Cool Copenhagen warms up its start-up scene
With its constant flow of dark Danish TV dramas, these days Copenhagen is typically called the backdrop of The Killing, The Bridge and Borgen. However far from its fascinating Scandi criminal activities, the city s tech start-up scene is making a name for itself as an environment worth enjoying.
The start-up neighborhood can attest to the achievements of Danish tech business owners. Online takeaway service Just Eat, now based in London and which floated on the stock market in 2014, is a Danish success story. Meanwhile, Copenhagen s tech community fasts to emphasise that Skype co-founder Janus Friis is Danish.
However Danes don t have to simply recall to find their success stories: wine app company Vivino, employee engagement and retention tool Peakon, and customer evaluation platform Trustpilot are 3 of the city s present crop of high-flying start-ups.
The Danish and Copenhagen tech scene has a long history of making a strong contribution to the international tech scene with shows languages Ruby on Rails, C++ and PHP all created by a Dane, states Neil Murray, creator of The Nordic Web, a website that provides analysis on the startup scene throughout the area.
However, till a couple of years ago the start-up scene was very dispersed, and business such as Just Eat and Zendesk [ a customer service software application company] had no option but to locate themselves somewhere else in order to succeed.
He states, however, that within the previous few years Copenhagen s startup scene has become more joined up. Co-working spaces include Rocket Labs and Founders House, as well as #CPHFTW, a non-profit organisation promoting and combining the city s tech startups as well as a grassroots movement. The neighborhood spirit has even produced a primary tech hub, Startup Village, at Islands Brygge.
The Danish startup scene, which has a focus on business-to-business enterprise, is certainly attracting the attention of financiers. In 2015, The Nordic Web tracked 65 investments worth $273.5 m (192.2 m) in Danish start-ups up from 38 in 2014. It predicts more than 100 investments in Danish start-ups in 2016.
Murray says the money is mostly originating from investor, with Seed Capital the most active of the local firms, and Sweden-based Northzone and Denmark investors Northcap and Sunstone also particularly active. Their investment isn t hitting a broad range of Danish startups: 84 % of the financing was invested in 10 companies, with Trustpilot getting an excellent $73.5 m (51.7 m) and software firm Siteimprove raking in $55m (38.7 m) in 2015.
Every year we purchase two to three Danish companies, with the past year seeing the number increase to five, states Nikolaj Nyholm, partner at Copenhagen-based venture capital firm Sunstone Capital, whose investments include Peakon. We are now seeing the outcomes of the previous years enhanced start-up activity and would not be shocked if the number increases. For a very long time the repeat entrepreneurs had their roots in the dotcom age of 1998 to 2001, but luckily we are lastly being dismissed by a new crop of repeat entrepreneurs developing terrific products like Peakon.
Why is the Copenhagen tech ecosystem taking off? There s a lot of skilled individuals and a great education system, says Dan Rogers, co-founder of Peakon. The company was formed by four prominent names in the tech start-up sector, including Podio co-founder Kasper Hulthin, on a summerhouse in R rvig, Denmark in 2014. Rogers says Copenhagen lacks a strong history of start-ups, adding that excellent start-ups breed more good startups.
This is restated by Rasmus Makwarth, co-founder of Opbeat, a platform for designers that has actually gotten significant investment over the years consisting of $250,000 from a group of prominent angel financiers consisting of Instagram co-founder Mike Krieger and Facebook co-founder Andrew McCollum.
Denmark as a tech ecosystem is so little that there s few people to request for recommendations which s what s been missing out on, says Makwarth at his co-working space over in Startup Village. However, he s positive following the introduction of more serious players in the city in current times.
Makwarth says some business owners don t go back to the Copenhagen startup scene after offering their venture, but the creators of Podio have actually remained and established Peakon.
He says: Having people around who have succeeded and offered is vital to the environment. We wear t have the American dream embedded in our culture so we require somebody to press us.
Visit any start-up in Copenhagen and you re bound to discover worldwide workers from across the globe. Denmark has appeal as the 3rd happiest country on the planet, with strong health care and childcare benefits and a concentrate on work-life balance.
Still, regardless of the durable social welfare system, one of the key obstacles for the tech startup system is the lack of risk-taking in the city. While there s a great deal of enthusiastic Danish startups, in other cities such as London everybody is defending survival, which pushes the limits. Here individuals have it more comfortable, says Rogers.
Christoffer Malling, head of #CPHFTW, concurs. A lot of Danes stick to business tasks rather than taking a risk. Some state the federal government has actually not been as encouraging of the tech community as it must be, although Murray states interest and assistance from the federal government is gradually enhancing, adding that before 2014 startups needed 80,000 DKK (8,389) in capital to register a company, whereas nowadays it is simply 1DKK (10p).
Still, Malling has grand designs for Copenhagen s startups. We are very enthusiastic, he says. We are the next significant European tech start-up center [...] now we have the business climate, the capital, the people, the community contractors. By 2020, Copenhagen will be regarded as a significant tech hub.