a16z Partner’s 9 Flights to Stockholm Signal US VC Hunt for European Unicorns

Andreessen Horowitz (a16z) is expanding its search for promising startups beyond Silicon Valley, with a particular focus on Europe. The venture capital firm’s increased activity signals a growing trend of U.S. Investors looking for innovation hubs outside of the United States, even without establishing a physical presence in those regions.

The firm’s recent investment in Dentio, a Swedish startup leveraging artificial intelligence to streamline administrative tasks for dental practices, exemplifies this strategy. While the $2.3 million pre-seed round is relatively small considering a16z’s recently announced $15 billion in new funds, it underscores a commitment to identifying and backing early-stage companies globally.

The interest in Sweden isn’t new for a16z. The firm previously saw significant returns from its investment in Skype, co-founded by Swedish entrepreneur Niklas Zennström. This success has prompted a deeper dive into the Swedish startup ecosystem, specifically focusing on incubators like SSE Labs – the startup incubator of the Stockholm School of Economics – which has also produced companies like Klarna, Legora, and Voi.

Gabriel Vasquez, a partner at a16z, recently revealed the extent of this effort, taking nine flights between New York City and Stockholm in a single year. This wasn’t solely to monitor portfolio company Lovable, but to proactively scout for the next generation of Swedish unicorns. “We spend a lot of time developing a deep understanding of specific markets and knowing where innovation is emerging. In Sweden, that has meant closely tracking ecosystems like SSE Labs — the startup incubator of the Stockholm School of Economics — and the companies coming out of it,” Vasquez told TechCrunch.

Dentio was founded by Elias Afrasiabi, Anton Li, and Lukas Sjögren, former high school classmates who reconnected as students at the Stockholm School of Economics and KTH Royal Institute of Technology. Their initial product addresses a common pain point identified through a personal connection – Li’s mother, a dentist, highlighted the administrative burden that detracts from patient care. Dentio’s solution utilizes large language models (LLMs) to automatically generate clinical notes, aiming to free up dentists’ time.

However, Afrasiabi acknowledges the potential for commoditization in the AI scribe market. The company’s long-term strategy hinges on demonstrating sustained value to dentists beyond basic transcription, and expanding internationally. “Now we’re a team of seven people, and we think that it’s possible to build a unified way of handling administration all over Europe, and maybe even all over the world,” Afrasiabi said.

Dentio’s branding emphasizes its Swedish origins, highlighting data processing within Sweden and Finland to appeal to privacy-conscious European customers and signal reliability to investors. This “Made in Sweden” approach leverages the country’s reputation for producing successful companies.

The company’s success in attracting a16z investment despite a low-key approach – Afrasiabi stated they didn’t actively seek out investors – speaks to the firm’s proactive scouting network. A16z has cultivated relationships with founders abroad, like Fredrik Hjelm of Voi and Johannes Schildt of Kry, turning them into scouts to identify promising local talent. This strategy allows a16z to identify opportunities before they gain widespread attention.

Vasquez sees a broader pattern of innovation emerging outside of Silicon Valley, citing examples like Black Forest Labs in Germany and Manus, a Singapore-based AI startup recently acquired by Meta. His personal focus extends to Latin America, particularly Brazil, where he believes AI has the potential to be a significant equalizer. “I believe AI is the great equalizer,” he wrote on LinkedIn. “Most people now have access to PhD-level intelligence on a phone, and Silicon Valley is a state of mind.”

Dentio faces competition from other AI-powered healthcare startups, such as fellow Swedish company Tandem Health, which raised a $50 million Series A round last year. While Tandem Health targets a broader range of medical specialties, Dentio’s focused approach on dentistry aims to establish a strong foothold in a specific market before expanding.