With a population of lower than 400,000, Iceland receives greater than its justifiable share of tourists – and enterprise capital. Both are good reasons to listen to what is happening and what is happening in this unique island nation.
“We need more pillars of our economy.” Áslaug Arna SigurbjörnsdóttirIceland’s Minister of Higher Education, Science and Innovation recently told TechCrunch at Innovation Week in Iceland in Reykjavik.
Some diversification is already underway, and the country’s export earnings from mental property-based industries proceed to grow. However, Icelandic innovation not only stands on its own pillar, but connects to what already exists: start-ups are creating technologies that can help the country make the most of its resources and economic activity – fishing and heavy industry are at the top of this list, but in addition they promote local products of talent and culture.
However, it is difficult to attract conclusions about trends based on the scant data on the few startup transactions concluded in Iceland each yr. Here’s what you might want to know about the types of startups that are taking root and thriving in this island nation:
That’s what this health technology company says Keresawhich uses fish skin for modern dressings, comes from Iceland: innovation often finds inspiration in unexpected places.
Products from the ocean have evolved into high-end cosmetics, as have food technologies, recent materials and more. While it wasn’t obvious even to Icelanders that fish skins or algae may very well be used in so many ways, growing support for a circular economy has brought renewed focus to sustainability. This is just one startup accelerator powered by KLAK – Icelandic startups is targeted.
One of the great sources of inspiration for firms in the country is the past. Especially when it involves fintech – the sector has little to do with a country’s natural resources and more to do with its history. “I think the power behind companies like [neobank] Indo are lessons learned from [2008] banking crisis. And the same with Money”said Gunnlaugur Jónsson, CEO Fintech cluster in Reykjavikan association whose aim is to support domestic fintech firms.
According to Bjarni Gaukur Sigurdsson, there are still many lessons to be learned. His recent company Take a look, is working on an account-to-account payments platform as an alternative to bank cards to assist reduce payment processing costs. It also has a security aspect in that it helps customers stop being overly reliant on platforms which may be compromised.
But without support, all this innovation could be wasted. Fortunately, entrepreneurs here have a good ecosystem from which they will contribute and learn while they create.
In addition to enterprise capital and accelerators, domestic startups can obtain financing through programs resembling Horizon Europea nice addition to the national grants also distributed by RannisIcelandic Research Center.
DTEfor example, there is beneficiary of a grant from the European Innovation Council introducing more efficient processes to the country’s huge aluminum industry.
However, funding is not the only thing a startup must grow. Talent creates firms, which is why so many startups flock to downtown Reykjavík, the center of Iceland’s cultural, economic and managerial activity. There are coworking spaces and entrepreneurship centers in the area, resembling Hafnar.hauswhich provides coworking space and studios for rent for creative people.
Iceland is known for its talent in creative fields, and this tendency has carried over to its tech scene. Companies like Genki, Tuning AND Triple we have created technology for music production, composition and even acoustic simulation. Gaming is big too, and Iceland is home to popular gaming company CCP Games, the studio behind the popular MMORPG EWA on the Internet.
The presence of CCP Games was an inspiration for many Icelanders to start out creating games, Porcelain Fortress CEO Ingolfur Aevarsson told TechCrunch.
“Having a big brother like CCP in the neighborhood has really opened people’s eyes [to the fact] that we could actually make games,” Aevarsson said. “But Iceland has very strong roots in writing our sagas and all kinds of story-building.”
Porcelain Fortress is based on House of Innovationa coworking space founded by the founder of Opera and Vivaldi Jon Stephenson of Tetzchner. It is also home to Housea platform that helps families manage and share household chores, Payment analyticsprovider of pay and workforce equity analytics, and many other startups.
But as startups get greater and higher funded, some will move on Growing up (the word “rise” in Icelandic), a modern space in the middle Reykjavík City of Science. This recent district also includes, among others: University of Iceland Science Park.
Still, there are limitations inherent in a country with a small population: Once they reach a certain size, Icelandic startups often have to look abroad to search out AI talent or executives with experience in scaling.
Startups from Iceland that have gone abroad include: Listed on the Nasdaq stock exchange eye care company Eye; Prescriberecently launched opioid addiction prevention company 2 million euros expand into Canada and enter the United States; Midfielder’s health, whose digital care platform has gained popularity in Europe and the US; AND Avoidwhich was the first Icelandic startup to hitch Y Combinator in 2019.
Some firms go global right away, others prefer to scale up locally first. Crowberry Capital founding partner Jenny Ruth Hrafnsdottir has one warning for the latter: Because Iceland is a country where most people are just a phone call or an introduction away, this may make startups overconfident about their go-to-market strategies , which can not fly in larger markets.
Still, the ease with which some things may be done in Iceland makes it a good testing ground for foreign firms, especially when they can even make the most of its natural resources. It also helps that validation in Iceland can often apply to Europe: Iceland is not part of the EU, but is part of the European Economic Area (EEA), where there is considerable overlap in laws.
Iceland has long had a strategic geographic location value securing, but it’s a topic of renewed difficulty when it involves startups – the bug bounty program Defend Iceland received last yr a grant of $2.6 million from the European Commission as part of the Digital Europe plan.
And the incontrovertible fact that the NATO Innovation Fund (NIF) also co-hosted an event during Iceland Innovation Week highlights how much attention is being paid to Iceland.
Iceland is rarely among the top countries for global investment, but that is mainly because the startup scene is still in its infancy. During a panel at the event, NIF partner Chris O’Connor noted that the Icelandic enterprise capital ecosystem is quite recent and most firms are only deploying their first or second funds.
He’s right: except for the state ones Fund for recent business venturesfunds resembling Crowberry, Well, ventures, Management of the Eyrir enterprise AND Frumtak’s ventures were born in this century, if not this decade (Busy).
It is too early to find out which firms or funds will profit from the €1 billion NIF fund, but Iceland is on the list of potential recipients as one of the 24 LPs. One technology company, a manufacturer of wind turbines Icy windIt’s already Hi the first cohort of the NATO-supported accelerator DIANA. The trend will probably be value following.
Strategically, but also economically and culturally, the once isolated Iceland is now more of a crossroads.
As a Nordic country, it has a lot in common with Scandinavia (each have a strong gaming industry) and the Baltic countries (fintech and technology for governments). It is also natural for technology firms to look to larger markets at an early stage. This is likely excellent news for startups and the emerging enterprise capital scene. For the rest of us, this implies we will get used to hearing about Iceland and its talent.