Author: Kris Hróbjartsson (Page 1 of 5)

Mink Campers raise $450,000 seed round

Mink Campers have just announced a $450,000 seed round from undisclosed investors.

The company specializes in providing quality travel experiences in nature through the use of their signature Mink Camper and the Mink Travel Guide App. Their aim is to connect adventurous travelers with interesting Icelandic locals, such as artisanal farmers and avid hiking experts. The Mink Camper boasts unlimited 4G wifi, a Bose sound system and a queen bed, among other things.

“We at Mink Campers are excited to be joined by this group of investors, who are not only interested in the growth opportunities, but also in creating a strong Icelandic brand in the camping and outdoor activities space,” says Kolbeinn Björnsson, CEO and co-founder of Mink Campers.

“The investment will be used to manufacture and market the campers that will be rented out this summer in participation with Avis car rental.” The investors will take board seats and be active participants in the development of the company. Helga Viðarsdóttir of Spakur and Finnbogi Jónsson facilitated the funding round.

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This is the first round of funding the company receives. The plan is to produce 50 campers for the summer, both as rentals and for sale. Production will be ramped up by the end of summer to prepare for 2018.

Mink Campers want to take the hassle out of camping, increase the comfort, and make tenable new kinds of travel for people interested in close connection with nature.

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“We recently signed a contract with Avis rental cars, and they will help us with customer service and renting cars to accompany the campers,” Kolbeinn says. “Avis has service centers all over Iceland, which will help us provide first class service to our customers.”

Introducing the Community Fund: $18k to support community tech events

Today, we’re excited to announce the formation of Community Fund, a 2 million ISK ($18.5k) fund that will support events and projects in the Icelandic tech community that foster knowledge sharing, networking and discussion about technology and product development.

The aim of the fund is to empower the grassroots of the tech community in Iceland by easing the access to funds and support. It’s created for smaller projects like meetups, workshops, knowledge sharing and conference preparation, that are likely to enrich the tech community.

The fund is backed by stakeholders in the tech community: SUT (Federation of Icelandic IT companies), Investa, Tempo, Frumtak Ventures, Kaptio, Northstack and Lagahvoll (who helped with all the legal stuff).

In his work, preparing and organising Javascript Iceland events, one of the co-founders of the fund, Kristján Ingi Mikaelsson, regularly ran into hurdles securing money for basic things like snacks, drinks and space. A discussion turned into an idea which ended up a project that Kristján and Northstack have been working on for the last couple of months.

The hypothesis is simple:

We have a lot of driven individuals that are interested in preparing meetups, speaking at meetups, and contributing to the tech community. One of the biggest hurdles to executing those ideas is money – people are already giving their time and don’t want to give their money, too. So by making money easily accessible, we can increase the amount of tech focused events.

Our founding partners – SUT, Investa, Tempo, Frumtak, and Kaptio – loved the idea, and we’re structuring the fund as a one year experiment.

In one year’s time we’ll evaluate whether the experiment went in the direction we thought. Did we see more events? Did Community Fund help? Should the initiative continue?

We hope it will, but that’ll be up to the community.

Lucidworks acquire Icelander-founded Twigkit

Twigkit, the search-user-interface company, founded by Hjörtur Stefán Ólafsson and Bjarki Hólm, has been acquired by Lucidworks. Stefán will join Lucidworks as chief strategy officer, and Bjarki as VP of solutions. The valuation of the deal is undisclosed.

From Twigkits‘ announcement:

Today we are taking a leap forward. We have joined forces with Lucidworks, a company that is reshaping the data and discovery industry and the tour-de-force behind Apache Solr, the world’s most popular open source search engine. Whilst we have been busy making it easier to build intuitive applications for end users, Lucidworks has been working from the other side of the fence – on redefining the foundations of search itself.

From Lucidworks’ CTO Grant Ingersoll post about the acquisition:

Thanks to Twigkit’s integration with Lucidworks Fusion and the ability to federate across multiple data sources, this acquisition enables us to further deliver on our vision of intelligent data access via interfaces that are built with the end user in mind.

