Tag: funding (Page 1 of 3)

The Q2/2017 Funding Analysis

The second quarter of the year brings the first funding report we do in 2017. The reason: we only recorded one investment in Q1, so there’s no need for a special report on that. This report also is the first one since we started our big Icelandic startups scene data project which means that the data we’re using now is augmented with data from Crunchbase.

Four funding rounds, $14m

This quarter we recorded four funding rounds: Meniga, Takumi, TripCreator, and Mink Campers.

This quarter was much more active than the one before (which only had one investment – Goodlifeme / SidekickHealth), and has the same amount of investments as the year before (Q2/2016).

The main difference between the years is the amount invested; the amount invested increased by over 240%, mainly due to two rather big rounds; Meniga and Takumi.

This leads to a (rather obvious) next chart: the majority of capital invested came from outside the country; around 70%.

The bigger picture

In 2015 we had a big influx of capital; three funds that started and were very active in the first quarters. Those rounds were in general fairly small (never above 500m ISK or between $4-5m) and early stage. As we’ve talked about for some time now, two of those funds have stopped investing in new companies, which leaves only one active Icelandic fund at the moment.

Naturally, the rate of investment will slow down. Hopefully for the ecosystem, the sizes of rounds will increase (because the companies that raised before are raising follow-on rounds). In fact, three of the four companies that raised money in Q2 2017 had at least 2 funding rounds before the one they announced this quarter.

There are also some interesting takeaways in regards of the capital coming in. It’s mostly foreign – when our startup companies need growth money they venture abroad to get it. Which makes complete sense; the Icelandic funds aren’t big enough to be able to go as big as the bigger foreign funds.

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Meniga raises €7.5m led by Industrifonden

Fintech company Meniga just announced a €7.5m funding round led by Nordic investment fund Industrifonden. Previous investors – Velocity Capital, Frumtak Ventures and Kjölfesta – also participated in the round.

From TechCrunch:

“Today’s banks are under pressure to innovate and improve their customer experiences online and yet they are beholden to legacy processes and legacy systems and are usually ill equipped to provide their customers with world class user experience in digital banking,” Meniga co-founder and CEO Georg Ludviksson tells me.

“Meniga has built a reputation as a strong innovation partner to banks and its software solutions help some of the world’s largest banks utilise their data to make their online and mobile banking more personalised and inspiring”.

Ludviksson’s coining of Meniga as an “innovation partner” to banks isn’t simply startup speak, nor is it bluster (the Meniga founder talks in soft, considered Icelandic tones). The company holds five-day onsite design sprints with its banking clients, and last year it conducted more than 80 user testing sessions in four countries — again, many of them in partnership with the banks.

€3m for UK MedEye implementation

Mint Solutions, along with partners in Belgium and the UK, has received a €2.4m grant from the EU’s Horizon 2020 Fast Track to Innovation. Total cost of the project, including contribution from partners, is €3m.

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SidekickHealth maker Goodlifeme raises $1.5m round led by Frumtak Ventures

Frumtak Ventures just announced a $1.5m investment into Goodlifeme AB, maker of Sidekick Health. Other participants in the round include Tennin ehf. and other investors.

This investment gives our team of physicians, psychologists, public health professionals and game developers the opportunity to deepen SidekickHealth’s global reach, particularly in the United States,” said Tryggvi Thorgeirsson, co-founder and CEO of Goodlifeme said in a statement.


Sidekick Health is a lifestyle companion app, utilizing insights from behavioral economics, artificial intelligence, and evidence based guidelines from the US CDC, to enhance the effectiveness of lifestyle education and coaching.

According to the statement, the app has shown great benefit to its users:

To date, companies and health organizations that have augmented in-person Diabetes Prevention Programs (DPPs) and employee fitness initiatives with SidekickHealth have seen an 82% retention rate among participants over a 4-month period, 76% increase in participant weight loss, and a 65% reduction in soda consumption.

Eggert Claessen, managing partner of Frumtak Ventures: “SidekickHealth’s solution … presents a significant opportunity to positively impact the wellbeing of employees and patients, while also reducing health-related overhead costs for enterprise companies and organizations globally.”

Picture is of Sidekick Health co-founders Tryggvi Þorgeirsson and Sæmundur Oddsson.

Mint Solutions raise €5m Series B

Mint Solutions, developer of the medication safety system MedEye, just announced a €5m Series B round led by Brabant Development Partners and LSP (Life Sciences Partners), and Seventure Partners. Other shareholders, including Icelandic NSA Ventures, and smaller private shareholders, also participated in the round.

“This investment comes at a crucial time for our MedEye product,” Gauti Reynisson, CEO of Mint Solutions said in a written statement. “We are experiencing strong demand from Dutch hospitals and we see ample growth opportunity in other care segments, including long-term care, as well as international markets.”

Mint Solutions is an Dutch-Icelandic company that was established to improve medication safety. It’s main product, MedEye, uses computer vision to ensure that patients get the right medication, in the right dosage, at the right time.

