Get money, you’ll travel: a16z’s search for the next European rhino

Gabriel Vasquez, a partner at Andreessen Horowitz, recently revealed that he took nine flights from New York City to Stockholm in one year. This was not only to visit Lovable, an investment company, but also to research other future Swedish companies before crossing the Atlantic.

This all came to light when news broke that a16z had led a $2.3 million seed round for Dentio, a Swedish startup that uses artificial intelligence to help dentist practices with administrative work. While this is a small check for a company that just announced new funds totaling $15 billion, it underscores that US venture capital firms are actively seeking deal flow outside the US, even without local offices.

Stockholm is a natural stop for a16z, which previously generated significant revenues from supporting Skype, which was co-founded by Swedish entrepreneur Niklas Zennström. Since then, a slew of fast-growing startups have been founded in the Swedish capital, and the venture capital heavyweight has traced where many of them came from.

“We spend a lot of time developing a deep understanding of specific markets and seeing where innovation emerges. In Sweden, that has meant closely tracking ecosystems like SSE Labs — the startup incubator at the Stockholm School of Economics — and companies emerging from them,” Vasquez told TechCrunch.

Like fintech giant Klarna, AI legal startup Legora, and e-scooter company Voi, Dentio is a subsidiary of SSE Labs – the startup incubator that has produced several successful Swedish companies. The three former high school classmates Elias Afrasiabi, Anton Lee and Lukas Sjogren joined the incubator after reconnecting as students at both SSE (Stockholm School of Economics) and KTH (Royal Institute of Technology), and then joined the incubator with additional support from KTH’s Innovation Launch Programme. They addressed a problem close to home: Lee’s mother, a dentist, told them how administrative work detracts from clinical care.

The trio realized they could leverage LLMs to help people like her, an idea they also validated with her and her colleagues. This led them to Dentio’s initial product, a recording tool that uses artificial intelligence to create clinical notes. But it’s only a matter of time before AI writers become a commoditized product, and Dentio needs to prove its value to dentists so they’re not tempted to switch providers when that happens, Afrasiabi said.

Potential competitors include Swedish startup Tandem Health, which raised a $50 million funding round last year to support doctors using AI across multiple medical specialties. Dentio, by contrast, focuses exclusively on dentists, but believes it can still reach the scale that venture capital firms expect through international expansion.

“We are now a team of seven people, and we believe it is possible to build a unified way of dealing with administration across Europe, and perhaps even around the world,” Afrasiabi said. Although Europe’s healthcare systems are fragmented, they share similarities, and Dentiu posits that what works in Sweden might work elsewhere in the EU.

Dentio prominently features its “Made in Sweden” branding and emphasizes that “all relevant data is processed in Sweden and Finland in accordance with Swedish and EU law.” It refers to data protection for privacy-conscious European customers. But it also points to the potential of venture capital firms, a nod to Sweden’s history of producing blue-chip companies.

“We went to zero meetings,” Afrasiabi said. “I reached out to zero investors.” As the team headed to the building, word spread. “I think the news got to the United States mostly through referrals and people talking to each other,” he said.

Vasquez said this was no coincidence: a16z has eyes around the world to spot these companies as soon as possible, as local funds might do. “In Sweden for example, we partnered with top founders abroad like Fredrik Helm, founder of Voi, and Johannes Schildt, founder of Kry, by turning them into scouts and mapping the best local talent.”

For Vasquez, who is focusing on AI application investments for a16z, it’s not just about Sweden, but about “a pattern of major global companies that are born abroad and expanding rapidly,” from Black Forest Labs in Germany to Manus, the Singapore-based AI startup recently acquired by Meta.

He was born and raised in El Salvador, and has also spent time in São Paulo. “I’m really excited about what’s going on in Brazil and across Latin America in AI,” he wrote on LinkedIn at the time. “I think AI is the great equalizer,” he added. “Most people now have access to PhD-level information over the phone, and at the end of the day, Silicon Valley is a state of mind.”