Nordic Tech: How Sweden Became The European Startup CentralWritten by Elena on April 27th, 2016
Learn how Sweden became home to four unicorn companies and the new buzzing Swedish startups to disrupt the scene this year.
While most eyes are kept on Berlin, London and Paris when it comes to big project launches and the surrounding startup buzz, it is Sweden and Stockholm now boasting the highest amount of software companies per capita in Europe, coming second after the Silicon Valley on a global scale.
Certainly, you have heard about Skype (and its grand acquisition by eBay for $2.6bn in 2005, two years after the launch); Spotify – our favorite music giant to disrupt the music industry for good; and Candy Crush – pet project by King, valued at $7.1bn during their IPO in 2014.
So, how did Sweden happen to become one of the world’s largest startup hubs, while the whole world seem to be looking in the other directions? Let’s take a closer look at the country’s backbone for innovation.
Raising Four Unicorns in The North
In 2014 four Nordic startups exited with a total valuation of $13 billion. While US and the Silicon Valley still boasts the highest total number of BUSD exists, Sweden has the highest ratio of BUSD to GDP. In simple language – the Swedes know how to create really valuable companies and there are a few good reasons for that.
Small Domestic Market Leading Towards a Global Perspective
Ikea, H&M, Volvo and Abba for the sake of comparison – all have gained immense popularity on a global scale. As Niklas Zennström, the creator of Skype, noted: “We think globally from the outset. All realized that the domestic market is not big enough.” This mindset results into the shrinking time of international expansion estimated at just 1.4 years on average.
Sweden boats one of the highest computer literacy in the world, along with high speed Internet and excellent command of English, which all sums up into generations of tech-savvy people, who grew on the Internet and know no borders when it comes to access to information and collaboration.
Capital Available For Investments
High taxes and low return on saving investments, along with an overall culture of high trust and low-risk have made the Swedish investment scene strive. Considering the fact that stock options have become a common practice for the local startups, not only founders, but regular employees gain massive rewards from exits. Many of those afterwards will start their own companies or re-invest their assets as angel investors.
In fact, those who invest privately in startups are eligible to receive attractive tax deductions. Additionally, the local government offers various safety nets to provide entrepreneurs with income protection and reduce the risks of launching a startup even further.
Striking Role Models To Take After
The success of Skype, Spotify and Candy Crush has pawed the road for newer companies in Sweden. Seeking funding, including international deals, has become easier in the past few years most founders admit.
The success stories are not only fueling money back into the ecosystem, but encourage top young talents to choose careers within a startup, rather than large corporations.
Considering the fact that Stockholm is a relatively small city, everyone seems to know someone, who’ve succeeded or failed with the startup. Find a mentors or a co-founder for the project has become easier as the startup country’s ecosystem is booming.
Get to know where the top events are held and which accelerator and incubator programs are there from these two guides by Start US Magazine:
The Culture of Jantelagen
Laid back in 1933, the Law of Jante still has a profound impact on the Swedish community. Collective success is always prioritized over individual, making Swedes excellent team players and collaborators.
As Marta Sjögren puts it: “We excel at the concept of problem-solving investments as opposed to purely money-making investments… we call them game changers and game winners. This is deeply rooted in the Swedish mentality.”
Add superb educational system, active governmental support and great transportation links connecting the biggest Swedish cities with the rest of the world and we have the recipe for a booming startup scene and a unicorn farm.
Top Swedish Startups To Watch This Year
So, who are the biggest disruptors and innovators on the Swedish scene these days? We’ve rounded up the most promising companies, which are about to make some huge waves this year.
The fintech industry is already freaking hot on a global scale. Swedish innovators are keeping the hand on the pulse as well:
Cryex is steadily becoming one of the major European players at FX marketplace. This venture-backed startup launched in early 2013 offers advanced analytics, clearing and risk management solutions for crypto-currency trading. They are among the first to build a trusted bridge between the traditional financial institutions and digital currency traders. With the rising demand and further recognition of various crypto currencies, we are sure to hear more about Cryex this year.
