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 occurring and popping out of this distinctive island nation.
“We’d like extra pillars to our financial system,” Áslaug Arna Sigurbjörnsdóttir, Iceland’s Minister of Larger Training, Science and Innovation, not too long ago instructed 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 take advantage of its assets and financial actions — fisheries and heavy trade prime that checklist, however they’re additionally advertising and marketing the native expertise and tradition.
Nonetheless, it’s onerous to deduce tendencies from meager information on the handful of startup offers which can be achieved in Iceland annually. Right here’s what it’s good to know in regards to the forms 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 appears to be like to sudden 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 might be repurposed in so some ways, rising assist for the round financial system has introduced focus again on sustainability. That’s what one startup accelerator run by KLAK – Icelandic Startups is focusing on.
One massive supply of inspiration for firms within the nation is the previous. Particularly on the subject of fintech — the sector has little to do with the nation’s pure assets and extra with its historical past. “I feel that the power behind firms corresponding to [neobank] indó is classes discovered from the [2008] banking disaster. And identical with Monerium,” mentioned 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 keeping with Bjarni Gaukur Sigurdsson. His new firm, Blikk, is engaged on an account-to-account funds platform, as an alternative choice to bank cards, to assist cut back cost processing prices. It’s obtained a safety angle, too, because it helps its prospects cease being overly reliant on platforms that might be compromised.
However all that innovation can be wasted with out assist. Fortunately, entrepreneurs right here have a superb ecosystem to contribute and be taught from as they construct.
In addition to enterprise capital and accelerators, the nation’s startups can get funding by way 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 deliver extra environment friendly processes to the nation’s big aluminum trade.
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 world is dwelling to co-working areas and entrepreneurial hubs like Hafnar.haus, which supplies a co-working area 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 nicely. Firms like Genki, Overtune and Treble have constructed tech for music manufacturing, composition and even acoustics simulation. Gaming is massive, too, and Iceland is dwelling to standard 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 start out constructing video games, Porcelain Fortress CEO Ingolfur Aevarsson instructed TechCrunch.
“Having a giant brother like CCP within the neighborhood actually opened up the eyes of individuals [to the fact] that we might really make video games,” Aevarsson mentioned. “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 area arrange by Opera and Vivaldi founder Jon Stephenson von Tetzchner. It’s also dwelling 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 greater and higher funded, although, some transfer on to Gróska (a phrase “development” in Icelandic), a contemporary area in the midst of Reykjavík Science Metropolis. This new district can be dwelling 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 must 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 not too long ago raised €2 million to increase 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 hitch Y Combinator in 2019.
Some firms go world instantly, whereas others want to chop their enamel regionally first. Crowberry Capital’s founding associate, 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 possibly 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 superb testing floor for overseas firms, particularly after they may leverage its pure property. It additionally helps that validation in Iceland can typically apply to Europe: Iceland is just not 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 on the subject of startups — bug bounty program Defend Iceland final yr acquired 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 hardly ever makes the checklist of prime nations by world funding, however that’s principally as a result of the startup scene right here is simply simply taking off. In a panel on the occasion, NIF associate 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: Except for state-owned New Enterprise Enterprise Fund, funds like Crowberry, Brunnur Ventures, Eyrir Enterprise Administration and Frumtak Ventures have 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 checklist of potential recipients as certainly one of its 24 LPs. One tech firm, wind turbine producer Icewind, is already half of the primary cohort of NATO-backed accelerator DIANA. The development will likely 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 a number of frequent floor with Scandinavia (each have a powerful gaming trade), and with the Baltics (fintech and tech for governments). It’s also pure for its tech firms to have a look at bigger markets early on. That’s doubtless a superb factor for its startups and rising enterprise capital scene. For the remainder of us, it means we will 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.
