Creandum’s Carl Fritjofsson on the Differences Between the Startup Ecosystem in Europe and the U.S.

Decerry Donato

Decerry Donato is a reporter at dot.LA. Prior to that, she was an editorial fellow at the company. Decerry received her bachelor's degree in literary journalism from the University of California, Irvine. She continues to write stories to inform the community about issues or events that take place in the L.A. area. On the weekends, she can be found hiking in the Angeles National forest or sifting through racks at your local thrift store.

Carl Fritjofsson
Carl Fritjofsson

On this episode of the LA Venture podcast, Creandum General Partner Carl Fritjofsson talks about his venture journey, why Generative-AI represents an opportunity to rethink products from the ground up, and why Q4 2023 and Q1 2024 could be "pretty bloody" for startups.


Creandum is a European VC firm that invests in early stage startups — typically at the “late Seed to Series A” stage. The firm’s investments are focused across six major buckets: fintech, health, climate, SaaS, infrastructure and consumer internet.

Some of Creandum’s most prominent investments include Spotify, Klarna, and Trade Republic.

“We started to build our own confidence that what we were doing was actually pretty good,” Fritjoffson said. “I think we've come now to a position where we've seen enough high quality companies throughout the years, we know what good looks like and we've also seen the best of the best firms have invested in some of our companies and we've sat along boards with them, so we come to learn from them as well.”

Working in the VC industry for the last decade, Fritjofsson has developed a unique approach to identifying opportunities for startups. His approach starts with recognizing that there are only so many types of large software categories that exist in the world (CRM, ERP, and Cloud Computing, to name a few)

“Each one of them are, to some extent, reinvented every X number of years. The reason why they are being reinvented is because the underlying core infrastructure has innovated” and the “winners of the last cohort…do not innovate as fast as the market expects” he said.

Fritjofsson thus spends a majority of his time waiting for significant inflection points- those moments when new technology comes along that fundamentally changes an individual’s experience interacting with a software product or service.

Take Generative AI for example. Fritjofsson believes that recent innovations represent a “horizontal wave” that impacts each of the six investment buckets mentioned above. He further believes that AI changes how we “engage and interface with software”, which necessitates fundamentally rethinking the way companies service a market

As Fritjofsson puts it, “I actually think that more or less every software category can be rewritten with a Generative AI-first approach. Now the question is, of course…how much better does that experience become?...I'm not necessarily convinced that it'll…disrupt every software category in the world, but I can at least build excitement around the potential.” Where there’s an inflection point, there’s opportunity.

Despite the present opportunity with AI, Fritjofsson described a bleaker outlook for the cohort of startups that raised their last round of financing in 2021.

Fritjofsson believes that “Q4, Q1 is gonna be pretty bloody.” He reasons that many startups cut costs in Q1’23 and Q2’23 to avoid coming to market when investor sentiment was negative. While these startups may have prolonged their runway, they likely did so at the expense of growth, which new investors will not like. As Fritjofsson puts it, Q4 ‘23 and Q1’24 will “be the moment of truth…where there's gonna be a lot of bodies in the wake because a lot of firms have slowed down.”

Given his experience as a founder and now a VC, Fritjofsson advises younger folks to veer away from entering the world of venture too early.

“I think there's a really dangerous path when you get stuck in venture too early in your career,” he said. “Because it's very hard to climb the ranks in a venture firm. Most venture firms are small and it's not a super clear path on how you become a partner.”

While he’s content in his own role, he cautions others who view a junior role at a VC firm as a stepping stone to an operating role inside an organization. The skill set, while valuable, is not necessarily transferable.

Finally, Fritjofsson shared the similarity he sees between the startup ecosystems in Europe and Los Angeles.

Homegrown success stories like Spotify helped Europe, as a startup ecosystem, “build confidence and trust their own intuition.”

In Fritjofsson’s view, LA is similar in that respect. It is significantly smaller than Silicon Valley, which simultaneously creates “a little bit of…insecurity” but also a willingness to “prove ourselves.”

While Creandum and the team are constantly evolving, Fritjofsson has experienced various instances where the team won competitive deals by “thinking outside the box.”

One example he points to was a time when Creandum was looking to win over Better Stack, a company in the observability space and said the firm was up against big names in the U.S. and Europe.

One of their products is a monitoring solution. Fritjofsson said Creandum created a sub page on the firm’s website, which looked like they were using the company’s product.

“We were building our conviction for the company,” he said. “Obviously the founder loved this. No one else did this. This was unique to him and he will remember it for the rest of his life, and we ended up winning the deal. I'm not sure if we won it because of that, but it definitely played to our advantage.”

dot.LA Reporter Decerry Donato contributed to this post.

Click the link above to hear the full episode, and subscribe to LA Venture on Apple Podcasts, Stitcher, Spotify or wherever you get your podcasts.

This podcast is produced by L.A. Venture. The views and opinions expressed in the show are those of the speakers and do not necessarily reflect those of dot.LA or its newsroom.

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