Tag: 2017

The Q3/2017 Funding Analysis

A quiet quarter on the funding side, but very interesting on the exit side. The effects of having only one active Icelandic fund still linger. Now that Crowberry Capital has officially started and NSA Ventures have more capital available due to an exit this quarter, deals might  start ticking up again, and some of the earlier Eyrir and Frumtak companies are due for a round soon.

Three seed rounds

We recorded three rounds in the quarter: Viska Learning, Ghostlamp and Teatime.

Last years Q3 was very active, and this time around there’s less than half of the investments YoY.

Comparing amount invested shows an even steeper drop, as we didn’t see any late stage rounds.

Brunnur the most active investor

Brunnur Ventures led two of the three investments. The fund has for the last quarters been the only active Icelandic VC fund, but now that Crowberry has been founded and NSA has some money to invest, they’re no longer alone in the market.

Investa, the angel / seed fund run by Hilmar Gunnarsson, Hjálmar Gíslason, Jói Sig and more veterans from the Icelandic tech scene participated in two rounds (Viska and Teatime)

The biggest news of the quarter, however, is definitely that fact that Index Ventures, a top tier VC, did its first investment in Iceland.

Seed money is Icelandic, growth money is foreign

This quarter most of the investment came from Iceland. The only non-icelandic capital were participants in Teatimes’ round (Index Ventures et al).

Although we don’t have a lot of deals to go on, you can see a trend emerging. The seed rounds are driven by Icelandic investors, but the later stage rounds are driven by foreign funds. There might be several reasons for that and we’ll discuss those in the upcoming Memo.

Two exits and a listing

Greenqloud was acquired by Netapp, in what is the first acquisition of an Icelandic software company by a Fortune 500 company (the completely first was probably DeCODE, acquired by Amgen in 2012). The amount was undisclosed, but we’ve discussed the acquisition in more detail here. The other exit was when Skynjun, an Icelandic audiobook publisher, sold to Swedish Storytel.

In addition, Klappir Green Solutions – a consortium of three companies, including Ark Technology and Data Drive – was listed on First North. Although no new shares were offered (it was only a listing, not a public offering), that move definitely created some liquidity for employees and investors.

This is the most exit activity we’ve tracked since the beginning of Northstack, which hopefully is a signal of things to come.

Looking ahead

This year will probably be the first of (hopefully) many where the Icelandic scene reaches some kind of equilibrium and predictable deal flow. Two to three active, local, venture funds that mostly focus on the earlier stages, and several later stage investments led by foreign funds.

It’s also a when the VC industry in Iceland reaches a certain crossroads: some of the management companies – Frumtak and possibly Eyrir – will likely start raising a new fund because they’ve fully committed their current capital, and whether or not that happens, might depend on whether the funds have success stories to tell. Others, like Brunnur Ventures or Crowberry Capital, are not in as much a need of raising more, because they have more available.

The ten companies participating in Startup Reykjavik 2017

Icelandic Startups and Arion Bank yesterday announced which ten companies will be participating in the Startup Reykjavik 2017 accelerator program. The companies will participate in a 10 week mentor-driven accelerator, share an office, access to mentors, and receive 2.4mISK (~$20k) in seed funding from Arion Bank in exchange a 6% equity stake.

This is the 6th time the accelerator program is run, and as such has become a staple in the Icelandic ecosystem. Companies that have graduated and later received equity funding include Activity Stream, Wasabi Iceland and Data Drive.

This year’s companies are:

  • Myrkur: A game development company founded in 2016 that is now working on developing and producing a new fantasy role-playing game.
  • My Shopover:  Connecting tourists with locals through shopping. Using the concept of a personal shopper and with the help of chat bot, people can either meet face to face or chat online with a local assistant.
  • Flow Education: Á comprehensive individualized education system, based on cutting edge psychological research and modern technology, designed specifically to teach children at an accelerated rate. 
  • Bone&Marrow: Our human ancestor were remarkably healthy. If not killed by warfare or accidents, they could live until their eighties. Their daily activity and food made them so healthy. Nowadays, people seem riddled with disease and health problems. Some expert argue that our nutrition has changed too much. Ancestral nutrition needs to be reintroduced for the modern man. Bone and Marrow aims to do that. 
  • Maul: Building an office catering platform, designed for employees lunch. Each Friday they select their preferences for the following week, having a choice of two or three dishes each day.
  • Itogha:  Providing users with a simple blood spot test to identify certain risk factors related to lifestyle diseases, such as high blood pressure and cardiovascular disease. The company also provides ready-made food products, developed in cooperation with chefs and scientists, to reduce this risk according to the needs of each user.
  • Zifra Tech: Developing a memory card that can encrypt any recording in real time. First use is for journalist to protect themsleves, their stories, and their sources.
  • Safe Seat: Designing and producing suspension seats for speedboats in a cheaper way making them available and feasible for manufacturers.
  • Data Plato: A data driven financial management system for companies that utilizes artificial intelligence to create your own virtual CFO.
  • Porcelain Fortress: A game studio with the mission is to develop and publish simple, fun and well-polished games for PCs and consoles.

Nortstack – Reporting and analysis of the Icelandic startup scene