The Scandinavian Startup Scene

I spent a day in Cophenhagen yesterday. Got up at before dawn (which is really early this time of year in Paris) and got home after sunset (which is really late this time of year in Paris).

But it was totally worth it. I spent a full day in the offices of Sunstone Ventures with my friend Christian meeting startups every hour back to back. Christian set up the day and all I had to do was sit in the meetings, listen, and ask questions. Then afterwards, I caught up with my friend Martin who has been working in and around the startup scene in his homeland of Sweden and Denmark and also the Netherlands.

The startup community in Scandinavia isn’t much different than the startup community in New York or Silicon Valley. Each and every company that I met was similar in some important way to a company that I have seen in the US. However, there are a few important differences that I noted.

I saw two companies that participate in the online advertising technology business. One primarily serves the online agency market and one primarily serves the online publisher market. Neither were doing anything completely new (at least I didn’t see it), but both had built significant market share in the Scandinavian market. They had real customers using their platforms to run real campaigns. Both were looking for capital to expand to the rest of europe and then on to the US.

We don’t see that kind of opportunity so much in the US. The companies in the online advertising business don’t have an easily accessible market that they can get started in. Neither of these companies will be able to build a large (greater than $20mm per year) business if they stay in Scandinavia but they will be able to build a real business, serving real customers, with solid products before having to face the tougher competition of the rest of the world. And I see that both as an advantage and a disadvantage. I think its an advantage to have a "home court" advantage when you are just getting started. But I also worry that it can make it even harder to break out of the region when its time to do that.

Another interesting thing that I saw in a lot of these companies, that reminds me very much of the NY startup market, was active use of remote development. There were at least two and I think maybe three companies I saw that are doing development in Tallin, Estonia. While not technically in Scandinavia, Estonia (and Latvia and Lithuania) are an important source of development talent for european tech companies including ones in Scandinavia. It’s a very short flight to these small countries and I think they are well situated, both geographically and talent wise, to become more important to the tech startup world in the coming years.

I enjoyed meeting all the companies and am nervous about calling out any of them without calling all of them. But there were several that are bloggable for various reasons.

Christian is an investor in Issuu. Issuu is "youtube for high end publications". Think magazines and catalogs and brochures that are designed of print but need an online presence. Here’s a catalog for an Italian furniture house that I found on Issue.

And here’s a NYC rocker photo book that I found on Issuu.

Print isn’t going to go away anytime soon for these kind of publications and so it makes sense that there should be an online resource to upload and share them. Issuu is that place.

The second company that bears mention is one near and dear to my heart because it is using web technologies to make the world a better place, specifically Africa. The company and service is called myc4 and its like Kiva+Grameen+Prosper focused exclusively on providing access to capital to African small businesses. I really like the way the service is constructed. Although you do lend directly to the small businesses, you do it through "lenders" which are local companies that set up operation on the platform. The lender takes a cut of the loan but deals with the hassles of diligencing the loan, servicing it and collecting it. I think this will bring the default rates, which are high in services like Prosper, down significantly. If you feel like loaning some money to a small business in Africa, go do it through myc4 and let me know what you think.

Finally, I met a company called ESNation that owns one of the top videogaming teams in europe called Meet Your Makers (MYM). They are competing this weekend in Paris in the Electronic Sports World Cup. I’ve never been to a video gaming tournament. I think Josh and I will check that out this weekend. Call it diligence.

Anyway, that’s a short summary of my day in Scandinavia yesterday. It was a blast. Thanks to Christian and Martin for their hospitality. I think I’ll be back.

#VC & Technology

Comments (Archived):

  1. terra210

    This was very fun to read and your image from the office where the meeting took place was stunning. Not sure about Issu; seems a little redundant. But then I felt that way about the Kindle at first, but then wanted one, especially with the content engine of Amazon behind it. What is your take on the Kindle, in terms of its, or similar devices, impact on the print industry? Just curious.

    1. fredwilson

      i have thought the kindle is silly, but i am beginning to rethink that given how many of my friends love it

  2. vincentvw

    About the advertising-businesses & growth. On the one hand, I would think that one exit-strategy is to be acquired by a global player who wants to gain a local foothold. Seems smart to me, especially if you’re a local market-leader. On the other hand, European companies (in theory) are better positioned to exploit the fragmented nature of this continent, something that doesn’t always work as well for their US counterparts. Historically, there are plenty of success-stories in that area too.

