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From Startup to Scaleup 2025

EIFO's annual review of capital markets for Danish startups and SMEs, "From Startup to Scaleup 2025," shows a significant decline in venture investments in the first half of 2025.

News 27. August 2025

Photo: EIFO's annual review of capital markets for Danish startups and SMEs, "From Startup to Scaleup 2025," shows a significant decline in venture investments in the first half of 2025.

Danish equity financing has had an overall drop in total volumes in the first half of 2025, but Denmark’s startup ecosystem continues to demonstrate a strong deal flow and attract interest from international investors, particularly within core sectors such as Life Science- and Software technologies.

At the same time there seem to be a degree of substitution from equity to debt that has become more accessible and attractive for growth companies. Those are some of the key findings in EIFOs annual report “From Startup to Scaleup 2025” which provides an overview of the Danish capital markets over the past 18 months, covering 2024 and the first half of 2025.

“From Startup to Scaleup 2025” offers a comprehensive analysis of key trends across various financing segments and examines how these developments are impacting Danish startups and SMEs' access to risk capital.

Despite a significant drop of capital invested in the first half of 2025 confidence in Danish innovation remains solid. Investors are more selective, and activity is increasingly concentrated in the earliest stages, resulting in smaller average round sizes, but the fact is that the Danish startup ecosystem continues to show a strong deal flow

Erik Balck Sørensen, CIO i EIFO

The 2025 report that was presented today at the Tech-startup and investor event TechBBQ in Copenhagen shows that Denmark remains one of Europe’s leading VC markets relative to GDP, with over EUR 3 billion invested from 2022–2024 and a continued strong focus on early-stage funding. 2024 saw Danish venture capital investment volumes stabilize after two years of global decline, but activity dropped 44 % in the first half of 2025.

“Despite a significant drop of capital invested in the first half of 2025 confidence in Danish innovation remains solid. Investors are more selective, and activity is increasingly concentrated in the earliest stages, resulting in smaller average round sizes, but the fact is that the Danish startup ecosystem continues to show a strong deal flow,” CIO at EIFO, Erik Balck Sørensen said.

At the same time declining interest rates and the easing of Danish banks’ credit standards for SMEs have made debt financing more accessible and attractive for growth companies. In parallel, EIFO has experienced a slight uptick in lending and guarantee activity to SMEs in the first half of 2025, compared to the subdued levels of 2023 and 2024, the report shows.

“It seems that more companies could be substituting equity with bank loans or venture debt to finance their operations and growth. Within the startup segment we have revised and launched a more favourable loan to match and boost private investments into early-stage startups to secure operating capital without diluting the founder’s stake and we now see more startups taking advantage of this,” Erik Balck Sørensen said.

Key takeaways from the report

Early-stage capital:

  1. Public grants provided non-dilutive early-stage funding to over 500 Danish startups and SMEs in 2024, supporting innovation and product development.
  2. Danish crowdfunding activity declined by 45 percent in 2024, but upcoming regulatory changes may revive equity crowdfunding from 2025.
  3. Business Angels in Denmark were more selective in 2024, focusing on fewer but larger investments.

Venture capital:

  1. Denmark remains one of Europe’s leading VC markets relative to GDP, with over EUR 3 billion invested from 2022–2024 and a continued strong focus on early-stage funding.
  2. VC activity slowed significantly in the first half of 2025, with a 44% drop in capital invested compared to H1 2024, as investors became more cautious amid geopolitical and economic uncertainty.
  3. Biotech continues to dominate Danish venture capital by investment volume, driven by large funding rounds, underscoring the sector’s central role in the VC landscape.

Buyout capital:

  1. Buyout activity in Denmark saw a modest recovery in 2024, but H1 2025 activity is pointing to a potential full-year decline.
  2. Add-on investments continued to account for the majority of buyout investments in 2024, indicating that private equity firms prioritized scaling existing portfolio companies.
  3. Danish buyouts are increasingly funded by foreign investors, with international capital involved in 80 pct. of deals in H1 2025 — raising concerns about exposure to global market volatility.

Debt financing:

  1. Corporate lending in Denmark has rebounded, growing 6.2 pct. year-on-year by May 2025, driven by improved macroeconomic conditions.
  2. Banks have gradually loosened credit standards for SMEs since late 2024, easing access to debt financing for Danish companies.

IPO:

  1. Danish IPO activity has remained muted since 2022, with no new listings in 2024 and continued investor caution driven by market volatility and geopolitical uncertainty.
  2. Despite a recovering stock market through 2023 and early 2024, renewed volatility — especially in Q4 2024 and early 2025 — has discouraged companies from going public.
  3. Recent Danish tax reforms may boost IPO activity.
Read the full analysis here: From Startup to Scaleup 2025