the rising tech-ecosystem of the Nordics

2023-06-04 10:27:03

The Nordics have a stellar status as the house to a number of of tech’s largest outcomes of the previous 20 years. Many corporations, with which most of us have direct or oblique interactions on a near-daily foundation, hint their roots again to this area. Examples embody Spotify, Klarna, and Unity.

Whereas Sweden has historically taken the highlight, Denmark, Finland, Norway, and even Iceland (though it tends to obtain much less consideration) have additionally produced their fair proportion of success tales.

I’ve had the chance to go to Iceland a number of occasions, together with attending Iceland Innovation Week and the accompanying climate-tech convention, OK Bye, named after the late glacier, Okjökull.

Okjökull just lately misplaced its glacier standing because it not possesses the mandatory thickness to maneuver, which, as I discovered, is a defining attribute of glaciers (glaciers are outlined as slowly shifting plenty or rivers of ice fashioned by the buildup and compaction of snow on mountains or close to the poles).

Iceland is an incredible place. It’s stunning, clear, and the nation has a forward-thinking mindset. Geographically, it is conveniently positioned simply 5 hours away from NYC and three hours from London. Contemplating its place within the north Atlantic, Iceland might doubtlessly profit from the anticipated rise in electrical flight since transatlantic journeys will probably require a stopover, no less than initially. Sheep freely roam the hillsides, and pure geothermal baths are scattered throughout the island. Iceland can also be house to plenty of “love refugees,” vacationers who discovered love throughout their journeys to Iceland and by no means left.

The power and enthusiasm amongst founders and VCs in Iceland is vibrant, but it feels as if the remainder of the world stays unaware of the hidden gem that’s the Icelandic startup ecosystem.

When it comes to VC funding raised per capita, Iceland ranked second in Europe in 2022 (see beneath). It is value noting that among the many listed nations, Iceland has the smallest inhabitants, with roughly 370,000 inhabitants.

Some notes:

In 2021, Icelandic enterprise funds raised over $308 million, a big enhance from $40 million in 2017 and $115 million in 2015. Quite a few new corporations are rising, and the ecosystem is turning into more and more organized to assist the expansion of pre-seed and seed-stage startups.
Only some regionally based mostly conventional early-stage enterprise funds exist. Amongst these funds, a few of which have but to lift greater than two funds, between 59% and 98% of the LP capital comes from native pension funds. This LP composition could be fairly uncommon for younger corporations in the USA.

The federal government performs an lively position in supporting ecosystem progress via varied initiatives. One latest instance is the launch of Kría Ventures, a state-backed VC fund-of-fund that invests in native early-stage VC funds. They’ve dedicated to investing a number of tens of tens of millions of USD by 2025.
Power and local weather had been hot-topics on the conferences. Iceland stands as a worldwide chief in renewable power, with 100% of its electrical energy grid counting on renewable assets. Roughly 85% of Iceland’s complete main power provide comes from domestically produced renewable sources. Geothermal power accounts for about 65% of the first power, hydropower contributes round 20%, and fossil fuels (primarily used for transportation) make up roughly 15%. Though Iceland doesn’t import electrical energy, it does import fossil fuels for transportation and different functions. In 2016, round 15% of Iceland’s power consumption relied on imported power.
Final yr, Davíð Helgason, the founding father of Unity (a gaming engine startup that went public and is now valued at round $11B), and his workforce launched Transition Labs. The first objective of Transition Labs is to draw climate-focused startups and initiatives, offering them with streamlined processes for allowing, authorized issues, and extra, permitting them to deploy, take a look at, and scale their options in Iceland. They obtain this by creating the mandatory infrastructure and collaborating intently with native establishments and regulators.
For Icelandic corporations trying to broaden internationally, Denmark has historically been the apparent alternative resulting from its proximity, connectivity to Iceland, and the prevailing sturdy ties between the 2 nations. Nevertheless, with the rise of digital corporations, this pattern appears to be shifting as extra Icelandic corporations now set their sights on the US market. The rationale behind this shift lies in the truth that the incremental effort required to enter the primary worldwide market stays comparatively constant whatever the vacation spot. Additionally, the US market affords a considerably greater return on funding resulting from its dimension and the widespread use of English in a number of nations.