With less than 400,000 residents, Iceland has more than its fair share of tourists and venture capital. Both are good reasons to pay attention to what’s happening and coming out of this unique island nation.
“We need more pillars for our economy,” Aslaug Arna SigurbjornsdottirIceland’s Minister for Higher Education, Science, and Innovation recently told TechCrunch Iceland Innovation Week in Reykjavik.
Some diversification is already underway, and the country’s export revenue from IP-driven industries is steadily growing. But more than being its own pillar, Icelandic innovation is tied to what already exists: startups are building technology to help the country make the most of its resources and economic activities – fisheries and heavy industry top the list, but they’re also marketing local talent and culture.
However, it’s hard to gauge trends from the scant data about the handful of startup deals that happen in Iceland each year. Here’s what you need to know about the types of startups that have taken root and are flourishing in this island nation:
It is telling that the medtech company KeresisThe one that uses fish skin to create a new type of wound dressing is from Iceland: innovation here often looks to unexpected places for inspiration.
Sea-derived products have branched out into high-end cosmetics, as well as food technology, new materials and more. While it wasn’t obvious even to Icelanders that fish skin or algae could be reused in so many ways, growing support for the circular economy has put a renewed focus on sustainability. That’s the thing Startup Accelerators run by KLAK – Icelandic Startup is setting a target.
A big source of inspiration for companies in the country is the past. Especially when it comes to fintech – the sector has little to do with the country’s natural resources and more to do with its history. “I think the power behind companies like [neobank] Indo Lessons are learned from this [2008] Banking crisis. and just like that MoneriumGunnlaugur Jonsson, CEO of , said, Reykjavik Fintech ClusterAn association that aims to nurture the country’s fintech companies.
According to Bjarni Gaukur Sigurdsson, there is much more to learn from this. His new company, BlickAs an alternative to credit cards, it is working on an account-to-account payment platform to help reduce payment processing costs. There is also a security aspect to this, as it prevents its customers from relying too much on a platform that could be compromised.
But all these innovations will go to waste without support. Thankfully, entrepreneurs here have a great ecosystem to contribute and learn while building.
In addition to venture capital and accelerators, the country’s startups can get funding through the following programs: Horizon EuropeA good addition to the national grants is also distributed by RannisPublished by the Icelandic Centre for Research.
DTEFor example, this one Beneficiary of a grant from the European Innovation Council Bringing more efficient processes to the country’s huge aluminium industry.
But it’s not just funding that gets a startup going. Talent is what makes companies, which is why so many startups flock to the city of Reykjavík, Iceland’s center of cultural, economic, and administrative activity. The area is also home to co-working spaces and entrepreneurial hubs such as the Hafnar.hausWhich offers co-working spaces as well as studios for rent for people with creative inclinations.
Iceland is known for its talent in creative fields, and this trend is also reflected in its tech sector. Genki, Overtune And Treble has developed technology for music production, composition, and even acoustics simulation. Gaming is also big, and Iceland is home to the popular gaming company, CCP GamesThe studio behind the popular MMORPG EVE Online,
The presence of CCP Games has been the inspiration for many Icelanders to begin game production. Ceramic fortress CEO Ingolfur Everson told TechCrunch.
“Having a big brother like the CCP in the neighborhood really opened people’s eyes [to the fact] “We can actually make games,” Everson said. “But in Iceland we have very strong roots in writing sagas and creating all kinds of stories like that.”
Where is the Porcelain Fort located? Innovation Housea co-working space founded by Opera and Vivaldi founded by John Stephenson von TetznerThis is also a home HeimaA platform that helps families manage and share household chores, PayAnalyticsa pay equity and workforce analytics provider, and several other startups.
However, when startups get bigger and get better funding, some move on Grosca (a word in Icelandic meaning “growth”), a modern location in the middle of Reykjavik Science CityThis new district is also home to University of Iceland Science Park,
Still, there are some limitations inherent in a country with a small population: Once they reach a certain size, Icelandic startups often have to look abroad to find AI talent or executives with experience in scaling.
Icelandic startups that have ventured abroad include Listed on NASDAQ eye care company Oculis, PrescribeAn opioid addiction prevention company that recently €2 million expanding into Canada and entering the US; Sidekick Healthwhose digital care platform has gained popularity Momentum in Europe and the US; And Evowhich became the first Icelandic startup to get into Y Combinator In 2019,
Some companies go global right away, while others prefer to start locally first. Jenny Ruth Hrafnsdóttir, founding partner at Crowberry Capital, has a word of warning for the latter: because Iceland is a country where most people are just a phone call or introduction away, it can lead startups to be overconfident about a go-to-market strategy that won’t succeed in larger markets.
Still, some things can be done easily in Iceland, making it a good testing ground for foreign companies, especially when they can also take advantage of its natural assets. It also helps that accreditation in Iceland can often apply to Europe: Iceland is not part of the EU, but it does belong to the European Economic Area (EEA), which has extensive legislative overlap.
Iceland has long been a strategic geographic location, but the topic is experiencing renewed favorable conditions when it comes to startups – Bug Bounty Program Defend Iceland received last year $2.6 million grant Approval has been received from the European Commission as part of the Digital Europe plan.
And the fact that the NATO Innovation Fund (NIF) also co-hosted an event during Iceland Innovation Week shows just how much attention Iceland is getting.
Iceland rarely appears on lists of top countries for global investment, but that’s because the startup sector here is just getting started. In a panel at the event, NIF partner Chris O’Connor said Iceland’s venture capital ecosystem is fairly new, with most firms only raising their first or second fund.
He is right: except for state-owned companies. New Business Venture Fundfunds such as Crowberry, Brunnur Ventures, Aier Venture Management And Frumtak Ventures born in this century, if not this decade (Idunn,
It is too early to say which companies or funds will benefit from this. NIF’s €1 billion fundBut Iceland is among the list of potential recipients 24 LP. a technology company, wind turbine manufacturer Icewindalready Part of the first group of NATO-supported accelerators Diana.It would be advisable to keep an eye on this trend.
Once isolated, Iceland has now become a crossroads, not only strategically but also economically and culturally.
As a Nordic country, it has a lot in common with Scandinavia (both have a strong gaming industry) and the Baltics (fintech and tech for governments). It’s also natural for its tech companies to look to bigger markets early. This is probably a good thing for its startups and emerging venture capital scene. For the rest of us, it means we can get used to hearing about Iceland and its talent pool.
Disclosure: Anna Heim came on a trip to Iceland. Business Iceland on behalf of Reykjavik Science City,
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