Scandinavian Countries Explore a Single Large Stock Exchange to Support Tech IPOs

Set Trending Topics as a preferred source on Google.

Sweden, Denmark, Norway and Finland could merge their national stock exchanges into a single regional marketplace. The idea is being examined by Nordic Compass, an industry alliance bringing together more than 25 companies, foundations and organisations, among them Wallenberg Investments, EQT, Nordea, SEB, Nasdaq Nordic, Ericsson, Nokia, Saab, Ørsted and the Novo Nordisk Foundation. As Euronews and Bloomberg recently reported, citing people familiar with the discussions, the work covers both the consolidation of the four national venues and a harmonisation of their rulebooks.

At TechBBQ in Copenhagen, one of the largest startup conferences in Scandinavia, the future of the exchanges was one of the dominant themes as well.

The alliance confirms that it is studying the question, while stressing that everything remains open. “Nordic Compass’ Capital Markets Track is working to improve opportunities to raise capital to support competitiveness across all stages, from start-up, venture, growth and scale-up to IPOs, as well as the ecosystem for Nordic listings,” Christian Clausen, chair of the Capital Markets Track and chairman for the Nordics at BlackRock, told Euronews. “The work is still at an exploratory stage, and no agreement has yet been reached on specific initiatives or conclusions.”

Nordic Compass was founded in the spring as a pan-Nordic alliance and works under the chairmanship of former Finnish prime minister Jyrki Katainen across four tracks covering capital markets, deep tech, defence and energy. Its first initiatives are due to be presented at a summit in Gothenburg in early November, where the capital markets proposal is expected as well.

Four Trillion Dollars, Spread Across Four Markets

The economic leverage is considerable. Nordic pension funds and sovereign investors manage close to four trillion dollars and take in more than 175 billion dollars a year. That capital currently sits in four separate markets rather than in one pool. Bundling it is exactly where the hoped-for depth would come from: more liquidity, tighter spreads, better conditions for listings.

Any merger, however, depends on three parties that do not answer to the alliance. Nasdaq operates most of the region’s national exchanges, Euronext owns the Oslo bourse, and Euroclear plays a central role in settling Nordic securities trades. Nasdaq did not comment to Euronews. Euronext signalled openness and pointed to its own presence through Oslo Børs, its central securities depositories in Norway and Denmark, Nord Pool and Admincontrol. The company said it was “in dialogue with Nordic Compass about potentially contributing to practical measures.” It also held up its own multi-country structure as a template, arguing that deeper liquidity, shared technology and harmonised rules benefit issuers and investors, while a federal model keeps local exchanges close to the markets they serve.

Tomorrow’s Listing Candidates

The timing is no accident. Sweden turns out unicorns in quick succession, and several of them are approaching the size at which a listing becomes a live question. Lovable, the breakout star in AI coding, was valued at 13.3 billion dollars in a recent funding round of 400 million dollars. Legal AI provider Legora reached 5.55 billion dollars in its Series D of 550 million dollars and is reportedly already in talks about a valuation in the double-digit billions.

Where such companies go when the moment arrives is something Klarna has already demonstrated. The Swedish fintech listed on the New York Stock Exchange and raised 1.37 billion dollars there. Other European groups have crossed the Atlantic too: Wise moved its primary listing from London to Nasdaq, and Flutter Entertainment switched to the NYSE and has since been reviewing a withdrawal from London. The arguments tend to be the same ones: higher valuations, a deeper pool of institutional capital, broader analyst coverage.

35 Exchanges, One Continent

Europe’s trading landscape grew up piece by piece and is fragmented accordingly. In its analysis “The problem with European stock markets”, the think tank New Financial counts 35 exchanges for listings, 41 trading venues and close to 40 different clearing houses and central securities depositories. The European equity market is less than half the size of its American counterpart, yet it has three times as many exchange groups and more than ten times as many listing venues. Eighteen of Europe’s 33 equity markets have a combined value of less than 100 billion euros, and the number of listed companies has fallen by 17 percent over the past decade.

For Oliver Holle, CEO of the Vienna-based venture capital firm Speedinvest, the conclusion is clear. “You could abolish the many exchanges in Europe, nobody really needs them, what is needed is one large exchange for European IPOs,” he said at TechBBQ in Copenhagen.

Politically, the EU has for some time been pushing the Savings and Investments Union, the successor to the Capital Markets Union. It aims at more unified supervision, harmonised insolvency and securities law, and at channelling more of European households’ savings into equity. A single large EU exchange is outside its scope, and the prospects for one are considered poor. Exchanges are private companies with their own shareholders, national supervisors and tax regimes differ, and for many member states the domestic trading venue is also a matter of prestige.

On stage at TechBBQ, Danish tax and growth minister Jakob Engel-Schmidt tempered expectations. The Moderates politician, in office since early summer and responsible in an expanded portfolio for the financial sector and for coordinating entrepreneurship policy, put it plainly: “A large European stock exchange is not realistic.” Seen from that angle, it makes sense that the Nordic countries are now pursuing an initiative of their own.