Norway Startup Scene Has the Potential to Scale-up
Mind the Bridge presents at Oslo Innovation Week a new Report that shows how the Norwegian ICT ecosystem is ready to take off
- According to the research, Norway hosts 10% of all scaleups present in the Nordic region, accounting for the 9% of the total capital collected ($0.6B).
- With 0.85 scaleups every 100.000 people, the 0.18% of the GDP invested in scaleups, and just one “scaler” (company able to raise over $100M in funding), the country has still an early stage ecosystem, both in terms of number and capital raised.
- Over 40% of the total capital made available to Norwegian scaleups comes from stock markets. This is the highest percentage not only as far as the Nordic region is concerned but also in relation to Europe. Moreover, 3 scaleups from Denmark went public in Norway.
- 23 Norwegian startups got an exit via acquisitions in the last 5 years. 40% of which has been acquired by US companies.
Oslo, October 19th 2016 – Despite the Norwegian ICT scaleup ecosystem is still in its early stage, it has the potential to go huge. This is what emerged from the last SEP Monitor “Scaleup Norway” presented today by Mind the Bridge (MTB), the Silicon Valley/European organization dedicated to technology scouting for large corporations. MTB leads SEP-Startup Europe Partnership, the pan-European platform established by the European Commission that is dedicated to support the growth of European startups.
The survey tracked 44 scaleups in Norway – i.e. startups that cumulatively raised over $1M in VC funding or through IPO. This is roughly half of the number identified in Denmark and one third of the ones tracked in Finland and Sweden. In Norway we find 0.85 scaleups every 100.000 people. This number is lower than the average value of the Nordics (1.6), but still significantly higher than the values found in the rest of Europe.
The 44 Norwegian scaleups raised a significant amount of capital (collectively $0.6B) – about 9% of the total funding raised by scaleups in the Nordic countries. This accounts for the 0.18% of the Norwegian GDP.
$350M were provided to Norwegian scaleups by venture capital funds ($8M per scaleup on average), while $250M (41% of the total capital made available to Norwegian scaleups) came through the stock markets.
This last one is the highest percentage not only in the Nordic region but also in Europe (where the average value is 16%). To be noted that Norwegian stock market also attracts scaleups from other Nordic countries: 3 scaleups from Denmark (Napatech and Asetek, Oslo Stock Exchange and Hugo Games, Oslo Axess) went public in Norway.
1 scaler – i.e. scaleups able to secure over $100M in capital from either VC funds or IPO- has been identified in Norway: that is Thin Film Electronics ASA.
“Norway scaleup ecosystem is definitively ready to take-off”– commented Alberto Onetti, Chairman of Mind the Bridge and SEP Coordinator – Currently the Norwegian ecosystem is comparable in terms of number of scaleups to other young growing European ecosystems such as Portugal. But it also shares some similarities with the Finnish one: both are dominated by small-size scaleups, i.e. companies that raised less than 20 million in funding. That means that there is a large base of potential candidate scalers”.
In fact, in Norway, scaleups that raised less than $10M account for 87% of the total and raised 43% of the overall capital, while mid-size companies (scaleups that raised from $20 to 50M in funding) account for one tenth of the total, while raising the 26% of the total capital. Larger scaleups (>$50M in capital raised) represent a residual minority (4% of total). Yet, scaleups belonging to this last category raised collectively 31% of the total capital made available to Norwegian scaleups.
These figures show that a small group of companies drives the substantial growth of the Norwegian scaleup ecosystem, with other smaller companies potentially ready to cross the chasm and follow the way.
MARKETS – In terms of verticals, Norway is somehow atypical if compared to the other Nordic ecosystems, where Gaming and Mobile are the most attractive sectors. Software is the vertical that attracts more scaleups in Norway: 13 out of 44 (30%) are software companies. However, if we look at the capital raised, Hardware companies lead ($212M, more than 1/3 of the total).
HOTSPOTS AND DUAL COMPANIES – Most of the scaleup activity in Norway is concentrated in the country’s capital city. 33 out of the 44 Norwegian scaleups are headquartered in Oslo. SEP Monitor identified also 5 Norwegian scaleups following the so-called “dual model” -headquarters in other countries and relevant operations kept in the home country- Forgerock, WeVideo and CFEngine moved their headquarters to Silicon Valley, while Swarm64 relocated to Berlin and Your.MD to London.
EXITS – The SEP Monitor tracked 23 M&As in Norway since 2010, slightly less than the half of the number found in Denmark and Finland and one third of the exits reported in Sweden. The number of exits has been quite stable until 2014 and then doubled in the last year. Almost 40% of M&As were performed by US companies. This data is in line with the Nordic countries’ average and slightly lower than the European average (44%). 30% of the startups have been acquired by domestic companies, while other 9% have been acquired by companies belonging to the other four Northern countries. A remaining 13% of Norwegian startups has been bought by companies from European countries, while the remaining 9% of M&As were performed by players outside the US and/or Europe.