Qapital is a gamified money-saving app, targeted specifically at millennials (who are notoriously bad with savings). Using the IFTTT(If This Then That) functionality, this smart app allows you to create specific scenarios for transferring money to your saving account (instead of grabbing another Chai Latte at Starbucks). Sleek design, attractive UI & UX and one-click goal set up is what makes this product irresistibly attractive. If Qapital isn’t a household name yet, it’s sure to become one pretty soon!
Tink is another amazing personal finance solution made in Stockholm with love. Daniel Kjellén andFredrik Hedberg created their product to help you get a better understanding of how your financials flow and patch all the pesky money holes. The app segments and analyzes all your spendings and financial incomings; presents the results in a visual chart; allows you to set saving goals; sends out cute motivators to keep going and gently nags you when your balance is running critically low. Additionally, you can initiate payments and money transfers from any account in any bank.
FundedByMe connects wannabe entrepreneurs with potential investors or lenders. This equity crowdfunding platform is open both for peer-to-peer investments, angel investors and venture capitalists. Think of it as Kickstarter for tech products and services. So far, FundedByMe helped to raise over $1 billion for 255 projects worldwide.
- PE Accounting – robust accounting software for medium to large companies.
- Betalo is the Swedish answer to Apple Pay, Samsung Pay and the rising demand for mobile payments. The app allows you to add your credit card and make secure payments straight from your phone.
- Billogram – a simplified invoicing app with attractive interface and robust features, suitable both for freelancers and large corporations.
- Goobit brings blockchain technology to the European market on a noble mission to reshape the world of finance and contracts.
- Shareville – the leading Scandinavian social investing and trading marketplace for stocks and bonds.
- Aphelion – SaaS FX trading solution with great array of liquidity management tools and advanced security.
The way how we consume information has changed dramatically in the past two years. With 2.73 million of blog posts written and published daily, content marketing being on everyone’s agenda and publishers competing with social networks for user’s attention, the need for new media companies and content delivery networks is as high as ever. Here’s what Sweden got on the platter:
Strossle is AI software, which analyzes and promotes stories from around the web based on consumers’ interests and browsing habits. As a publisher you can attract more relevant traffic to your website and promote your branded content to a highly-relevant audience. The app is already used extensively by the largest Swedish news publishers and we predict it to expand to the European market later this year.
Qwaya is steadily becoming a household name for social media marketers worldwide. This smart Facebook ad manager allows you to create better campaigns; optimize ad spendings; track, split test and analyze the results and schedule multi-product campaigns to run at any time of the day. Take advantage of the existing templates and auto-split targeting and intelligent automation for higher impact campaigns with less time and money spent.
Innometrics can quickly become your go-to tool for managing big data if you are running an ecommerce company. The app allows creating detailed customer and prospect profiles and use the data to offer more personalized experience, set up retargeting campaigns and nurture better leads. If you are operating in a multichannel landscape with various targeted buyers, this software can drastically improve your marketing campaigns and boost revenues.
Healthcare and Healthtech
Sweden does know a thing or two about living a healthy life. Though the average lifespan in the country is now 83.7 years and advanced (free) healthcare is striving, there’s still room for innovation left. Here are the most intriguing health startups to check out:
MinDoctor connects you with a practitioner online – no calls, no queues, no waiting in line time. You can schedule a consultation with a specialist in one click, get the recipes you need, a referral and a general consultation.
MedUniverse software is here to change the way patients make treatment decisions. It allows HCPs to create interactive and compelling patient case studies; educate and spread awareness about the new treatment methods and help your clients to get a big clear picture at one glance. The app also features advanced analytics based on the patient data you input to use for sales and marketing. Everything is stored securely in the cloud and the data can be easily used during webinars, presentations, trainings, emailing or sales meetings.
Lifesum was among the first Swedish unicorn companies (with $6.7mof funding raised during the first round in 2014). This sleek, neat app pushes you to meet your health goals faster – lose weight, workout regularly or obtain any other healthy habit. It’s action-packed with various features including daily exercise and calorie tracker; attractive feedback system to comment on your progress and help you make healthier meal choices; lovely progress tracker to keep you motivated and a supporting community to share the wins with. If you are not among the apps global village of fans, do check it out!
