Scaling a business requires capital, but not every growth company is in a position to raise equity or attract traditional bank loans. For many Swedish scale-ups, alternative financing options such as venture debt, revenue-based financing, and strategic partnerships are becoming increasingly important. These instruments can provide the flexibility to grow without immediately diluting ownership, while also giving access to capital that is aligned with fast-paced expansion goals.
This guide explores how venture debt and other alternative financing methods can support Swedish scale-ups on their journey from promising startups to internationally competitive companies.
1. Understanding Venture Debt
Venture debt is a form of financing designed specifically for high-growth companies that have already raised venture capital but want to extend their runway without further equity dilution. It typically comes in the form of a loan with warrants attached, giving lenders a small equity upside.
- Provides additional capital between equity rounds to accelerate growth.
- Less dilutive than raising new equity, preserving founder and investor ownership.
- Often used to fund product development, sales expansion, or international launches.
For Swedish scale-ups, venture debt has become more accessible in recent years as international funds and Nordic banks expand their offerings to growth-stage companies.
2. Revenue-Based Financing
Revenue-based financing (RBF) ties repayments directly to a company’s revenue, making it more flexible than traditional loans. Instead of fixed monthly payments, companies pay back a percentage of their revenue until the financing is repaid with an agreed-upon return cap.
- Aligns with the company’s growth trajectory, easing cash flow pressure during slower months.
- Requires no equity dilution, keeping ownership intact.
- Particularly suitable for subscription-based or SaaS businesses with recurring revenue streams.
3. Government and EU-Backed Funding
Sweden offers a range of state-backed programs and grants for innovation-driven companies. Organizations such as Vinnova and Almi provide loans, guarantees, and advisory services for scale-ups. Additionally, EU programs like Horizon Europe offer grants and blended finance options for innovative projects.
- Non-dilutive capital can reduce reliance on equity financing.
- Access to international networks and research collaborations.
- Support for R&D-heavy businesses and technology-driven scale-ups.
4. Strategic Partnerships and Corporate Venture Arms
Large corporations in Sweden and across Europe are increasingly investing in or lending to scale-ups that complement their business models. These partnerships can combine capital with market access, distribution channels, and expertise.
- Potential to accelerate market entry through established distribution networks.
- Increased credibility through association with established brands.
- Opportunities for joint product development and co-marketing.
5. Asset-Based Lending and Convertible Notes
For scale-ups with tangible assets or strong balance sheets, asset-based lending can provide liquidity. Meanwhile, convertible notes remain a common short-term financing tool that bridges to a future equity round.
- Asset-based lending leverages receivables, inventory, or IP as collateral.
- Convertible notes defer valuation discussions while providing immediate funding.
- Both options are well-suited for companies preparing for larger equity raises.
6. Choosing the Right Mix of Financing
No single financing method suits every business. The right combination depends on the company’s stage, industry, and growth trajectory. For Swedish scale-ups, blending venture debt with non-dilutive financing and strategic partnerships can create a balanced capital structure that minimizes risk while maximizing growth potential.
From Funding Options to Growth Acceleration
For scale-ups in Sweden, access to alternative financing has never been broader. Venture debt, revenue-based financing, government-backed support, and strategic partnerships all offer different advantages depending on the company’s goals. By understanding these tools and carefully selecting the right mix, founders can fuel expansion while protecting long-term value.
Looking for guidance on structuring your financing strategy? CE Sweden can help scale-ups identify, evaluate, and secure the most suitable funding sources.
