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

Gabriel Vasquez, a accomplice at Andreessen Horowitz, just lately revealed he took nine flights from NYC to Stockholm in a single 12 months. While his visits included stops at corporations like Lovable — the place he posted from its workplace — the journeys had 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. While it is a small examine 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 places of work.

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

“We spend a lot of time developing a deep understanding of specific markets and knowing where innovation is emerging. In Sweden, that has meant closely tracking ecosystems like [SSE Business Lab] — the startup incubator of the Stockholm School of Economics — and the companies coming out of it,” Vasquez informed TechCrunch.

Like fintech large Klarna, authorized AI startup Legora, and e-scooter firm Voi, Dentio is an alum of SSE Business 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 School of Economics) and KTH (Royal Institute of Technology), then joined the incubator with further backing from KTH’s Innovation Launch program. They tackled an issue near house: Li’s mother, a dentist, had informed them how admin work detracted from scientific care.

The trio intuited that they might leverage LLMs to assist folks 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 scientific notes. But it’s solely a matter of time earlier than AI scribes grow to be a commodity product, and Dentio must show its worth to dentists in order that they aren’t tempted to modify suppliers when that occurs, Afrasiabi stated.

Potential rivals embody fellow Swedish startup Tandem Health, which raised a $50 million Series A spherical final 12 months to help clinicians with AI throughout a number of medical specialties. Dentio, in contrast, focuses solely on dentists, but it surely believes it could actually nonetheless attain the dimensions VCs anticipate via worldwide growth

“Now we’re a team of seven people, and we think that it’s possible to build a unified way of handling administration all over Europe, and maybe even all over the world,” Afrasiabi stated. While 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 relevant data is processed in Sweden and Finland in compliance with Swedish and EU law.” It indicators knowledge safety to privacy-conscious European prospects. But it additionally indicators potential to VCs — a callback to Sweden’s historical past of manufacturing breakout corporations.

“We went to zero meetups. I reached out to zero investors,” Afrasiabi stated. While the crew was heads down constructing, the phrase unfold out. “I think it was mostly through referrals and people talking to each other that the news got all the way over to the U.S.,” he stated.

This wasn’t happenstance: a16z has eyes around the globe to be able to spot these corporations as early as native funds would possibly, Vasquez stated. “In Sweden for example, we partnered with top founders abroad like Fredrik Hjelm, founder of Voi, and Johannes Schildt, founder of Kry, by turning them into scouts and mapping the best local talent.”

For Vasquez, who focuses on AI utility investments for a16z, this isn’t nearly Sweden, however about “a pattern of great global companies being born abroad and scaling quickly,” from Black Forest Labs in Germany to Manus, the Singapore-based AI startup just lately acquired by Meta.

Born and raised in El Salvador, he has additionally been spending time in São Paulo. “I’m really excited about what’s brewing in Brazil and across Latin America in AI,” he wrote on LinkedIn on the time. “I believe AI is the great equalizer,” he added. “Most people now have access to PhD-level intelligence on a phone, and ultimately, Silicon Valley is a state of mind.”

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.