Dawn Capital
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Dawn Capital

Denmark’s hygge SaaS

In this series, we look at the B2B SaaS landscape in a particular geography, exploring what’s emerging in the region from its exciting startups, funding and support to lifestyle and dominant trends. We’ve already written about Sweden and Israel. Now, we look at the state of play in Denmark, an unexpected global startup hub.

The current state of play

Whilst it might not be the first country to come to mind when you think about global startup hubs, Denmark is very much punching above its weight in building world-leading companies. Templafy, Peakon, Humio, Trustpilot, Unity, Sitecore, Vivino, Tradeshift, Zendesk, the list goes on and while it may still be behind neighbour Sweden on cumulative per capita investment, but when it comes to $1bn+ tech companies emerging from the region, it only lags slightly: 11 to Sweden’s 15.

In fact, Denmark has the sixth highest number of tech unicorns emerging in Europe. And while neighbouring Sweden has seen great success with B2C titans, Denmark is leading the charge with B2B SaaS unicorns, mostly headquartered in the capital, Copenhagen. Emerging players include Platypus, Dreamdata, Forecast, Pento, Layerise, Uizard and CluedIn (our latest investment), with innovation spreading beyond Copenhagen, to cities including Aarhus and Odense.

State support and regulation

The World Bank last year — for the seventh year in a row — ranked Denmark the best country in Europe for doing business. A 2020 report by the Global Entrepreneurship Index also labelled the Danish ecosystem the fifth best in the world for entrepreneurs. These notable accolades are largely thanks to the emphasis the Danish government has placed on nurturing new businesses. With some of the lowest bureaucratic regulations in the world, it takes less than 24 hours to set up a company in Denmark.

Then there are state-backed funding opportunities: €134m towards digital transformation initiatives running until 2025, as part of a new ‘Digital Growth Strategy’.The Danish Growth Fund (Vækstfonden) is helping startups with risk capital early in their journey. The Ministry of Business and Growth, and the Ministry of Immigration, Integration and Housing also jointly founded Start-Up Denmark, aiming to drive more entrepreneurs to the country and foster further tech growth.

Copenhagen is now home to a growing number of accelerator hubs, incubators and investment funds, with organisations such as Business House Copenhagen providing a link between businesses and the council, offering guidance on topics like applying for licenses, as well as free educational courses. This active government-led support has created a country ripe for entrepreneurship.

Culture and lifestyle

The concept of hygge — the Danish term encompassing a feeling of coziness and wellbeing — is at the centre of the country, and strict governmental policies mean that the capital is one of the most sustainable and energy efficient cities in the world with plenty of open, green spaces (Copenhagen aims to become the world’s first CO2 neutral capital by 2025). All this lends itself to a highly-satisfied population. In fact, Copenhagen has scored first place in the World Happiness Report numerous times.

The Danish workforce is among the most productive in Europe, despite flexible and light working hours. The country has a highly-educated population, renowned universities, excellent healthcare and public amenities, great transport links to Europe, as well as very strong maternity/paternity leave policies.

In short, this forward-thinking system lends itself incredibly well to entrepreneurship: opportunities to build the titans of tomorrow that’ll continue to improve commerce and enterprise.

Trends and predictions for the future

Historically, there has been a need for more capital and talent to keep successful growth-stage startups in Denmark. Over the last five years, only 21% of Danish alumni founders of $5bn+ companies have gone on to build new companies in the same country (compared to 65% in Germany, for example).

But this is finally beginning to shift.With the founders of companies such as TooGoodToGo, Pleo and Labster representing a new generation of thriving software scaleups founded by early employees from the likes of Tradeshift. As a relatively small world, investors and talent alike can nurture strong relationships with founders and enjoy a high level of trust, making it easy to connect and share experiences.

Combine this with its remarkable standard of living, and Denmark has a brilliant opportunity to attract talent back into the ecosystem — even when they have been training and working abroad. In fact, employers posting tech jobs in Denmark (along with the UK and Ireland) are the least likely in Europe to find their position hard to fill, based on data from Indeed.

While Denmark has, to date, remained too small an ecosystem for those looking to build a $10bn company, the combination of government support, access to top-tier talent and a strong network of international investors makes it an appealing location from which to break Europe and supercharge growth further afield. Israeli startups have truly mastered this art of global expansion while staying local: currently representing a third of companies listed on Nasdaq, surpassed only by the US and China. Danish companies have the opportunity to cast from this mold themselves, transforming the country into a hub of disruptive technology.

How is Dawn investing in this region?

We have made some exciting investments in Danish founded companies and are always on the look-out for other promising startups in this B2B SaaS hub.

To date, we’ve invested in:

CluedIn is a master data management platform that enables enterprises to achieve quicker and more reliable access to the data scattered across their business. Its technology blends data from all sources, then gives users access to pre-trained workflows that clean and label data flexibly, allowing anyone to derive the insights they need at any given time.

You can read more about CluedIn and why we invested in the company here.

Templafy brings all content across a business together. Whether it’s custom templates, brand and sales assets, or best-practice documentation and case studies, it pulls the lot from any office application, completely streamlining how users create on-brand and compliant documents, presentations and emails.

We wrote about our 2018 investment in Templafy here.

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