Note: Kiddi has been consulting with the ministry on this topic and others, related to innovation policy.
This morning, the Ministry for Industries and Innovation, submitted the bill that will create Kría, to public consultation. The bill creates a new entity – Kría – which will invest in venture capital funds that fulfil certain criteria, which – although not specifically spelled into law – are recommended in the accompanying memorandum (is. greinargerð). The bill comes several months after Þórdís Kolbrún R. Gylfadóttir announced Kría.
“Kría will support the growth and development of Icelandic industry and an active venture capital environment for startups and other innovative companies,” the minister commented in a statement. “When we introduce our innovation policy last fall, we highlighted the importance of building out innovation driven export businesses, and those kinds of businesses need specialised financing options, like venture. Kría will support the development of those options.”
The bill’s aim is to support the development of a local, internationally connected and competitive venture capital ecosystem, through participation in venture funds as an LP, with a call option for other LP’s in the venture fund to buy out Kría’s (the government’s) share of the fund at a predetermined price.
“Just yesterday, the Icelandic startup Mainframe Technologies raised more than $8 million from leading venture capitalists Andreessen Horowitz, marking the funds first investment into the Nordics,” Þórdís commented. “Mainframe had previously raised money from local venture capital fund Crowberry Capital. This example shows how valuable having an active, internationally competitive and connected local venture capital scene can be.”
According to the bill, it’s based on similar initiatives from elsewhere on the globe, utilising best practices and the learnings from other countries that have tried to spur the growth and development of their own venture capital industry.