In a region famed for its collaborative spirit and global tech champions, byFounders has emerged as one of the most influential early-stage venture capital funds in the Nordics and Baltics.
Headquartered in Copenhagen, the firm backs globally ambitious startups at the pre-seed and seed stages, with initial tickets typically ranging from €500,000 to €4 million and the capacity to follow on in later rounds.
Founded by experienced entrepreneurs, byFounders is built on a “founder-first” ethos, supported by a collective of more than 40 seasoned founders and operators who actively help portfolio companies scale across Europe and beyond. The firm has invested in notable startups such as Lovable, Monta, Corti, Peergrade (acquired by Multiverse), and Omnio.
“We started almost like a grassroots movement by unicorn founders and operators,” recounts Sara Rywe, Managing Partner at byFounders
Community is often overlooked when founders are raising capital, but when they’re moving to New York with their families or launching internationally, the community becomes crucial. She contends:
“In the Nordics, we’re exceptional at helping each other — even competitors. Investors here are friends and share deal flow.
In the US, top funds rarely talk because they want to protect stealth deals. The Nordic community spirit is a real advantage.”
Rywe’s journey shows there’s no one path to VC
Rywe, originally from Sweden, fell in love with entrepreneurship very young. It all began when I was 17 and started a dance school for young kids with low self-esteem.
“That was the moment I realised you can have a job that’s your passion — where you decide what to do and how to do it."
Rye comes from a simple background, with no family entrepreneurship or academic tradition. She previously worked in food services and retail.
“I was the first in my family to get a university degree. That opened up my eyes and set me on some adventures.”
She worked for tech startup Fandom in New York and another called MyCube in Singapore. She also started a network for young entrepreneurs in Sweden. Then she won a spot to study at the Stockholm School of Economics through an entrepreneurship award, where the prize was a place at the school.
After three gap years, she went to university, gaining a Bachelor in Business & Economics from Stockholm School of Economics, an MBA from INSEAD and Wharton Business School, and spent two years as a Kauffman Fellow.
Following a stint in consulting, she joined byFounders six years ago. At that time, the fund was still a startup — only a year and a half into its first fund.
She got the chance to help build the fund almost from scratch. When it raised its second fund four years ago, she became a partner. She recently closed the first round of the third fund, where she serves as one of the GPs. The firm makes approximately 8-15 investments annually
The “New Nordics” outperform Europe’s big three — and byFounders knows it
Rywe admits that people always ask why the firm isn't broadening its geographic scope now that it's raising its third fund.
“Since day one, we’ve focused on what we call the “New Nordics” — the Nordics and Baltics. We coined the term internally, and now it’s widely used in the industry.”
Rywe contends, “there’s still so much alpha to gain in this region. If you look at the stats — most unicorns per capita in Europe, highest graduation rates from Series A to exit, and the lowest capital required to reach unicorn status — the New Nordics outperform the UK, France, and Germany.”
There are many reasons for this. One is the early huge successes — not just unicorns, but $40 billion+ outcomes like Spotify and Klarna that created momentum and reinforced talent and ambition.
Then there’s culture.
“Lazy Nordic founders”? A new generation is proving otherwise
Rywe praised the Nordics' “incredible safety net.” She admits that it can make people too comfortable, but it also allows those who want to build big things to take huge risks because they know they’ll be caught if they fall.
"The level of risk-taking possible is extremely high compared to the rest of the world.”
Further, the small populations of countries like Sweden and Denmark also mean that founders have to think globally from day one, which benefits the ecosystem.
According to Rywe, Nordic founders are known for being intellectually sharp — “our educational institutions are excellent. But there’s still a perception, often true, that we’re not hardworking enough. Americans have the 'work until you drop' culture."
"In the Nordics, we have 18 months of parental leave and six weeks of vacation. That’s fantastic for society, but for the 0.1 per cent building the next unicorns, they need to fight against the “lazy Nordic founder” stereotype.
We’re seeing a new generation of founders who are passionate and willing to match the intensity of American companies.
Anton from Lovable is a great example — they worked from our office, and you could show up any time and they’d be there. This new generation knows the trade-offs but wants to compete at that level.”
Europe needs bold bets, not safe plays
Rywe asserts that byFounders likes to take “as much risk as possible — which is counterintuitive in most investment areas. But only really risky decisions have the potential for great upside.”
She contends that “we don’t “spray and pray,” because in Europe we don’t have trillion-dollar companies and few decacorns.”
“To deliver top returns, we need proper ownership. We can’t rely on massive exits to make up for tiny stakes. So we aim to own 10–20 per cent of companies at exit and work closely with founders to deserve that stake.”
byFounders invests in about 35 companies per fund. “Some people think they’re smart enough to do pre-seed with 10 companies, but I don’t. You need enough shots on goal to hit the one that makes all the difference,” shared Rywe.
The new Nordics’ next act: becoming Europe’s AI engine
According to Rywe, up until two years ago, the region’s strengths were consistent — Denmark produced strong climate companies, Sweden and Denmark were strong in health tech, Sweden excelled in consumer, and enterprise tech was big thanks to large enterprise customers. But in the last two years, AI has changed everything with the birth of globally competitive players building fundamental layers of the AI stack.
“We now have some of the best AI companies globally, both at the application layer and under the hood,” asserts Rywe.
“Infrastructure-wise, companies like DataCrunch are building GPU clusters in the Nordics using cold climates and renewable energy."
In risk and governance, many companies are working on AI sovereignty in Europe. And there are even companies building LLMs, like Corti, which has trained on healthcare data for eight years and is outcompeting others in that vertical.”
Rywe shared that as a board member at Corti, she sees huge healthcare institutions that want to use AI but are reluctant to rely on American players training on random data sets.
“European institutions are keen to work with local, trusted solutions.”
Rywe is optimising for the future, admitting “this is the most exciting vintage of my adult life.”
“I’m only 35, but since the internet boom, nothing compares. The technology is exciting, and people are solving real-world problems. There are so many untapped aspects of AI.”
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