Growth in Startup Reykjavik applications

The application process for Startup Reykjavik is now over. This year we received 247 applications which is a 76% increase since last year.
Now, this is interesting and it seems as if 2015 was more of an exception than otherwise. The number of applications to Startup Reykjavik since 2012 has been the following


If I allow myself to interpret these figures, my take is this:

  1. The gradual increase from 2012-2104 makes sense. An unknown program slowly gains interest and attraction.
  2. The reasons for the drop in applications in 2015 is likely threefold. First, the economy in Iceland has been improving, we are dealing with practically no unemployment, translating into that entrepreneurs may not follow their dream of starting up their own business since they have a steady job. Secondly, one could argue that demand in early stage assistance with Startup Reykjavik and other initiatives had been satisfied to some extent, meaning fewer applications. Thirdly, but probably most importantly – news about the success of previous cohorts was not obvious or tangible. Relatively few companies had received funding or other means of financial support for their businesses. Startup Reykjavik was therefore perhaps not a proven business case in the eyes of the ecosystem. Although the support for Startup Reykjavik companies was (and is) enormous and great for the founders themselves, participation may not have secured them the desired traction or business sustainability in the aftermath of the accelerator.
  3. The increase in 2016 is not a surprise. There are a few reasons from my perspective:

    EskiTech (2012 cohort) meeting with investor at DemoDay
  • The Icelandic startup ecosystem improves every year. There are more events, more support for startups, more coworking spaces, more media attention, etc. There are three accelerators operating, Icelandic Startups has shifted its focus towards more international approach (launch pad from Iceland to abroad), Startup Iceland conference improves every year and gains interest internationally. Media is active in telling stories about the success of Icelandic startups and new blogs have seen the light of day (including my own, Nordurskautid, Startup Iceland). Gulleggid, the business plan competition was held for the ninth consecutive year.
  • Three VC funds were initiated in 2015. The fact that companies getting funded and portrayed widely in the media is therefore no coincidence. This pattern will continue somewhat into 2018 at least (2015-2018 is the funds’ investment period). Funding for startups is evidently a carrot for those starting up their businesses today.
  • We definitely see new business angels dipping their toes in the early stage investing pool.
  • Good stories of exits (Datamarket, Podio and more) in addition to “older” companies like CCP almost pivoting their business, experienced founders starting new companies or investing in new startups fuel further interest for those in the early stages.
  • Government has highlighted focus points for startups and how to support them on their endeavors. I’ve pointed out some nuances to the program, but it’s a good start.

All in all, I and everyone at Arion bank is thrilled how the numbers of Startup Reykjavik applications turned out. Now it’s time for reviewing the applications, filtering out the top 10-15% and have meetings with those teams. If everything goes as planned, we will have a clear picture of the ten teams at the end of April / beginning of May. As in recent years, we will publicly announce the ten participating teams at the Startup Iceland conference at the end of May.

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