This marks the first tech acquisition involving Icelander’s since Northstack was founded in 2015. It’s also one of few acquisitions where Icelander-led companies are acquired by Silicon Valley co’s (other’s would be Clara (acquired by Jive), as well as Emu messenger (acuired by Google) and Siri (acquired by Apple), and possibly some more).

Influencer marketing platform Takumi raises $4m Series A round

Takumi, the influencer marketing platform, just announced the successful raise of a $4m (£3.2m) Series A financing round. The investment will be used to fuel its US and global expansion. The investors are a mix of family offices and high-net worth individuals.

“Influencer marketing is still in its early stages but will grow into a major marketing channel over the next five years,” said Mats Stigzelius, co-founder and CEO. “By offering the best platform possible for influencers and brands, it has allowed us to scale quickly and this will also drive our future growth. However, with this new funding, our undoubted aim is to make Takumi the leading global influencer platform, both for brands and influencers.”

The company, which recently launched in Ireland and Germany, now takes aim at the US market, and has recently opened an office there. Apart from sales and business development offices in London, Berlin and New York, Takumi operates a product development office in Reykjavik, Iceland, where all development takes place. Two of the company’s three founders – Jökull Sólberg Auðunsson and Gummi Eggertsson – are Icelandic.

In addition to the newly raised $4m, the company previously raised two seed rounds, totalling $3.1m (£2.5m), one of which was announced last fall.

Brad Burnham, Jerry Colonna, Ida Tin and more among speakers at Startup Iceland

Startup Iceland, the annual startup conference, will be held for the sixth time on May 31. This year’s theme is Personal Data, Health, Wellness and Technology – focusing both on the health of the founder, and health in general.

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The nine companies that pitched at Startup Tourism

The final event of Startup Tourism was held in Tjarnarbíó on April 28th. Nine new companies in tourism pitched their business ideas to a room full of investors, key players in the tourism sector and other guests.

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First public Women Tech Iceland event on May 4th

Women Tech Iceland is hosting its first public meet up on May 4th. The event is hosted by Rannís, with TeqHire and Frumtak Ventures providing refreshments and co-organising the event.

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Tulipop announces animated webseries in collaboration with WildBrain

The characters of Icelandic lifestyle brand Tulipop – which raised a $2m round last summer – just announced a new animated webseries in collaboration with WildBrain.

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Who finances startups in Iceland? A look at LP’s

This post is from the Northstack Memo, our newsletter and commentary on recent happenings in the Icelandic startup ecosystem, written by @kiddiarni.

While some investors – most notably angel investors – invest their own money in startups, venture capital funds mostly get their money from other investors. VC funds are set up in partnerships, and it’s the LP’s – limited partners – that bring the money. So just like founders and CEO’s pitch VC’s for funding, VC’s pitch asset managers at LP’s for their money.

For most LP’s, investing in venture funds is a part of their diversification strategy, and seen as a low-risk way for outsized returns. Low risk, because the absolute amounts are small compared to their assets under management (AUM), outsized returns, because the best VC returns can be mindboggling (Seqouia Capital and their 10x return on a $400m fund is a good example).

Scott Kupor, managing partner at VC fund Andreessen-Horowitz wrote a post on VC economics, and I highly recommend it. For the purpose of this post, I’m highlighting one part, where he discusses the types of institutions that usually function as LP’s:

  • University endowmentsYale is a famous example

  • Foundations – Non profits that invest their funds to fund their charity

  • Pension funds – That receive money from workers and invest them

  • Family offices – Investment managers that work for very high net worth families

  • Sovereign Wealth Funds – Investing the economic reserves of a country, like the Norwegian Oil fund

  • Insurance Companies – Invest their customer’s premiums, to be able to pay out when something happens (and also to make money)

  • Fund-of-funds – Investment companies that have their own LP’s and allocate money on their behalf

Who invests in Icelandic VC?

