies, making the ecosystem more competitive. Structural consolidation also affects financing dynamics. Europe lacks mid-sized pharma companies, the natural acquirers and partners for biotech. “When big pharma buys them, they often disappear from Europe. That weakens the ecosystem”, Renee Lucander concluded.

The panelists highlighted that we might start seeing a shift as some US scientists are looking to relocate to Europe. At the same time, European pension funds increasingly prioritize equality and sustainability, while US funds move away from it. If European capital starts staying in Europe, it could strengthen the ecosystem.

“European pension funds collectively manage trillions, yet only 0.01–0.03% is allocated to innovation or venture capital. In the US, it’s about 20 times higher. That’s a huge untapped potential”, said Yohan Christensen.

Renee Lucander pointed out that the risk-averse nature of Europeans is the culprit: “The public backlash when investments fail discourages risk-taking. Some failure is inevitable. We need a mindset shift in Europe to accept that”, she concluded.