QuickPosture is here to educate us of how our bodies work and help to avoid injuries and possible health issues, which result from the wrong posture. This startup gamified the learning experience by creating a movement analysis lab with your computer and gaming sensor. The app will analyze your movement, provide instant feedback and store the results to share with a healthcare professional. This is the first app to offer a simple and detailed 3d model of a human body with all the movements and interactions recorded.
SaaS and Software Startups
Considering that Sweden boasts one of the highest computer literacy rates in the world (thanks for the early 90s governmental initiative) and uber fast Internet speed, along with a great educational base for tech pros, it comes as no surprise that the country has so many interesting software startups popping in the past few years.
BehavioSec offers an innovative approach to cybersecurity security based on the behavioral biometrics approach. The app analyzes customer’s behavioral patterns and creates an invisible layer of protection based on this data. The good news is – your customers may not even notice how you add additional protection to their accounts. Equipped with passive learning the app allows you to create context-based and threat-appropriate measures, based on the ongoing feedback and scoring system for verified customers. Reduce fraud, prevent account takeovers and offer your users a more secure environment without the hassle of additional security measure implementations.
GooCreate studios created a great array of animation and 3D tools to power up your visuals. Create timeline animation, add cool animated effects, add behavioral sequences and create stunning physics simulations with less coding required. GooCreate tools will appeal both to pro coders, game designers and less tech-savvy artists, who would definitely enjoy the simplified drag & drop functionality and material editor.
Volumental developed an incredible hardware retailers should get in line for. Their two products – foot scanner and face scanner – will scan your client’s appearance in two seconds and send a detailed 3d scan straight to your tablet or any other connected device. Creating custom products based on the specific measures and your customer’s unique features becomes a breeze.
- Kivra digitizes your snail mail and stores securely it in your personal online account. You get notified once anything new arrives via your email and can login and read everything online. Store, manage and archive all the important paper documents online and reduce paper waste and the same time.
- Incentive is an action-packed collaboration tool, which can easily rival Slack. Store and exchange files, manage and schedule tasks, create private messaging chats or groups to keep your team productive and result-driven. The app works across multiple platforms and features an attractive interface and neat design.
Sweden’s education is already among the top one’s on a global scale. And let’s not forget that it’s free too. Yet, these two edtech startups decided to make it even better both for the educators and students. Here’s how:
DigiExam software offers a better way to organize and rate exams for universities. Cheat-proof, simple-to-use and time efficient both for teachers in charge of checking the tests and students taking them, Digi Exam does not require any investment in hardware or tech support. Modern, sleek and already in use by top Swedish universities. It is a matter of time till this product goes global.
Schoolido helps high-school students to collaborate and study more efficiently in an online group environment (teachers and parents are invited to participate as well!). The app features the most common school subjects packed with video lectures, additional study materials, tests and discussion groups. Study specific subjects or quickly search for concepts you didn’t quite master in the classroom. Though the app is currently available in Swedish only, we believe students worldwide would eagerly adopt the product.
Music and Audio Startups
It’s no doubt that Spotify has become a key role model for the Swedish startup scene. Yet, it’s not the only awesome music product you should know about. Here are a few more:
Soundtrap is a fun make-music-online tool, which allows you to set up a band and practice even if all the members are scattered around the globe. Plug in your instrument or use those available in the app and start creating. You can record tunes and songs using the computers microphone; edit and collaborate on your recording with friends; publish and promote your content on social media and within the community. Who said a band can’t be virtual?
ScoreCloud is the Google Translate for music as the app’s creators say. This software will instantly turn your song into sheet music. Edit, arrange it, print it and share it to the world. No hassle involved.
Limes Audio has created a unique audio processing software. TrueVoice is here to wash away all the disturbing echoes, suppress background noise and improve the overall quality of your audio (even if it was recorded not in the perfect condition). If you are working in the music or production industry, this app is a true gem!
Though Sweden boats a population slightly larger than London, the country has managed to produce a great array of tech companies and unicorn giants. Taking the thriving startup ecosystem into account and innovative companies popping up each other day, Sweden sets a high benchmark for other European countries to follow up.