Ebba Fåhraeus, CEO of SmiLe Incubator in Lund, calls for efforts to save our valuable and strategically important Swedish startups during the COVID-19 pandemic.
Life science startups possess vital innovations that can reform the future of healthcare, states Fåhraeus in a press release, “and efforts are therefore needed to save these strategically important companies from going bankrupt during the COVID-19 crisis. If these companies go bankrupt patents are lost, and if that happens Sweden loses out on new pharmaceuticals and new diagnostics.”
The financial crisis due to the COVID-19 pandemic strikes hard against life science startups. They are innovative companies that already, before the crisis faced financial challenges.
Product development demands large investments and takes a long time in the life science industry, and during a crisis like this the willingness to take a financial risk decreases among investors.
“Thanks to venture capital these companies can be run, developed and generate ideas,” describes Fåhraeus. “For example, during the last five years SmiLe companies have contributed with 695 million SEK in income taxes to Sweden.”
So far measures from the Swedish government have not been directly applicable on our category of companies, many of them do not yet have employees, products or revenues, continues Fåhraeus. “But we have a positive dialogue and this will hopefully result in effective efforts.”
“There is a proposal of public measures which might make a difference for Swedish innovation companies which we, within the innovation system, brings forward within our channels,” she says.
In this proposal, SmiLe points out two issues as a solution for the lack of venture capital for life science companies.
The first one is to give Vinnova, the Swedish Innovation Agency, access to more public funding/means to support innovative companies with more and larger funding opportunities and also as verification measures to the incubators, which can dole out these to adequate companies so that they are able to advance their development.
The other issue is to increase Almi Invests funds for convertible loans and venture capital without requirement of co-investment, and also to increase Almi Företagspartner’s lendings for conditional loans to innovative companies.
Photo of Ebba Fåhraeus: Jenny Leyman