Sweden’s AI start-ups capture growing US interest

Ask anyone in Stockholm to account for why Sweden has achieved so much as an incubator of tech groups from Skype to Spotify and they might give you a history lesson.

In the 1990s, the Swedish government liberalised its tax regime, invested heavily in fibre-optic internet and launched the Hem-PC-reformen campaign, which allowed employers to offer computers to their staff as a tax deductible employee benefit. By 2005, about 75 per cent of homes had a computer.

Joel Hellermark’s household was one of them. “I had a computer at home from a very early age and I taught myself programming. I grew up on the internet. I had nothing else to do than to code and work,” says Hellermark, who sold his artificial intelligence start-up Sana to US software group Workday for $1.1bn in November.

The deal was one of the biggest AI acquisitions in Europe to date, and a testament to Sweden’s status as an AI hub. Lovable, a software development start-up, raised $530mn in 2025 while legal AI business Legora raised $150mn for a $1.8bn valuation — and is now in talks for a new fundraising round that could bring its value to $4bn.

But with American venture capital groups active in all these funding rounds and other acquisition-hungry US companies circling, how long will Sweden’s new start-ups remain Swedish? 

Their success to date has helped Sweden become a thriving, interconnected ecosystem, in which employees of highly successful companies go on to found — and fund — their own start-ups. In tech circles, such networks are typically referred to as “mafias”.

Lovable co-founder Anton Osika was Hellermark’s first employee at Sana, which uses AI to help workers search through their own company’s information. Max Junestrand, Legora’s co-founder, was due to pursue his master’s thesis at Sana in 2023 before instead opting to start his own thing, in which Hellermark was an early investor. Osika, meanwhile, has become an angel investor in a number of Stockholm’s start-ups.

A 2025 report by venture fund Accel found that employees of nine unicorns (start-ups with a market valuation of $1bn or more) founded in Stockholm had gone on to create 208 start-ups across Europe and Israel. Klarna and Spotify were first and second in the rankings; their so-called mafias went on to establish 66 and 61 start-ups, mostly in Stockholm.

“We are all rooting for each other, and I think Stockholm and Sweden are rooting for all of us,” says Junestrand.

We are starting all the companies, but then we’re exporting talent to the US

Whether Stockholm and Sweden can keep them, however, is another story. Between 2008 and 2021, close to 30 per cent of the unicorns founded in Europe relocated their headquarters abroad, with the vast majority moving to the US, according to a January 2026 white paper by the private equity group EQT. Among other factors, it blamed access to capital, noting that few European funds can lead a €100mn financing round.

“We are graduating all the engineers. We are starting all the companies, but then we’re exporting talent to the US. We’re exporting companies very cheaply,” Victor Englesson, a partner at EQT, told the FT. “We have a scale-up issue in Europe.” 

Since its acquisition by Workday, Sana could serve as a case in point. But Hellermark disputes the idea that being bought by an American company — or, indeed, listing on a US exchange, as Swedish tech groups Spotify and Klarna have done — means a scale-up is no longer Swedish, or that Europe is losing its brightest and best companies to the US.

“I think we should think about where the value is created. And for us, the value has been created in Sweden — even if we have American owners,” Hellermark says. 

Some of the biggest players in Sweden’s second wave complain that government policy is holding them back, however.

Junestrand cites the country’s qualified employee stock option system, which allows companies to give equity to staff at a zero strike price and have it taxed as capital gains. It is a generous system in comparison to other European states, but it is capped at 250 employees, making it an issue as they scale. 

“You want people to start companies, but as soon as they’re successful, you punish them. It’s insane. I am extremely surprised that the [government] is not speaking to those of us in the driver’s seat of Swedish innovation. It isn’t like they don’t have our phone numbers,” he says.

Charles Maddock, co-founder of AI-powered web browser start-up Strawberry, cites the issue of employee equity as the most serious facing Swedish start-ups, especially when they are competing for talent with US AI companies such as OpenAI.

“The way [it] works in Sweden [is] much worse than in the US. It shouldn’t be too difficult to change,” he says.

Access to talent is another key concern. Sweden is a small country, and while Stockholm has plenty of engineering, product and marketing talent after decades of creating world-leading scale-ups, other roles are harder to find.

“If you want to scale sales, you can find 50 leaders in San Francisco. In Sweden, you’ll find one at best,” says Hellermark.

One solution is for Swedish tech to do what it has always done when it needs more people: import them. But immigration is a touchy subject in Sweden — as it is in many European states. A new immigration law will raise the salary threshold for incoming migrants to at least 90 per cent of the median monthly Swedish salary from June.

That may not be a problem for incoming software engineers, but access to housing and issues with spousal visas continue to frustrate new immigrants. The amount of time needed to qualify for citizenship will also increase from five years to eight. 

Meanwhile, there is the threat of Sweden’s best talent going the other way. Maddock’s Strawberry raised $6mn in a funding round led by General Catalyst and EQT Ventures last October, and even at this early stage, he spends a good deal of time in Silicon Valley.

“I can see that starting in Europe — in your home country — will give you an edge when it comes to talent and getting publicity,” he says.

“But if you really want to build the biggest company in the world, I do think you have to be in the US. You need to have a stronghold in the US — if not your headquarters there.”