A small population, tight investment laws and high living costs pose potential obstacles for would-be founders in Reykjavik. But tough conditions can spark opportunity. The fallout of Iceland's banking collapse led to unemployment in the country hitting nine per cent, but it also kindled an entrepreneurial spark. "Everybody was employed in well-paying jobs... until the collapse happened," says Bala Kamallakharan, founder of venture-capital advisory firm Mira Capital and the Startup Iceland conference. "That opened up a whole new world."
Investment in Icelandic startups reached a record £150 million in 2015, according to a report by Northstack. In 2016, lower sums were invested, but the overall number of investments increased.
Due to the success of EVE Online developer CCP Games, gaming and virtual reality are key sectors, alongside energy, finance, tourism and biotech. However, with only a handful of local VC funds, seed funding predominately comes from government grants, according to Salóme Guðmundsdóttir, CEO of the Icelandic Startups accelerator. "It can be very difficult for startups to get their initial funding," she says. But Iceland has many cultural draws, and its newest VC fund highlights the Nordic nation's famously progressive society. Crowberry Capital is led by three women - a breath of fresh Icelandic air in the face of Silicon Valley's bro culture. "There was no plan to be a female firm," explains Crowberry Capital's investment manager Hekla Arnardóttir. "Iceland has a lot of interesting female-led startups. We have good equality in Iceland; we never think it's a problem to be female."
Meniga: Meniga helps banks use customer data to build better services. Founded 2013 Investment raised £18m Founders Asgeir Orn Asgeirsson, Viggo Asgeirsson, Georg Ludviksson
Viska: Viska is an AI-powered mobile app for employee training Founded 2017 Investment raised Undisclosed Founders Stefanía Ólafsdóttir, Arni Hermann Reynisson, Vala Halldorsdottir
Sólfar studios: Sólfar studios is a virtual-reality games studio. Founded 2014 Investment raised £1.6m Founders Kjartan Pierre Emilsson, Reynir Hardarson, Thor Gunnarsson
Activity Stream: Activity Stream is an AI platform designed to improve business operations for its clients Founded 2013 Investment raised £4m Founders Einar Sævarsson and Stefán Baxter
Platome Biotechnology: Platome Biotechnology grows human cells for labs Founded 2016 Investment raised £900,000 in grants Founders Sandra Mjöll Jónsdóttir-Buch, Ólafur Eysteinn Sigurjónsson Investment raised £1.6m Founders Kjartan Pierre Emilsson, Reynir Hardarson, Thor Gunnarsson
Accelerators: Startup ReykjavikStartup Energy ReykjavikStartup Tourism
Co-working spaces: Reykjavik Coworking UnitMinor Coworking
This article was originally published by WIRED UK
