Even though the Danish ecosystem still favours SaaS- and fintech oriented ventures, there is a growing focus on verticals such as greentech, food/agrotech, and healthtech, signalling a shift in the investment landscape. According to our data, greentech has an equivalent share (60%) of popularity with SaaS, in terms of investments made, whereas Healthtech boasts a 48% share of investments; equivalent to that of fintech and food/agrotech<span class="superscript" >3</span>. As such this entails that the top four verticals for the Danish ecosystem are SaaS (60%), Greentech (60%), Healthtech (48%), Fintech (48%) as seen in Figure 4.
Seen from a structural perspective, this differentiation is a positive development and an important driver for supporting the continued expansion of the Danish investment ecosystem. Increased diversity of companies, technologies and focus areas heightens competition and professionalises the investment cycle while lowering technological compartmentalisation. A larger market will therefore generally yield higher levels of funding, increase the proportion of startups, and support the development of new ventures.
Secondly, the increased relevance of greentech and healthtech is a welcome development for Denmark, as market potential for both verticals are set to grow in the coming years.
The potential for the Danish life science ecosystem is set to an increase to a potential added value of 46,5 billion € over the coming years⁴, while the focus on greentech maintains the Danish business sector’s leading position in environmental technologies, with current exports and revenue totalling 12 billion € and 33 billion €⁵ respectively.
The average share of impact investments across the surveyed investors’ portfolios is equal to 56%, as seen in Figure 5. However, this is only an average account so the actual proportion for some investors might be higher. For example, four of the surveyed respondents answered that 100% of their portfolio is focused on impact. However, 66% of surveyed investors equally mentioned that they invest in the SDGs, which seems to be higher than the aggregate share of impact investing in their portfolios. This signals a potential discrepancy in not necessarily viewing SDG focused investments as part of impact investing, and could imply that the SDGs are still primarily seen as a communication tool. Comparatively, impact investing tends to have a more streamlined and structured approach in relation to gauging the social or environmental return of investment.
Only 24% of surveyed investors mention that SDG focused investments or impact investing were required by their limited partners (LPs). The high proportional share of actual impact investing therefore underscores that sustainability is viewed as an important feature by the investment/management team and is driven by their own aspirations, rather than an external mandate from LPs, as seen in Figure 6.
The State of Sustainability in the Danish Investment Ecosystem