  3. Berislav Lopac

    Fred, since you are in Europe, why don’t you take a short trip to Croatia? We’ve also got a number of interesting startups, and the most beautiful sea in the world! 😉

    1. fredwilson

      I’d like to but it won’t happen this trip. I’ll be back for sure

  4. Louis Berlan

    I’d read about Issuu, it definitely looks interesting – especially if electronic paper makes it in a big way. There would be a market for an “iTunes Music Store” of “print” content, where books, newspapers, etc. were centralized, and where your daily paper could be downloaded like a podcast. I know it’s the idea behind the Kindle, but they’re not there yet…Have you met with anybody in Paris? What do you think of the startup scene here?

    1. fredwilson

      I went to open coffee paris today and it was greatI met at least a dozen entrepreneurs

    1. fredwilson

      No I have notI will check it out

  5. Jay Parkhill

    Yay microlending! I’ve been a (small) lender on for a while and it is amazingly cool to see the people to whom your $25 can make a real difference- though I also wish there was a way to get followup after the loan has been paid off.

  6. Ethan Bauley

    thanks for sharing fred, you’re the man! really interesting…somehow i’m most interested in estonia now…the internet would be worse off w/o u- e

    1. fredwilson

      And you and all of us (or most of us)!

      1. Ethan Bauley

        ha, good point!

    2. leigh

      The half of my family that is Estonian said that it’s the new Prague – not only the tech scene is thriving (which it is) but culturally, musically, it’s been exploding in the last number years. It’s still not overrun with tourists so probably worth the visit before everyone figures it out. Just don’t ever visit there in the winter (I couldn’t believe how dark it was – think about an hour of day when you could take a photo without a flash)

      1. Ethan Bauley

        i like the sound of that a lot…is there a city or two in particular?

        1. fredwilson

          Tallin is the main city in estonia (at least I think it is)

      2. A. T.

        “It’s still not overrun with tourists” – I don’t insist but it might be interesting fact that everyday vodka-tourists loaded on ferries in Helsinki (and not only Helsinki when it comes to that) cross 80+ km gulf just for sake of … ahem, tourism… may be your half-of-family left Tallinn way time ago 😉

        1. leigh

          Oh sorry i wasn’t considering the drunk Finns as tourists – i see them more as part of the culture. 🙂

  7. Arno Nel

    testing disqus

  8. Ada

    Hey Fred, Thanks for this post! I have been living in Copenhagen for almost 2 years now, getting involved with the Venture scene there and it is really great to have your take on it. Best, Ada

  9. tim vang

    Hi Fred,What a small world we live in!!Last night one of my friends, who I haven’t seen for quite some time, popped by for an espresso and a chat. He opens the conversation with the following:”I only read one blog! This blog is written by a NYC VC that happens to have the same stereo as me (SONOS) – and guess what he wrote about today… “MYC4”!!!!”I happen to be the Co-founder of MYC4, so I was of course happy to hear that our company made it to your blog…I look forward to see you on http://www.MYC4.comGREATingsTim

    1. fredwilson

      Well I am honored to be the only blog your friend reads is this oneI like myc4 and plan to invest some money on the service this coming weekFred

    2. jensbest

      Hi Tim, greetings from your “colleagues” in Berlin from You doing a great stuff.Best RegardsJens Best

  10. Morten Saxnaes

    Hi FredThanks for an interesting read. I work for the Innovationcenter Denmark in Silicon Valley. We are a government agency that assists Danish startups in entering the US market, so your thoughts on the Scandinavian startup scene, is very interesting to me. You write that there isn’t a big difference between the startup community in scandinavia and Silicon valley, so do you think the success rate for startups are the same?This might be a tough question to answer, but do you see a difference in the mentality of startupfounders in Scandinavia and the US, and between VCs in Scandinavia and the US?Are you saying that startups in Scandinavia should stay in Scandinavia an try to get foothold on the European market before going for the US market?www.innovationcenterdenmark…

  11. jensbest

    Another great Scandinavian Gathering you sholdn’t miss is the annualy SIME in Stockholm hosted by Ola Ahlvarsson.All the Best from Berlin

    1. fredwilson

      Jens. I was in berlin today