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

Gabriel Vasquez, a accomplice at Andreessen Horowitz, just lately revealed he took 9 flights from NYC to Stockholm in a single yr. That wasn’t simply to go to Lovable, a portfolio firm, but additionally to search for different future Swedish unicorns earlier than they cross the Atlantic.

This all got here to gentle 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 circulation 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 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 plenty of time growing a deep understanding of particular markets and figuring out the place innovation is rising. In Sweden, that has meant carefully monitoring ecosystems like SSE Labs — the startup incubator of the Stockholm College 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 Labs — 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 College 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 house: Li’s mother, a dentist, had instructed them how admin work detracted from medical care.

The trio intuited that they might leverage LLMs to assist folks like her — an concept that additionally they validated together with her and her colleagues. This led them to Dentio’s preliminary product, a recording device that makes use of AI to generate medical notes. Nevertheless it’s solely a matter of time earlier than AI scribes develop into 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 mentioned.

Potential opponents embrace fellow Swedish startup Tandem Well being, which raised a $50 million Collection A spherical final yr to assist clinicians with AI throughout a number of medical specialties. Dentio, in contrast, focuses completely on dentists, but it surely 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 approach of dealing with administration throughout Europe, and possibly even all around the world,” Afrasiabi mentioned. Whereas Europe’s healthcare techniques 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 regulation.” 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 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 way in which over to the U.S.,” he mentioned.

This wasn’t happenstance: a16z has eyes around the globe in an effort 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 just 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 telephone, and in the end, Silicon Valley is a way of thinking.”