Innovation, Startups and Venture Capital in Iceland

The Memo: First look at Startup Reykjavik

Sorry for being late with this week’s Memo. I had a very busy weekend. Also, I was at RÚV’s Morgunútvarpið this morning (link) discussing Norðurskautið and startup funding in Iceland (Icelandic). Now, on to the Memo.

Startup Reykjavik kicked off

Last week saw the first public event of Startup Reykjavik –– the accelerator run by Icelandic Startups and Arion Bank.

The event was a pop-up and pitch where five companies in the 2016 batch pitched. Vísir has written introductory articles to all the companies participating this year.

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The following companies pitched:

  • Platome, a B2B life sciences company that makes a solution to grow stem cells. Currently scientists use animal derived serums, which Sandra, the CEO, referred to as animal blood. The product is rooted in academic research, which sounds good. However, I don’t know the first thing about biotech or stemcells so don’t take my word for it. (Vísir link)
  • Isold Film, a financial instrument for the movie which I didn’t understand completely. It seems to rely on the tax refund for movie projects and is structured as a PE fund (2/20 structure). Also, I’ve never heard of a PE fund participating in a startup accelerator.
  • Moon Chocolate, makers of fair trade, organic chocolate. Sound like a competitor to Ommnomm, who’ve been doing good. Hopefully there’s room for two similar chocolate makers here, although I haven’t seen a 10x return on artisan sweets manufacturing yet. (Visir link)
  • Noted, described by the founder as “AirBnB for school notes”, where notetakers can sell their notes to other students. Here’s an intro video from the team. Allowing people to sell their content like this is a good idea, but the pitch didn’t address the real issues with starting a platform: creating enough supply and demand for it to grow organically. Looking forward to their final pitch on demo day. (Visir link)
  • The fifth was Icelandic Lava Show, an attraction that allows people to experience molten lava flowing through a room. I hope they aim at being a global attraction. Imagine going to the Icelandic Lava Show in New York City — similar to Madame Tussaud’s which is everywhere. Would strengthen Iceland’s brand and make for a better investment opportunity than a local only thing. Could even become a franchise. (Visir link)
  • Other companies that didn’t pitch: Flow, Strivo, Convex, Drexler, and Total Host. Full list here.

The pitches were surprisingly good. I say surprisingly because the companies have only been at Startup Reykjavik for a couple of weeks. The founders were prepared, passionate, and their message was refined.

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Last year, after the demo day of Startup Reykjavik batch 2015, we interviewed Linus Dahg, investor at Wellington Partners in London. We wrote:

According to Linus, many of the companies pitching were not optimal VC cases. “Great businesses, but not optimal in terms of how big they can become. I did a blogpost about what we look at from a venture point of view. We have to look at companies that can return a minimum of 10x, and that have the possibility of becoming a 30x investment.

I think his thoughts are still relevant — although I hope to be proven wrong in this years demo day in August.

In other news 

We’re looking into expanding our reports and research functions. If there’s something you’d be interested in having a report or research on, shoot me a message — we’re looking for interesting things to study.

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