Will the Stockholm Tech Scene Keep The Nordic Touch?
We spent two days in Stockholm earlier this week and have made some discoveries.
Although the impressive ratio of unicorns per habitants (5 unicorns for 10m of inhabitants) seems to reveal some statistical anomaly, the players of the tech scene are sometimes frustrated. Alongside Skype, Mojang, Spotify, King and Klarna, there are numerous great startups looking for funding and having pain to attract the fuel they need to develop their business. And that seems weird: recognized VCs, with good sized funds, are established there (including Creandum, Northzone, EQT, Inventure) and many pan-European funds are actively covering the region. Just look at the partners of the most iconic accelerator in the city, Sup46: you will find Atomico, Balderton, Index, Lakestar, 500startups and many more (including ourselves, the first French partner #champagne!). And I know that many others are also looking at the region, including Accel, Cherry, DN Capital, Mosaik, La Famiglia, to name a few.
Yet after meeting dozens of startups, a pattern emerged: many good startups are stuck between the seed stage, where very good local BAs are active like our friends at Nordic Makers, and the series A where most of the funds quoted above are positioned. A fund has even been launched to try to fill this “death zone” (Moor Capital).
In an afterwork event we co-organized with Nordic Makers, we mentioned the “nordic way” of operating startups. We didn’t really talk about it but now I start to wonder what this “nordic way” would be like. And the paradox is that in a country very influenced by the US (they watch American TV, listen to US music, read US authors, etc.), local tech entrepreneurs might have adopted a very not-Silicon Valley ethos. They want to build sustainable companies, with small teams and growth under control, trying to reach profitability as fast as possible. The protestant ethics might have killed the American hubris that we find in most of the tech scene, fueled by the myths of instant success. Having that in mind, it becomes unclear whether the equity stories, with typical small seed rounds and regular bridges, are the cause of the consequence of what appear to be the nordic way of building a tech startup.
What’s super interesting is to see the influence of foreigners who came to Sweden (mostly from the UK and the US — and to perpetuate another myth, all the foreigners we met have moved because they met a Swedish mate). They have a tremendous impact on the local scene, by shaking things up with the Anglo-Saxon way of doing business: taking big risks, daring to be provocative and… raising a big amount of money. It might lead to an hybrid way of doing business or by the survival of a single ethos.
We are super excited to look at how things unfold and at the same time, trying to give sufficient means to amazing founders in Sweden, mostly in the pre-series A gap.
If you are a Swedish startup and feel trapped at this stage, or just want to have a good French partner with a pan European footprint, don’t hesitate to contact us. Also, for the non-founders, very interesting in having your feedbacks about these observations and theories.