In Iceland, we currently have four VC funds (and one on its way) – Brunnur Ventures, Frumtak 1, Frumtak 2, and Eyrir Sprotar. Looking at the LP’s in those has some interesting points:

  • Pension funds are by far the biggest player
    Both in terms of participants (we tracked 12 pension funds that are investors in Icelandic VC funds) and proportion of capital. Around 62% of the roughly 17bn ISK that have been invested (or promised) in Icelandic venture capital since 2008 come from pension funds. While in comparison to the VC market, this is a very big portion of the market, it’s important to keep in mind the vast amount of money available to these institutions. LÍVE (Iceland’s biggest pension fund) alone has 600bn ISK under management, and even if LÍVE was the sole backer of Icelandic VC, this allocation would be way below the 5% mark many pension funds in the US allocate to VC. (It should be noted that LÍVE could of course be an investor in foreign VC funds directly or through fund-of-funds).

  • Of the pension funds, LÍVE is the most active
    This is not surprising, because the fund is the biggest in Iceland. It participated in all four of the funds, and in three of them utilized most of its 20% allowance (Pension funds are only allowed to own 20% of a company structured like a VC fund – more here). In total, the fund has a little under 3bn invested in VC funds, around 0.5% of its AUM.

  • The next biggest LP players are banks
    Which is interesting, as banks aren’t mentioned as LP’s in Scott Kupor’s discussion of LP’s. In any case, all three banks have participated in at least one venture fund. Landsbankinn has participated in three, Arion banki in two and Íslandsbanki in one. In total the banks contribute around 3.2bn ISK, just under 19% of the total money.

  • There’s a lot of LP groups missing
    There are no insurance companies, university endowments, charitable foundations, or sovereign wealth funds listed as participants in the Icelandic VC’s. There’s a couple that could count as family offices – holding companies of high-networth individuals are (small) participants in some – so we’ll call them that.

What does it all mean?

These numbers and observations suggest several things.

  • Icelandic VC’s rely a lot on pension funds, and other types of funds haven’t participated in VC (yet). This could very well be due to the fact that we don’t have a long history of returns in the VC industry, like the US one has. We’re looking at four funds over 9 years, while the US industry has decades to build on.

  • There might be fundraising opportunities for Icelandic VC’s in insurance companies. They are active in other types of investments and might be open to investing in VC. (If you’re a VC and have tried to raise from an insurance company, please let me know – just hit reply).

  • The structure of available capital in general is very different from the US. We don’t have university endowments or big charitable organisations that need to invest their money, or a long history of wealthy families that need investment managers for their family wealth. At the same time, the banks in Iceland step in and participate in these activities. This could mean that we need to find different types of backers for our VC funds.

I’d be very interested in knowing how this matches up to the Nordics and rest of Europe. It could be that this difference is mostly size-related. Iceland is so small that we don’t have massive bequeathals to charitable donations or a lot of family offices. It could also be cultural – I don’t think may European universities run investment offices for their massive endowments.

What are your thoughts? Do you work on the LP side? Can I buy you a coffee and discuss this topic (off-the-record, if you wish)? Send me a message and let me know.

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NSA Ventures’ future, structure, and role in the ecosystem

This post is from the Northstack Memo, our newsletter and commentary on recent happenings in the Icelandic startup ecosystem, written by @kiddiarni.

NSA Ventures is standing on crossroads right now. Two investment managers and the CEO left in December to start their own fund. (They’re titled “Venture advisors” on the fund’s website). A braindrain like this calls into question the fund’s long term strategy and plans. These employees have more info on where the fund is headed and chose to venture out on their own.

Late March, the board of NSA Ventures announced Huld Magnúsdóttir as the new CEO:

Huld is an experienced manager with a diverse background from both the private and the public sector. From 2009 she was the Director General of the National Institute for the Blind, Visually Impaired and Deafblind and was the acting director of the Social Insurance Administration between 2015 and 2016. Between 1993-2008 she worked at Össur in Iceland and abroad in various management positions,  …

According to Almar Guðmundsson, chairman of the board of NSA Ventures, Huld is a great catch for the fund. “Huld has extensive business knowledge and experience in innovation, strategy and international operations after working world wide. She has the experience we’re looking for now that the next steps of the fund will be formulated.

The last two lines are in my opinion the most interesting ones. Almar didn’t comment any further on what exactly that means, but I’ll dump my ideas here.

