Have money, will travel: a16z’s hunt for the next European unicorn

Gabriel Vasquez, a companion at Andreessen Horowitz, lately revealed he took 9 flights from NYC to Stockholm in a single 12 months. Whereas his visits included stops at firms 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 information emerged that a16z had led a $2.3 million pre-seed spherical into Dentio, a Swedish startup that makes use of AI to assist dentists’ practices with admin work. Whereas it is a small test for a agency that simply introduced new funds totaling $15 billion, it confirms that U.S. VCs are actively searching for deal circulate outdoors of the U.S., even with out native places of work.

Stockholm is a pure cease for a16z, which beforehand achieved important 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 variety 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 Labs — the startup incubator of the Stockholm Faculty of Economics — and the businesses popping out of it,” Vasquez advised Trendster.

Like fintech large Klarna, authorized AI startup Legora, and e-scooter firm Voi, Dentio is an alum of SSE Labs — a startup incubator that has produced a number of profitable Swedish firms. 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 extra backing from KTH’s Innovation Launch program. They tackled an issue near dwelling: Li’s mother, a dentist, had advised 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. Nevertheless it’s solely a matter of time earlier than AI scribes turn 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 stated.

Potential opponents embody fellow Swedish startup Tandem Well being, which raised a $50 million Collection A spherical final 12 months to help clinicians with AI throughout a number of medical specialties. Dentio, against this, focuses solely on dentists, nevertheless it believes it may possibly nonetheless attain the dimensions VCs count on via worldwide enlargement

“Now we’re a workforce of seven folks, and we predict that it’s attainable to construct a unified means of dealing with administration throughout Europe, and perhaps even all around the world,” Afrasiabi stated. Whereas Europe’s healthcare methods are fragmented, they share similarities, and Dentio’s assumption is that what works in Sweden might 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 legislation.” It alerts knowledge safety to privacy-conscious European clients. Nevertheless it additionally alerts potential to VCs — a callback to Sweden’s historical past of manufacturing breakout firms.

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

This wasn’t happenstance: a16z has eyes world wide to be able to spot these firms as early as native funds would possibly, Vasquez stated. “In Sweden for instance, we partnered with high founders overseas like Fredrik Hjelm, founding father of Voi, and Johannes Schildt, founding father of Kry, by turning them into scouts and mapping the perfect native expertise.”

For Vasquez, who focuses on AI software investments for a16z, this isn’t nearly Sweden, however about “a sample of nice world firms being born overseas and scaling shortly,” 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 imagine AI is the good equalizer,” he added. “Most individuals now have entry to PhD-level intelligence on a cellphone, and finally, Silicon Valley is a way of thinking.”

Correction: This story initially acknowledged that a16z is an investor in Lovable owing to an modifying error.