Sweden’s Behold Ventures raises $25.9M to invest in Nordic gaming startups

Behold Ventures has raised $25.9 million to create a new gaming venture capital fund focused on funding Nordic gaming startups.

Behold Ventures is a new venture fund focusing entirely on investments in gaming start-ups, mainly in the fast-growing Nordic industry cluster in Sweden, Norway, Finland, Denmark and Iceland.

The fund is Sweden’s largest game-focused fund, said Karl Magnus Troedsson, cofounder of the fun, in an interview with GamesBeat. Troedsson, a veteran of Electronic Arts’ DICE studio, started the fund in the past year with Sigurlina Ingvarsdottir (CCP, EA/DICE) and Magnus Kenneby (Sequent).

It’s a kind of micro-fund operated by industry specialists.

“We’re a small venture capital fund and are passionate about our small sector,” Troedsson said. “We believe that we can do better than many others at picking the winners inside of this sector. We can also do better than others helping our portfolio companies create value, and help them become great companies. And if we do this right, we will not only help usher in a new generation of game developers, but we’ll also make great business for ourselves and our limited partners in the fund.”

Behold Ventures was established to solely target early-stage investments in video game start-ups, primarily in the Nordic markets. The strategy is to use the founders’ long experience and network from the gaming industry to successfully find and invest in start-ups, help to create and accelerate value-building, and provide significant returns in the long term.

Unique knowledge bank

In addition to the founders’ own expertise, the fund has a broad network of hand-picked experts and advisors from the Nordic gaming sector, forming the foundation of a uniquely composed experience bank. It also has more expertise among its limited partners.

“I don’t think I’m exaggerating when I say 99% of the capital (invested in us) is strategic money — companies, veterans and experts from the industry,” he said.

The intention is to let the portfolio companies have access to specialists in all areas of the industry such as production, marketing and business development.

Troedsson said the fund will try to create conditions for founders to build game studios and launch games with great potential on the global market. A game development veteran who is part of the expert network, and actively helping the fund’s portfolio companies, is Martin Walfisz, the founder of Massive Entertainment.

”The uniquely successful Nordic games industry is more relevant than ever on a global market, and it’s clear that a steadily growing global audience considers video games to be the most rewarding form of entertainment,” Troedsson said. “We believe that there is great value to be found in the sector if it’s done by investors who truly understand the gaming industry and can help entrepreneurs build highly successful and lasting companies.”

A strong Swedish game industry

It makes sense that the fund is based in Sweden, as opposed to Finland. Thanks to successes like Rovio and Supercell, Finland has no shortage of venture investors financing its startups. But Sweden has had fewer big successes despite having a ton of gaming talent. The company will look at everything from free-to-play games to PC, console, and mobile.

In its most recent report in 2022, Sweden’s game ecosystem report said the local video game industry has grown by 1,348 employees to a total of 7,944 employees in Sweden, an increase of 20%. For the first time ever, Swedish game companies have a higher turnover through their foreign subsidiaries than in the domestic industry. In 2021, Swedish companies’ sales from foreign subsidiaries amounted to $3 billion, compared to sales of $2.6 billion for Swedish companies. These numbers also mean that Swedish-developed video games now account for 4.1% of Sweden’s total service exports.

Troedsson said the Swedish game industry has been very successful. But he notes it could be even more successful with more funding assistance.

“Behold’s three founders have come together because we share this conviction, know that together we can act as catalysts and thereby achieve great results. We have successfully worked in the video games industry throughout our careers and know what it takes to create games that become global successes,” Troedsson said. “We also have a world-class network consisting of highly experienced and dedicated experts that are deeply rooted in the Nordic gaming ecosystem and beyond. In addition, we have a large group of strategic investors who have contributed to the fund and will be long term assets for our companies. Together with all our partners, it provides our portfolio companies with an outstanding opportunity to grow successfully.”

Behold Venture’s goal is to close the fund at double the size it is now, while now also opening the fund to more traditional investors. So far, Behold has twelve companies in the portfolio and will continue to invest at a high rate in the coming years.

Leaving DICE

Troedsson left DICE, the EA-owned studio making Battlefield and Star Wars titles, in 2016, after 15 years at the studio. He later joined Raw Fury, a publisher of titles such as Kingdom and Kathy Rain. At the time, he said he wanted to spend his time helping small developers realize their dreams and to make sure innovative games succeeded. He also started making angel investments.

“The main reason for that was because I wanted to get back to my roots supporting teams,” Troedsson told me in our recent interview. “I had something I felt passionate about, and then [angel investing] made sense. After doing that for five years, I had this clear view on that something was missing in the Swedish market. And that’s basically an early-stage venture capital fund.”

The idea was to build a bridge between angel funds and financing from bigger venture capitalists or publishers.

“What was missing was the support that these teams needed,” he said. “We got a nice group of people together, the founding partners with similar backgrounds.”

Of the trio, Kenneby has run funds and startups before. Ingvarsdottir worked at EA and DICE on games such as Star Wars: Battlefront, Mirror’s Edge, and FIFA. There is the network of advisers and experts helping out.

“The reason for doing this is because we can help out the teams and therefore create value both for the companies and also for our limited partners in the fund,” Troedsson said. “The secondary objective — this is quite personal for me — is that I’m very passionate about finding all the ways I can to help a new generation or even better several new generations of game developers in the Nordics succeed. I’m very grateful for the career I’ve had in the industry. And I know there’s a lot of people (feeling the same), that we want to be part of helping a new generation.”

Troedsson said he expects the investment per startup will be around $516,000 to $1.033 million. With follow-up funding in subsequent rounds, the amount could grow to $3 million. Troedsson thinks about 75% of the fund’s investments will be in game developers.

“We’re all computer game nerds. Inside of that slice of the industry, we look at mainly the big game developers. But we’re also interested in publishers as an example,” he said. “We also do a little bit on the tools, tech and infrastructure side.”

One of the investments is Sunscorched Studios in the United Kingdom. It has a distributed indie team creating high-production values on a shoestring budget so far. Another is Sweden’s Lurkit, which wants to change how developers and publishers do direct influencer marketing with a new platform. Another investment is Sweden’s Spellscaper, a small company creating generative AI technology for games.

Troedsson believes that multiplayer games are doing particularly well now, and the company will consider such investments. And he noted that user-generated content platform like Roblox are taking off.

“A lot of companies are picking up on realizing that the idea of a game can be more than a game,” he said.