Who will be Norway’s first unicorn?

From Enhjørningen Fiskerestaurant, Bergen

Wait, isn’t Kahoot! a unicorn? Or Autostore? How about Pexip and Meltwater?

No, strictly speaking they are not. According to Wikipedia, a unicorn is a privately held startup company valued at over $1 billion. The term was coined in 2013 by venture capitalist Aileen Lee, founder of Cowboy Ventures, and she only included startups founded in the 2000s, thus only companies that were younger than 13 years old at the time. So sticking to that definition — which I admit is strict — none of the above are unicorns. Kahoot! and Pexip are listed (and the current market cap of Pexip is below $1 billion). Autostore and Meltwater are too old. Autostore was established in 1995 and Meltwater in 2001, so both are more than 13 years old.

How about Medallia or Forgerock? Medallia was founded by Norwegian Børge Hald and his wife in 2001, in the US, thus it is not a Norwegian company in my book. The company was a unicorn before it went public on NYSE last summer, and is now valued at around $5 billion.

Forgerock is the closest contender to the title. Founded in Norway in 2010 by a predominantly Norwegian team, the company did a US flip quite early. Forgerock raised $94 million in a Series E in April, bringing the total raised to $230 million. ARR is north of $100 million, and the company has stated it is planning to go public — without setting a date. Valuation was not disclosed in the E-round, but it was $ 647 million after the D-round according to Pitchbook. My guess is that Forgerock is a unicorn already, or very close, but the company is not included in CB Insights unicorn list…

Then there is Spacemaker that was just acquired by Autodesk. Very well done(!), but the transaction means the company is out of the unicorn race.

So who will be the first Norwegian unicorn? Here are my top nine candidates in alphabetic order (and just to be transparent, Alliance Venture has invested in three of them, Kolonial.no, Boost.ai and Sanity):

• Boost.ai passed the $10 million ARR mark earlier this year and is growing fast. The company apparently has the most enterprise grade virtual agents live globally, and is landing more and more deals outside the Nordics.
• Cognite is unusual as it was started and funded by Aker with John Markus Lervik as founder. Unusual was also the recent announcement of Accel investing in Cognite. The valuation is certainly impressive at $550 million, but no amount was disclosed. Normally it is the other way around — the round size is announced, but not the valuation. It is anyway impressive to get Accel on board, and Cognite seems to have momentum with customers outside the Aker sphere, which represents much stronger validation than “in-house” clients.
• Kolonial.no was valued at $270 million after Kinnevik’s investment in 2018, and has three times the run rate now. The company has made dramatic improvements in profitability, is growing fast, and has a world-class team that has built it’s own tech platform and fulfillment system. Watch out, Ocado…
• Neat was established in 2018 by Simen Teigre, one of the founders of Pexip. He got his former colleagues at Tandberg — and competitors at Acano — OJ Winge and Fredrik Halvorsen back in the ring as video conferencing investors. In the wake of that, Zoom has also invested (twice?). Revenue was reportedly around $5 million in 2019, and then Covid-19 struck, most likely giving Neat a solid boost. It will be interesting to see how many times revenue has multiplied in 2020.
• PortalOne is still pre-revenue, in beta testing. This has not stopped the Kasin brothers from attracting Founders Fund, Seedcamp, Arielle Zuckerberg (Mark’s sister), Oslo-based Snö Ventures and other backers. The Future Group did not work out as planned, but it certainly looks like it has given the core team at Portal One key insights to build their new venture.
• reMarkable is about to launch the reMarkable 2, the second generation of its world-beating paper tablet. Rumors say that pre-orders have gone through the roof, so valuation has probably made a significant jump since Spark Capital invested in 2019 at a ~$100 million valuation.
• Sanity recently announced its A-round with Threshold Ventures as lead investor, supported by Silicon Valley super-angels such as Ev Williams. It is still early days for Sanity, but with strong traction and user love from both developers and enterprises, this is definitely a company going places.
• Tibber just announced a $65 million mega-round (at least for Norway) from top tier investors Eight Roads and Balderton. Tibber’s model of partnering with their customers to manage and save electricity consumption is potentially disruptive. And probably sticky when you have installed Tibber Pulse and made a habit of using the Tibber app.
• Whereby was developing nicely when Covid-19 gave it a massive boost. The whole video conferencing space has been put on fast-forward, as illustrated by the recent Hopin funding round — Europe’s youngest unicorn ever. And I love Whereby’s ease of use — to the extent that I normally choose it over Zoom. Rumor has it a European seed investor timed their investment perfectly just after the pandemic hit.

So that’s my nine candidates. But why haven’t you included x or y? They will probably get to a $1 billion valuation? Well, many contenders are too old to qualify, or I don’t consider them Norwegian. Or they are about to IPO. Here are some that come to mind:

• Nurx falls in the same category as Medallia, although both founders are Norwegian in Nurx’ case (not one of two). Started in 2015 by Hans Gangeskar and Edvard Engesæth, the company is certainly young enough. However, Nurx has not reached the $1 billion valuation mark yet, although it seems to be on track to get there.
• Novelda (established 2004, also an AV portfolio company), Signicat (established 2006), and Gelato (established September 2007…) are all too old using my strict definition and have not reached unicorn valuation levels yet, although they are strong contenders to get there.
• Huddly has announced that the company is planning a public listing in 2021 after being traded on NOTC for a while, thus it will soon not be privately held.

I think I’ll leave it at this. I know I have missed companies, and that — even though I have tried to be objective — my views are biased. Also, there are no companies within the life science space on the list. This is outside our scope as tech investors, so it is an area I have less knowledge about. With that said, there seems to be lots of interesting companies within the sector in Norway.

A final note: I think it is worth mentioning two reasons that in my view partly explain why we haven’t seen any unicorns in Norway yet: 1) companies list younger in Oslo compared to other countries/markets, and 2) Norwegian start-ups get acquired relatively early. I think it is evident Kahoot! would have been a unicorn if it had been privately held for longer, and maybe Spacemaker or Prox Dynamics would have gotten to the unicorn mark had they remained private? Is it a problem that start-ups go public or are sold early? Not necessarily, it could be an advantage, but that is another debate.

Please let me know which companies you think I should include in the next version of this list.

PS: Alliance Venture has a number of other portfolio companies that are strong contenders to make the list, check out the portfolio section of www.allianceventure.com