With fewer than 400,000 inhabitants, Iceland receives greater than its justifiable share of vacationers — and of enterprise capital. Each are good causes to concentrate to what’s happening and popping out of this distinctive island nation.
“We want extra pillars to our economic system,” Áslaug Arna Sigurbjörnsdóttir, Iceland’s Minister of Increased Training, Science and Innovation, lately informed TechCrunch at Iceland Innovation Week in Reykjavík.
Some diversification is already underway, and the nation’s export revenues from IP-driven industries have been rising steadily. However greater than being its personal pillar, Icelandic innovation ties into what’s already there: Startups are constructing tech to assist the nation profit from its sources and financial actions — fisheries and heavy business high that record, however they’re additionally advertising the native expertise and tradition.
Nonetheless, it’s onerous to deduce traits from meager information on the handful of startup offers which are achieved in Iceland every year. Right here’s what you want to know concerning the varieties of startups which have taken root and are flourishing within the island nation:
It’s telling that medtech firm Kerecis, which makes use of fish pores and skin for novel wound dressings is from Iceland: Innovation right here typically seems to be to surprising locations for inspiration.
Merchandise from the ocean have branched into high-end cosmetics, as did foodtech, 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 so some ways, rising help for the round economic system has introduced focus again on sustainability. That’s what one startup accelerator run by KLAK – Icelandic Startups is focusing on.
One huge supply of inspiration for firms within the nation is the previous. Particularly in relation to fintech — the sector has little to do with the nation’s pure sources and extra with its historical past. “I feel that the pressure behind firms similar to [neobank] indó is classes discovered from the [2008] banking disaster. And identical with Monerium,” stated Gunnlaugur Jónsson, CEO of Reykjavik Fintech Cluster, an affiliation that goals to nurture the nation’s fintech firms.
There are extra classes to attract, in line with Bjarni Gaukur Sigurdsson. His new firm, Blikk, is engaged on an account-to-account funds platform, as a substitute for bank cards, to assist cut back fee processing prices. It’s acquired a safety angle, too, because it helps its prospects cease being overly reliant on platforms that may very well be compromised.
However all that innovation can be wasted with out help. Fortunately, entrepreneurs right here have a great ecosystem to contribute and study from as they construct.
Apart from enterprise capital and accelerators, the nation’s startups can get funding by means of packages like Horizon Europe, a pleasant addition to the nationwide grants additionally distributed by Rannís, the Icelandic Centre for Analysis.
DTE, for example, is a beneficiary of a grant from the European Innovation Council to carry extra environment friendly processes to the nation’s enormous aluminum business.
However funding isn’t the one factor a startup must develop. Expertise makes firms, which is why so many startups flock to downtown Reykjavík, the middle of Iceland’s cultural, financial and governance exercise. The realm is house to co-working areas and entrepreneurial hubs like Hafnar.haus, which gives a co-working house in addition to rentable studios for these with a artistic bent.
Iceland is thought for its expertise within the artistic fields, and this propensity has bled into its tech scene as properly. Firms like Genki, Overtune and Treble have constructed tech for music manufacturing, composition and even acoustics simulation. Gaming is huge, too, and Iceland is house to common gaming firm, CCP Video games, the studio behind the favored MMORPG EVE On-line.
CCP Video games’ presence has been an inspiration for a lot of Icelanders to begin constructing video games, Porcelain Fortress CEO Ingolfur Aevarsson informed TechCrunch.
“Having an enormous brother like CCP within the neighborhood actually opened up the eyes of individuals [to the fact] that we may truly make video games,” Aevarsson stated. “However Iceland has a really robust roots in writing our sagas and all of those sorts of story constructing.”
Porcelain Fortress is predicated out of Innovation Home, a co-working house arrange by Opera and Vivaldi founder Jon Stephenson von Tetzchner. It is usually house to Heima, a platform that helps households handle and share family chores, PayAnalytics, a pay fairness and workforce analytics supplier, and plenty of extra startups.
As soon as startups get larger and higher funded, although, some transfer on to Gróska (a phrase “development” in Icelandic), a contemporary house in the course of Reykjavík Science Metropolis. This new district can also be house to the College of Iceland Science Park.
Nonetheless, there are limitations inherent to a rustic with a small inhabitants: As soon as they attain a sure dimension, Icelandic startups typically need to look overseas to search out AI expertise or executives with expertise in scaling.
Startups from Iceland which have forayed overseas embody Nasdaq-listed eye care firm Oculis; Prescriby, an opioid habit prevention firm that lately raised €2 million to develop in Canada and enter the U.S.; Sidekick Well being, whose digital care platform has gained traction throughout Europe and the U.S.; and Avo, which turned the primary Icelandic startup to affix Y Combinator in 2019.
Some firms go world instantly, whereas others desire to chop their enamel domestically first. Crowberry Capital’s founding companion, Jenny Ruth Hrafnsdottir, has a phrase of warning for the latter: As a result of Iceland is a rustic the place most individuals are only a telephone name or an introduction away, it may well make startups overconfident a couple of go-to-market technique that gained’t fly in bigger markets.
Nonetheless, the convenience with which some issues can get achieved in Iceland makes it a great testing floor for overseas firms, particularly once they may also leverage its pure property. It additionally helps that validation in Iceland can typically apply to Europe: Iceland will not be a part of the EU, however it belongs to the European Financial Space (EEA), with intensive legislative overlap.
Iceland has lengthy held a strategic geographical spot price securing, however the theme is experiencing tailwinds anew in relation to startups — bug bounty program Defend Iceland final 12 months obtained a $2.6 million grant from the European Fee as a part of the Digital Europe plan.
And the truth that NATO Innovation Fund (NIF) additionally co-hosted an occasion throughout Iceland Innovation Week underscores how a lot consideration Iceland is receiving.
Iceland not often makes the record of high international locations by world funding, however that’s largely as a result of the startup scene right here is barely simply taking off. In a panel on the occasion, NIF companion Chris O’Connor famous that Iceland’s enterprise capital ecosystem is kind of new, with most corporations solely deploying their first or second funds.
He has a degree: Excluding state-owned New Enterprise Enterprise Fund, funds like Crowberry, Brunnur Ventures, Eyrir Enterprise Administration and Frumtak Ventures had been born this century, if not this decade (Iðunn).
It’s too early to say which firms or funds will profit from NIF’s €1 billion fund, however Iceland is on the record of potential recipients as one among its 24 LPs. One tech firm, wind turbine producer Icewind, is already half of the primary cohort of NATO-backed accelerator DIANA. The development shall be price monitoring.
Strategically, but in addition economically and culturally, once-isolated Iceland is now extra of a crossroads.
As a Nordic nation, it has lots of widespread floor with Scandinavia (each have a powerful gaming business), and with the Baltics (fintech and tech for governments). It is usually pure for its tech firms to have a look at bigger markets early on. That’s probably a great factor for its startups and rising enterprise capital scene. For the remainder of us, it means we are able to get used to listening to about Iceland and its expertise.
Disclosure: Anna Heim traveled to Iceland on an invite from Enterprise Iceland on behalf of Reykjavík Science Metropolis.