  • The comments signal something that has been on the horizon for some time. From our notes from last year’s annual meeting:

    There will be a full re-evaluation of the funds’ legal structure this year. This is not new, and is mentioned in the Ministry for Industry and Innovation’s plan for entrepreneurship. According to the plan, NSA will focus on investing in funds, rather than individual investments.

  • These statements fit well with Huld’s CV, which doesn’t look like a classic VC hire. Her experience doesn’t come from founding or operating a startup or the finance industry. Rather, her last jobs have been administrative and management roles in institutions, which would be useful if the fund is aiming towards major changes in its strategy and operations.

These two things suggest to me, that the plan is to continue on the road to a fund of funds. This would focus the fund’s capital into investment funds, instead of NSA Ventures funding individual companies.

NSA’s structure (and legacy?)

NSA is an official institution, but not a governmental agency. It’s not part of the governmental budget but its existence is defined in law (nr 61 / 1997). This means that operational details like how directors are appointed to the board is law.

The initial capital used to start the fund is from several funds of the time (including the Fisheries Fund and Industry Development fund). That, in part at least, has led to some interesting rules (when we look at it now) in regards to who sits on the board. It’s a five person board, nominated by the Minister for Industry and Innovation as follows:

  • one without nomination (at the minister’s discretion)
  • one based on suggestions from a coalition of industry (I’m guessing that’s the Federation of Icelandic Industries, SI)
  • one based on nomination from the minister in charge of innovation and development in fishing (The Minister for Fisheries and Agriculture)
  • one based on suggestions from the coalition of companies in the fishing industry (I’m guessing SFS)
  • one based on a nomination from ASÍ (Icelandic Confederation of Labour)

Let’s break this down a bit. Two of five are discretionary picks from two ministers – innovation and fishing. Two are suggestions from the business community – general industry and fishing. One is from the labor organisations.

The discretionary picks make sense to me. While NSA Ventures is an independent institution, it’s built on official money. It’s understandable that the government wants influence in that case. Whether it should be on or two discretionary picks is up for debate.

The suggestions from the business community also make sense when you look at the history of the fund. Some of the initial capital came from industry specific investment- and loan funds. The financing for those came at least in part from the industries, and the law discusses this. The appendix to the law from 1997 discusses the reasoning for this.

The fifth board member comes out of the blue from the labor organisations. Reasoning for why the labor organisations should have a representative are completely absent in documents accompanying the initial bill.

It’s notable that one of the committee members reviewing the initial bill objected to this arrangement. “Nominations to the board show that the authors of the bill are still stuck in the old division by industry. Fisheries and industry have a nominee each, but the service industry has none.” The review further comments that there were suggestions of different arrangements, including nominations from the universities and engineering societies.

Any review of the laws about NSA should definitely look into how board nominations work. In today’s world, it’s worrying that technology industries are not explicitly represented, but the labor organisation is.

This arrangement was debated in 1997, and should absolutely be scrutinized now, twenty years later, in 2017. This is especially worrying now, that the funds most interesting investments are in software and health- or bio technologies. Also, just clearing up why ASÍ should be there would be nice (if you can make sense of it, please let me know).

NSA’s role in the ecosystem

An interesting part of the initial laws that founded NSA Ventures is the discussion about where in the funding stage the fund should operate. The memo that accompanies the law identifies three stages of startup funding: seed, start-up and expansion, and then states:

“The main role NSA will take in investment projects will be … funding expansion.”

It’s likely that this has been changed since the fund’s inception, especially because most of the fund’s fresh investments are in the earlier stages.

But it opens up the discussion about what the role of the fund is, and what it should be. Which leads to the bigger discussion of how the government should support investment in startups and innovation, which initiatives suit best for each challenge, and so forth.

With the new hire, a new minister, and obvious changes in operations at NSA Ventures, a holistic review is in order. Stakeholders – including officials and representatives of the ecosystem – should look at the fund’s role in the bigger picture, diagnose where the challenges are, and apply tried and tested initiatives to address those challenges.

What are your thoughts on this issue? Send me a message with your thoughts.

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