The Nordic Innovation House is a collaboration between all the Nordic countries, funded by an alliance of Norwegian, Swedish, Finnish, Icelandic and Danish governments as well as Nordic Innovation, to promote cross-border trade and innovation. To give you a better understanding about each country's bridge organization and what they do in Silicon Valley, we will present a series of articles.
This is the second blog post in our serie, where Berglind Hallgrímsdóttir, the Managing Director of Innovation Center Iceland, will give you an overview of the Icelandic Entrepreneurial Landscape.
Icelandic start-ups home and away
Entrepreneurship and start-up activity has gone through dramatic changes in Iceland over the last few years. The economic crisis of 2008 plunged the country into a maelstrom of economic hardship, crashes and reorganisation but also an unleashing of new energy and creativity. As a result of this there has been very vibrant start-up activity in sectors such as ICT and tech, tourism as well as in creative industries.
There have certainly been success stories and there are many more on the horizon. The seas have nevertheless been rough and uncertain and in Iceland, even more so than in other Nordic and European countries. Access to finance and the capability and capacity for growth and scaling is a major obstacle for Icelandic start-ups. The classic gap from early stage to growth has not been bridged by private investors or banks. Two significant VC funds owned mainly by public funds, banks and pension funds have played a significant role in investing in start-ups, but in the opinion of many entrepreneurs, these funds have not been able to enter into investments early enough.
In the last few months there have however been some interesting developments with the emergence of three new investment funds. “Frumtak-2” is an initiative owned largely by a group of pension funds with a bank and an investment fund. The emergence of Frumtak 2 will no doubt be important for Icelandic companies looking to expand and grow while it is perhaps less likely that this new fund will invest significantly in early stage ventures.
The second new fund “Eyrir-Sprotar” is owned by Eyrir investment fund with a more overt objective of early stage investment. This fund has already invested in a number of young start-up companies which is certainly interesting for other similar companies seeking finance.
The third new fund is SA Framtak which has recently been launched is also clear in its stated objective of investing in innovation and start-up companies.
The emergence of these new funds is a positive indication of investors in Iceland seeing real opportunities in emerging start-up companies. The hope is that these new funds will ignite a virtuous cycle of growth in the Icelandic start-up community that could have a significant impact in terms of growth and competitiveness in this small island economy.
About Innovation Center Iceland
Innovation Center Iceland is a leading R&D and business support institute in Iceland. Our mission is to increase innovation, productivity and competitiveness of Icelandic business by doing innovative technology research, diffusing knowledge and giving support to entrepreneurs and start-up companies.
The core activities of Innovation Center Iceland are divided into two domains:
Technology Research and Consulting
Diverse fields in research, such as nanotechnology, renewable energy and concrete rheology. Projects include applied research and testing, basic research in key areas, consultation and technology transfer.
Innovation and Entrepreneur Service
IMPRA at Innovation Center Iceland assists entrepreneurs in the start-up, growth and management of SMEs. IMPRA operates an Incubator Center which offers support and facilities to start-up companies working on innovative business ideas. IMPRA offers extensive internet information services, workshops and courses for SMEs and the general public and publishes books and manuals on management, marketing, and more. IMPRA also runs a Enterprise Europe Network office (EEN) to encourage cooperation between Icelandic and European companies.
BERGLIND HALLGRÍMSDÓTTIR, director of the Centre for Entrepreneurs and SMEs at Innovation Centre Iceland.
Berglind did her MSc (Econ.) degree in European Social Policy and Administration from London School of Economics and Political Science in 1995. Berglind has worked within a number of fields of innovation and business support at the municipal and national levels in Iceland.