There are currently four venture capital funds in Iceland – three of them initiated in 2015. The investment capacity of these three is around USD 85 million to be invested in the next 3-4 years.
Historically, this is groundbreaking news for Iceland. Never before has so much funding been allocated to early stage companies. Since 2008, much discussion has been around how Iceland, like any Western country, could grow out of the recession in 2009-2010. Well, local investors, primarily Icelandic pension funds and banks, pulled themselves together, and placed a fraction of their capital to venture capital. This has been excellent to the highly innovative Icelandic startup scene yet capital deprived. At least, McKinsey stated in late 2012 that in order for Iceland to be at the same investment level as the United States, annual investment in early stage companies need be USD 25-30M. Finally, the country is getting closer to that reality. Continue reading
Since 2012, I have been fortunate enough to be on the team that started Iceland’s first seed stage, mentor driven business accelerator, Startup Reykjavik. Setting up such a venture was neither evident nor self explanatory. Arion bank, my employer, already had plans on aiding the Icelandic startup community in some way at the time but did not necessarily know exactly how. The initiation of a program where entrepreneurs would have the chance to fulfill their dreams by starting a company, receive guidance through mentorship and a small investment, not only requires money but long term commitment. And much of both. Not to mention understanding of how early stage investing works and a whole bunch of patience. In general terms, these are perhaps not the first-in-mind qualities that a bank has (apart from a balance sheet) to most people.
But Arion bank has.
Summary: The need for Democratization and Transparency is reshaping our societies.
Working extensively with startups yet at the same time for a larger corporation, a bank, makes one see things from a very different perspective. There are always things to settle, since the “world” view of those two worlds is somewhat different. It is intriguing to see how people put on their individual (startup, banking, consumer, spouse, parent or children) hat in a discussion that emerges. After all, we are all people, although many recent world event may point to other. Yet, in a rather homogenized world, such as the startup or banking worlds are separately, two major forces in the global perspective are driving an extensive change.
In early 2008 I moved to Iceland after five years in Stockholm. In the next two years, I experienced, as many Icelanders, extreme changes in both the economy and mindset of people, both locally and non-locally. I will not dwell on that issue since so many have written and shared their thoughts on what could have gone better.