An introduction to the Icelandic startup scene

Iceland is one of the most scarcely populated Nordic countries with a population the size of a medium-sized Nordic city, but still the nation has an aspiring entrepreneurial mindset with community builders and driving forces making big things happen. Our CMO, Marie Jacobsen Lauvås, was there for the first time to explore the secrets behind the Icelandic startup scene.
Reykjavik Startup

The “smart” island connecting the world

I met with Kjartan Olafsson who was awarded angel investor of the year at Iceland’s regional finale of Nordic Startup Awards, and he believes one of the key strengths of Icelandic entrepreneurs is that they need to think worldwide from day one because the market is so small. “Iceland has only 325 000 inhabitants and because of Iceland’s size it has always been needed to make deals across the world, which means we are well connected.” 

Startup Capital and success

Iceland has four Venture Capital firms; NSA Ventures, Eyrir, Frumtak and Brunnur. The VC firms usually close the fund each year which means there is a deficit of capital compared to the number of startups created, hence many startups go to the US or Europe in search of capital. One of the country’s biggest startup successes so far are within media and gaming, such as CCP Games and Plain Vanilla. Now many startups are trying to become the next big hit, and Watch Box is one of them. 

How Watchbox did it

Watchbox is an internal communication tool for companies aimed at making ”work more fun”. David Örn Simonarson (CEO) told me how the company had developed and scaled from Iceland: 

We launched Watchbox in April 2015 and got 10 000 downloads the first 1-2 months. In December/January, we closed our second seed round and started to focus primarily on the corporate market and moved the team to San Francisco for 3 months. At that time we just wanted to see if it was a definite need in the bigger corporate market. We used a lot of time on introductions, events, panel discussions, conferences, advice and valuable feedback. 

We learned a lot and then came back to Iceland to build the product because we wanted to stay here. I think it is something in the Icelandic DNA that makes you want to stay and pay back to the community. But at the same time, we want to be a more global company. It is really hard to scale out of Iceland, hence you need to be born global to survive.”

Difference between Startup Iceland and Icelandic Startups

  • Startup Iceland is the annual innovation and entrepreneurship conference (for 4 years running) presenting speakers and ideas from the Icelandic startup ecosystem with high success!
  • Icelandic Startups (former: klak Innovit) is a task-force organization aimed to fuel the Icelandic startup scene with its equivalent in the US being the Nordic Innovation House

Things you should know about the Icelandic startup scene

Accelerator programs:

Clusters and co-workspaces:

Best per capita – at everything!

From my stay in Iceland, I have learned that the Icelandic startup scene, like almost everything in Iceland (such as football), overachieves in a per capita sense, hence there must be something in the Icelandic blood. My other takeaway is that when a startup is born in Iceland it is practically a born global company, which may foster a mindset to think big.

Photo: Bjørn Giesenbauer 

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