Industrifonden’s history
From lender to venture capitalist to broad-ranging financier. That summarizes Industrifonden’s development over nearly 30 years. Since 1979 the fund has provided around 1,000 Swedish companies with a total of SEK 10 billion in financing. Its focus has shifted several times as conditions in the marketplace changed.
Click on the years below to learn more about Industrifonden’s history and development.
1979 - Swedish state establishes Industrifonden
The Swedish state establishes the Industrifonden Foundation to finance projects primarily involving large companies in order to help Swedish industry expand and be more competitive. This is done through various types of soft loans and guarantees. The initial funding is SEK 300 million.
1980 – Loan granted to Kabi
One of the most successful projects Industrifonden finances begins with a loan to Kabi to develop the human growth hormone Genotropin, used to treat certain children and adults with growth hormone deficiency. This is Sweden’s first industrial hybrid DNA project. Kabi (which became Kabi Pharmacia, then PharmaciaUpjohn and now Pfizer) quickly becomes the market leader in the field and in the process helps many children whose bodies do not produce enough growth hormone to develop normally.
1984 - Industrifonden made permanent
The Swedish parliament decides to make Industrifonden permanent. At this point Industrifonden is involved in 100 different projects and has provided SEK 950 million in various forms of grants. Operations grow quickly and by 1987 Industrifonden has granted a total of SEK 2 billion since inception. Among the companies receiving project loans from Industrifonden are Volvo, Saab, SSAB, ASEA and Kabi Vitrum.
1986 – Loan to Micronic
Industrifonden grants its first loan to Täby-based startup Micronic Laser Systems, which develops and manufactures an advanced laser pattern generator used to produce photomasks. Today it is the world leader in photomasks for flat panel displays. Getting there has been a rocky road, however. After filing for bankruptcy in 1988, Micronic is rescued by its employees, who invest their own money. Industrifonden grants a new loan and Småföretagsfonden, a foundation that supported small businesses, joins as a co-owner. In 1992 Micronic nearly goes bankrupt again, but survives partly thanks to support from Industrifonden. The company is listed on the Stockholm Stock Exchange in 2000.
1992 - Industrifonden changes its name
After a review, Industrifonden changes its name to Industri- och Nyföretagarfonden. New regulations also result in a change in the fund’s mission, and it begins to support entrepreneurs through new business loans and loans to female-owned startups. This continues until 1995, when the loans are transferred to Almi. During the three years it offers new business loans, Industrifonden provides a total of SEK 508 million to 1,836 new ventures. In total, 4,000 applications for new business loans are received.
1994 - Shares in Atle and Bure
Industrifonden receives shares in Atle and Bure valued at SEK 350 million. This is the last capital contribution from the state. The shares are sold two years later.
1995 - New rules, new direction
Sweden becomes a member of the EU and has to harmonize its rules on state subsidies, which prevent the state from supporting large corporations. Industrifonden then shifts its focus to small and medium-sized companies. A new law is passed that makes foundations more independent.
1996 - Seed capital through convertible loans or equity capital
Industrifonden adopts new by-laws that entail major changes. The fund shifts direction to provide capital to early stage companies through convertible loans or equity capital. In the same year the fund acquires Malmöhus Invest (MIAB), marking the start of an investment that ten years later would make Industrifonden, together with business angels and private investors, co-owner of 11 regional venture firms around Sweden. At the same time Industrifonden begins a major expansion of its operations in terms of staff and invested capital.
1998 – Prosolvia files for bankruptcy
Industrifonden suffers its largest loss when the IT company Prosolvia files for bankruptcy. The virtual reality specialist had undergone a rapid international expansion. Industrifonden, the largest owner, loses SEK 140 million in the bankruptcy.
2000 – IT boom and aggressive investment stage
The new millennium begins with the IT boom and an aggressive investment stage for Industrifonden. The subsequent crisis hurts the entire business community, including the venture capital market. Many portfolio companies incur problems, and Industrifonden has difficulty finding financial partners. The fund reports losses for five consecutive years.
2005 - Venture capital firm specializing in seed capital
After years of discussion how to improve early-stage financing in Sweden, the state establishes Innovationsbron, (“the Innovation Bridge”) with Industrifonden as a co-owner. During the first years of the new decade, Industrifonden also takes part in creating a number of venture capital firms that provide seed capital to new ventures based near Sweden’s colleges and universities.
2007 - Broader focus
Industrifonden begins investing in cleantech – environmental and energy-efficiency technology. It also broadens its focus to increase the share of loans to small and medium-sized businesses that want to grow. In 2008 the fund establishes the Industrial Growth business area, which provides expansion capital: loans and equity capital for companies that have already developed products and launched sales, but need capital to expand. The large part of the fund’s investments consists of equity capital for small companies in IT, telecom, electronics, industrial technology, cleantech and life sciences.