With fewer than 400,000 residents, Iceland welcomes greater than its fair proportion of vacationers — and enterprise capital. Each are good causes to concentrate to what’s taking place and what’s taking place on this distinctive island nation.
“We’d like extra pillars for our economic system,” Aslaug Arna Sigurbjörnsdottir, Iceland’s minister of upper training, science and innovation, just lately instructed TechCrunch on the Iceland Innovation Week in Reykjavík.
Some diversification is already underway, and the nation’s export earnings from IP-driven industries are rising steadily. However Icelandic innovation is not simply self-supporting, it is related to what’s already there: startups create know-how to assist the nation benefit from its sources and financial exercise – fishing and heavy trade prime the record – however in addition they promote native expertise and tradition.
Nevertheless, it’s troublesome to deduce tendencies from the scant information on the handful of startup offers that happen in Iceland annually. This is what you might want to know concerning the forms of startups which might be taking root and thriving within the island nation:
Tellingly, medical know-how firm Kerecis, which makes use of fish pores and skin for brand new wound dressings, hails from Iceland: right here, innovation typically appears for inspiration in surprising locations.
Merchandise from the ocean have developed into high-end cosmetics, as have meals applied sciences, new supplies, and extra. Whereas it wasn’t apparent even to Icelanders that fish pores and skin or algae may very well be repurposed in many alternative methods, elevated help for the round economic system has introduced the main focus again to sustainable improvement. That is what one startup accelerator, managed by KLAK – Icelandic Startups, goals to do.
One of many nice sources of inspiration for corporations within the nation is the previous. Particularly in terms of fintech — this sector has little to do with a rustic’s pure sources and extra to do with its historical past. “I believe the facility behind corporations like [neobank] indó are classes realized from [2008] banking disaster. And it is the identical with Monerium,” mentioned Gunlaugur Jonsson, CEO of the Reykjavik Fintech Cluster, an affiliation devoted to the event of the nation’s fintech corporations.
In response to Bjarni Gaukur Sigurdsson, there are nonetheless classes to be realized. His new firm, Blikk, is engaged on an account-to-account fee platform as a substitute for bank cards to assist cut back fee processing prices. It additionally has a safety angle because it helps clients cease being overly depending on platforms that may be hacked.
However all these improvements can be wasted with out help. Luckily, entrepreneurs right here have a very good ecosystem to contribute and study within the strategy of creation.
Apart from enterprise capital and accelerators, startups within the nation can get funding by means of applications like Horizon Europe, a very good complement to nationwide grants additionally distributed by Rannís, the Icelandic Analysis Middle.
DTE, for instance, is the beneficiary of a grant from the European Innovation Council to enhance course of effectivity within the nation’s big aluminum trade.
However funding is not the one factor a startup must develop. Expertise creates corporations, which is why so many startups flock to the middle of Reykjavík, Iceland’s cultural, financial and managerial hub. The realm is house to co-working areas and entrepreneurial hubs, comparable to Hafnar.haus, which provides co-working house, in addition to rental studios for these with a artistic bent.
Iceland is thought for its expertise within the artistic fields, and this propensity has additionally spilled over into its tech scene. Corporations like Genki, Overtune, and Treble have created know-how for music manufacturing, composition, and even acoustic modeling. Gaming can be huge, and Iceland is house to widespread gaming firm CCP Video games, the studio behind the favored MMORPG EVE On-line.
CCP Video games’ presence has impressed many Icelanders to begin making video games, Porcelain Fortress CEO Ingolfur Aevsson instructed TechCrunch.
“Having a giant brother like CCP round has actually opened folks’s eyes [to the fact] that we are able to truly make video games,” Aeverson mentioned. “However Iceland has very robust roots within the writing of our sagas and all these sorts of story-building.”
Porcelain Fortress relies on Innovation Home, a co-working house based by Opera and Vivaldi founder John Stevenson von Techner. It is also house to Heima, a platform that helps households handle and share family chores, PayAnalytics, a supplier of pay and workforce fairness evaluation, and plenty of different startups.
However as startups get larger and higher funded, some transfer to Gróska (Icelandic for “progress”), a contemporary house within the middle of Reykjavík’s Science Metropolis. The College of Iceland Science Park can be situated on this new space.
Nevertheless, there are limitations inherent to a rustic with a small inhabitants: when Icelandic startups attain a sure dimension, they typically must look overseas for AI expertise or executives with scaling expertise.
Icelandic startups which have made forays overseas embrace Nasdaq-listed eye care firm Oculis; Prescriby, an opioid dependancy prevention firm that just lately raised €2 million to increase into Canada and enter the US; Sidekick Well being, whose digital care platform has gained recognition in Europe and the US; and Avo, which turned the primary Icelandic startup to affix Y Combinator in 2019.
Some corporations go international instantly, whereas others want to chop their enamel regionally first. Crowberry Capital’s founding accomplice, Jenni Ruth Hrafnsdóttir, cautions in opposition to the latter: since Iceland is a rustic the place most individuals are solely a cellphone name or an introduction away, it could make startups overconfident of their go-to-market technique. will not fly in huge markets.
Nevertheless, the benefit with which some issues will be carried out in Iceland makes it a very good testing floor for overseas corporations, particularly if they’ll additionally use its pure property. It additionally helps that validation in Iceland can typically be utilized to Europe: Iceland will not be a part of the EU, however belongs to the European Financial Space (EEA) with in depth overlapping legal guidelines.
Iceland has lengthy held a strategic geographic location value preserving, however the subject is as soon as once more beneath menace in terms of startups, with bug bounty program Defend Iceland final 12 months receiving a $2.6 million grant from the European Fee as a part of of the Digital Europe plan.
And the truth that the NATO Innovation Fund (NIF) was additionally one of many organizers of the occasion throughout Iceland Innovation Week highlights how a lot consideration Iceland is getting.
Iceland not often makes the record of prime international locations for international funding, however that is principally as a result of the startup scene right here is simply beginning to take off. In a panel dialogue on the occasion, NIF accomplice Chris O’Connor famous that Iceland’s enterprise capital ecosystem is pretty new, with most corporations simply elevating their first or second funds.
He’s proper: aside from the state enterprise fund New Enterprise, funds comparable to Crowberry, Brunnur Ventures, Eyrir Enterprise Administration and Frumtak Ventures have been born on this century, if not this decade (Iðunn).
It’s too early to say which corporations or foundations will profit from the €1 billion NIF fund, however Iceland is on the record of potential recipients as one in all 24 plates. One know-how firm, wind turbine producer Icewind, is already within the first cohort of the NATO-backed DIANA accelerator. The pattern is value monitoring.
Strategically, but additionally economically and culturally, the as soon as remoted Iceland is now extra like a crossroads.
As a Nordic nation, it has loads in frequent with Scandinavia (each have robust gaming industries) and the Baltics (fintech and know-how for presidency). It is also pure for tech corporations to hunt out bigger markets from the beginning. That is most likely good for his startups and the rising enterprise capital scene. For the remainder of us, this implies we are able to get used to listening to about Iceland and its abilities.
Disclosure: Anna Heim traveled to Iceland by invitation Enterprise Iceland on behalf of Reykjavík Science Campus.