Have cash, will journey: a16z’s hunt for the subsequent European unicorn

Gabriel Vasquez, a companion at Andreessen Horowitz, lately revealed he took nine flights from NYC to Stockholm in a single yr. Whereas his visits included stops at corporations like Lovable — the place he posted from its workplace — the journeys have been additionally about discovering future Swedish unicorns earlier than they cross the Atlantic.

This all got here to mild when news emerged that a16z had led a $2.3 million pre-seed round into Dentio, a Swedish startup that makes use of AI to assist dentists’ practices with admin work. Whereas this can be a small verify for a agency that simply introduced new funds totaling $15 billion, it confirms that U.S. VCs are actively in search of deal circulate outdoors of the U.S., even with out native workplaces.

Stockholm is a pure cease for a16z, which beforehand achieved important returns from backing Skype, cofounded by Swedish entrepreneur Niklas Zennström. Since then, a big variety of fast-growing startups have been created within the Swedish capital, and the VC heavyweight tracked down the place lots of them have been coming from. 

“We spend loads of time growing a deep understanding of particular markets and understanding the place innovation is rising. In Sweden, that has meant carefully monitoring ecosystems like [SSE Business Lab] — the startup incubator of the Stockholm Faculty of Economics — and the businesses popping out of it,” Vasquez instructed TechCrunch.

Like fintech large Klarna, authorized AI startup Legora, and e-scooter firm Voi, Dentio is an alum of SSE Enterprise Lab — a startup incubator that has produced a number of profitable Swedish corporations. The three former highschool classmates Elias Afrasiabi, Anton Li and Lukas Sjögren joined the incubator after reconnecting as college students at each the SSE (Stockholm Faculty of Economics) and KTH (Royal Institute of Expertise), then joined the incubator with further backing from KTH’s Innovation Launch program. They tackled an issue near residence: Li’s mother, a dentist, had instructed them how admin work detracted from medical care.

The trio intuited that they may leverage LLMs to assist individuals like her — an concept that additionally they validated along with her and her colleagues. This led them to Dentio’s preliminary product, a recording instrument that makes use of AI to generate medical notes. However it’s solely a matter of time earlier than AI scribes change into a commodity product, and Dentio must show its worth to dentists so that they aren’t tempted to modify suppliers when that occurs, Afrasiabi mentioned.

Potential opponents embrace fellow Swedish startup Tandem Well being, which raised a $50 million Series A spherical final yr to assist clinicians with AI throughout a number of medical specialties. Dentio, in contrast, focuses completely on dentists, however it believes it may well nonetheless attain the size VCs anticipate via worldwide enlargement

“Now we’re a workforce of seven individuals, and we predict that it’s potential to construct a unified method of dealing with administration throughout Europe, and possibly even everywhere in the world,” Afrasiabi mentioned. Whereas Europe’s healthcare techniques are fragmented, they share similarities, and Dentio’s assumption is that what works in Sweden may work elsewhere within the EU.

Dentio prominently options its “Made in Sweden” branding and emphasizes that “all related knowledge is processed in Sweden and Finland in compliance with Swedish and EU regulation.” It alerts knowledge safety to privacy-conscious European clients. However it additionally alerts potential to VCs — a callback to Sweden’s historical past of manufacturing breakout corporations.

“We went to zero meetups. I reached out to zero traders,” Afrasiabi mentioned. Whereas the workforce was heads down constructing, the phrase unfold out. “I feel it was principally via referrals and folks speaking to one another that the information bought all the best way over to the U.S.,” he mentioned.

This wasn’t happenstance: a16z has eyes around the globe with a purpose to spot these corporations as early as native funds would possibly, Vasquez mentioned. “In Sweden for instance, we partnered with prime founders overseas like Fredrik Hjelm, founding father of Voi, and Johannes Schildt, founding father of Kry, by turning them into scouts and mapping one of the best native expertise.”

For Vasquez, who focuses on AI utility investments for a16z, this isn’t nearly Sweden, however about “a sample of nice world corporations being born overseas and scaling rapidly,” from Black Forest Labs in Germany to Manus, the Singapore-based AI startup lately acquired by Meta.

Born and raised in El Salvador, he has additionally been spending time in São Paulo. “I’m actually enthusiastic about what’s brewing in Brazil and throughout Latin America in AI,” he wrote on LinkedIn on the time. “I consider AI is the good equalizer,” he added. “Most individuals now have entry to PhD-level intelligence on a cellphone, and in the end, Silicon Valley is a mind-set.”

Corrections: This story initially said that a16z is an investor in Lovable owing to an modifying error. The title of SSE’s incubator has additionally been corrected.