Greenqloud raises $4m from investor Kelly Ireland

kelly ireland

Kelly Ireland

Greenqloud, the maker of cloud management software Qstack, just announced a $4m investment from investor Kelly Ireland. Kelly will join the board of directors of the company. This was announced by Viðskiptablaðið today, and Kelly on Twitter a week ago.

In a conversation with Viðskiptablaðið, Jónsi Stefánsson CEO of Greenqloud said this was a very important partnership. “We are moving into the American market, and partnering with a seasoned expert in the technology industry is very good for us,” Jónsi said (translated from Icelandic).

The company (for the lack of a better word) pivoted in 2015, when they moved from providing environmentally friendly cloud hosting solutions, to selling cloud management software.

Previous investors in the company include NSA Ventures, Keel investments and Novator.

Data Dwell secures $1.2m in funding

Digital asset management (DAM) company Data Dwell has secured a $1.12m (140m ISK) funding round by Frumtak Ventures. The company also received a $80K (10m ISK) marketing grant from the Technology Development Fund.

“We think Data Dwell has enormous growth potential and like the product offering,” Eggert Claessen, GP at Frumtak Ventures, said in a statement. Following the investment, Eggert takes a seat on the board of directors as chairman.

The company’s list of Icelandic clients includes Marel, Coca-Cola Iceland, and Vodafone Iceland. They also service Cartoon Network, and will use the capital to fund an expansion into the British market.

Data Dwell Signing Photo

From the signing. Left to right: Eggert Claessen (Frumtak), Ólafur Helgi Þorkelsson (Data Dwell), Svana Gunnarsdóttir (Frumtak), Skarphéðinn Steinþórsson (Data Dwell).

“The investment will help us grow in foreign markets, and speed up product development,” said Ólafur Helgi Þorkelsson, CEO of Data Dwell, in a statement.

Data Dwell is digital asset management software and was founded in 2012 by Ólafur Helgi Þorkelsson and Skarphéðinn Steinþórsson. It now employs nine people, and has customers in Iceland and the UK.

Norðurskautið covers the Icelandic Startup and Tech scene. Follow us on Twitter or sign up for our mailing list to keep up to date. You can also join our Slack community – http://bit.ly/slack-is


Pharmaceutical company 3Z raises $400K seed round

3Z pharmaceuticals has closed a $400K seed round. The investors were Swiss biotech companies Baliopharm and Probiocon, as well as previous investors NSA Ventures and Sigþór Sigmarsson.

“3Z offers a unique technology to speed up the development of innovative drugs for the treatment of all kind of neurological disorders,” says Andreas Hermann of Baliopharm and Probiocon, who will join the company’s board of directors.

3Z pharmaceuticals is a contract research company focusing on the discovery of Central Nervous System (CNS) drugs. It provides pharmaceutical companies with expert services in high throughput screening of small molecule libraries for CNS effects diseases like epilepsy, Parkinson‘s disease, Insomnia and ALS.

Dr. Andreas Hermann and Dr. Karl Ægir Karlsson

Dr. Andreas Hermann and Dr. Karl Ægir Karlsson

The company was founded in 2008 by Karl Ægir Karlsson and Haraldur Þorsteinsson with support of Reykjavik University Resarch Lab. With the investment, the company aims at focusing on sales, as well as preparing for an A round.

“For 3Z this is a giant step towards bringing to market what we believe is an excellent solution for a large number of companies,” Karl says. “After years of R&D, proof-of-principle studies we are ready for take-off.”

Norðurskautið covers the Icelandic Startup and Tech scene. Follow us on Twitter or sign up for our mailing list to keep up to date. You can also join our Slack community – http://bit.ly/slack-is


Tulipop closes $2m Series A round led by Frumtak Ventures

Tulipop, maker of Tulipop world and character branded products, just announced a $2m financing round led by Frumtak Ventures. Þorbergur ehf., a previous investor, also participates in the round.

“Tulipop is an exciting investment opportunity. [It] is a company built on Icelandic ingenuity which has a huge potential for international growth,” says Svana Gunnarsdóttir, GP and co-founder at Frumtak Ventures. Svana will be joining the company’s board as chairman.

The company was established in 2010 by Helga Árnadóttir and Signý Kolbeinsdóttir. In 2015 the company was named Highly Commended for Best Newcomer in the Smallish Design Awards. Its products feature characters like Mr. Tree and Bubble from the magical island of Tulipop. This August the company will unveil a new line of Tulipop products licensed to Toynami, an American maker of quality toys.

Photo by Axel Sigurðsson.

Photo by Axel Sigurðsson.

“Since founding Tulipop six years ago, our goal has been to bring the world of Tulipop and its characters to kids around the world,” Helga, who is CEO of the company, says.

Tulipop’s products are sold in more than 120 stores in 14 countries. With the investment, the company aims to accelerate its international growth.

Tulipop has previously received an undisclosed investment by Þorbergur ehf., as well as a total of ~$120K in marketing grants from TDF.

Norðurskautið covers the Icelandic Startup and Tech scene. Follow us on Twitter or sign up for our mailing list to keep up to date. You can also join our Slack community – http://bit.ly/slack-is

The Memo: Iceland might be running into a VC problem, part 2

​Good morning everyone – hope you had a great, long weekend. This memo is going out on a Tuesday because we want you to start the workweek with a Memo 🙂

A couple of Memo’s back, I promised to revisit my prediction about Iceland’s VC troubles. I’ve had time to research it better, as well as discussing it with several people in the industry.

Current status: two of three funds are almost fully deployed in regards to fresh investments. Eyrir has a couple hundred million available (and not sure about fresh investments). Frumtak is closing two investments and is unsure if they’ll make more. Brunnur aims at 10-15 total. They’re at three announced investments now. In total we’re looking at 9-13 fresh investments left from the new funds.

This means that we need a new fund to start raising soon (it’ll take some time to close a new fund). Otherwise we might end up with a period of little or no available capital for new companies. As we saw last year, raising VC funds in Iceland is possible. But it might be tricky.

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Several (gloomy) points about the outlook for Icelandic VC:

The Icelandic LP market is tiny in a sense that almost all the LP’s are pension funds. Changes in pension fund regulation allow the funds to own only 15% of any slhf. Most VC funds use the slhf. corporate form. This means that to raise a fund, a GP needs at least seven participating pension funds (that is, if all the capital comes from pension funds). Banks have been participating as well, but as I said, the pension funds are the main LP’s. With a lot of money. A lot.

Our funds are small. Most VC funds operate on a 2/20 model. The numbers are interchangeable, but the model is the same. Funds charge a percentage (2%) in annual management fees, and a carry bonus (20%) on gains made. Iceland’s biggest VC fund, Frumtak, is 5bn ISK. A 5bn ISK fund charges 100m ISK (based on 2%) per year in management fee, a little under 8.5m ISK per month. The carry bonus comes into play once the fund has returned a profit to its investors, and therefore not a part of regular operation income or expenses. It’s more so the GP’s have skin in the game.

A VC fund would want to employ investors, analysts, and operators. They need staff to source and vet investments, market their portfolio and build connections. It’s obvious that such operations are hard on a 8.5 million ISK monthly budget. Hence, the three funds all have three or fewer employees.

We also need our funds to be active in collaboration with non-Icelandic funds, building connections and bridges to Silicon Valley and other hubs. That also costs money. We need our VC’s to do a lot, with not very much.

Our VC industry is young, and our VC’s need to have the resources to build these networks and connections. I’m not saying that our funds aren’t doing this, just pointing out that our funds are, well, bootstrapped.

We haven’t had a success story. We’ve had great companies, sure. But we’ve yet to see a financial success story for a VC backed company. We’ve had a couple of moderate exits in the last years (Zymetech was <$10, Datamarket $11-14m, Clara <$12m, Modio was undisclosed), but no home-runs. A success story (or few) would make raising a fund easier.

And then there’s the capital controls. A total no-brainer. It’s essentially illegal to transfer funds out of Iceland without special exemptions. It’s given, that such measures make growing an industry that allocates capital harder.

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But wait, it’s not all bad 🙂

Now let’s take a break from all the gloom. What’s been happening in Iceland in the last years is encouraging. The VC environment isn’t perfect, but there were still 12.5 bn ISK announced last year in VC money. That’s more than the last ~20 years before (at least. I think. I’m not that old so I wouldn’t know, and I haven’t researched it a lot).

But, building a powerful and experienced investor ecosystem takes time. Startup guru Paul Graham recently discussed this in a talk he gave in Pittsburgh. The topic was How to make Pittsburgh a Startup Hub.

There is one more thing you need to be a startup hub, and Pittsburgh hasn’t got it: investors. Silicon Valley has a big investor community because it’s had 50 years to grow one. […]

If an investor community grows up here, it will happen the same way it did in Silicon Valley: slowly and organically. So I would not bet on having a big investor community in the short term. But fortunately there are three trends that make that less necessary than it used to be. One is that startups are increasingly cheap to start, so you just don’t need as much outside money as you used to. The second is that thanks to things like Kickstarter, a startup can get to revenue faster. You can put something on Kickstarter from anywhere. The third is programs like Y Combinator. A startup from anywhere in the world can go to YC for 3 months, pick up funding, and then return home if they want.

My advice is to make Pittsburgh a great place for startups, and gradually more of them will stick. Some of those will succeed; some of their founders will become investors; and still more startups will stick. (emphasis mine. Link)

I think we can exchange “Pittsburgh” for “Reykjavik” in Paul’s text, and much of it still holds true.

We’re a young ecosystem, and the most important thing we can do is to show perseverance and tenacity. Grow what we can grow. Make things better, slowly but surely.

This emil is part of our weekly Memo: Commentary on the Icelandic Startup Scene. You can sign up here. If you have comments, thoughts or tips, tweet at me directly at @kiddiarni or send me an email.

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