The Reykjavik Startup Scene – Year in Review

The Icelandic startup scene grew stronger in 2013 with key companies growing, several exits and a mega success in the end of the year.

The year started slowly but in May it was announced that the start up Clara had been acquired by Silicon Valley company Jive software for $6,5 million. Clara is one of the Icelandic renaissance companies founded around the 2008 bank crash. Until that point in time, Icelandic companies had never had any notable presence in Silicon Valley. This was about to take an interesting turn.

The Reykjavik startup environment has been changing and maturing very rapidly in the past few years. Events are increasing with events such as the Golden Egg business plan competition and the Startup Iceland conference. The number of actors within the ecosystem is also increasing with additions in both the support functions as well as on the investment side. This injection of new actors takes pressure of companies such as Klak-Innovit which have been key drivers of many projects in the startup ecosystem.

Both Arion bank and Landsbanki have a designated innovation employee which work with startups. Arion bank is the key supporter of Startup Reykjavik which is an annual business accellerator where companies receive seed investment as well as mentorship. Landsbanki is the biggest supporter of Startup Weekend Reykjavik, a three day challenge to form a good idea for a company and the UnConference which is a conference format imported from MIT.

The Startup of the year 2012 was probably Meniga, maker of home finance software which is currently used by six banks in five countries. The company has grown very rapidly and has around 50 employees. In June they announced that they had received 800 million ISK ($6M) in new seed financing from a new fund called Kjölfesta which is mostly backed from pension funds.

Another new investor which arrived in the startup scene with a bang is Jon von Tetzchner co-founder of Opera Software. Jon started to invest capital and advice to a number of startups such as, SmartMedia, Budin, Hringdu and Spyr. In addition to being an active investor, Jon opened this december a Co-Working space for 24 startups.

In November, software maker Betware was sold to the Austrian corporation Novomatic for an undisclosed amount but estimated at between 20 and 30 million USD. Betware has 70 employees in Iceland which will remain here and the headquarters will also stay in Iceland.

The biggest news of the year were on November the 7th when game maker Plain Vanilla finally launched it‘s game QuizUp on the Apple App store. Plain Vanilla had been in the news several times because of their success in attaining seed funding from Silicon Valley venture capital firms, most notably Sequoia capital. Within hours of its launch the game went viral and has grown to having 5 million users in the space of six weeks. In the end of December, Plain Vanilla announced that they had raised a further $22 million from Sequoia which they planned to use to develop their business further.

This amazing success makes Plain Vanilla without a doubt the Startup of the Year in Iceland in 2013.

Companies to look out for in 2014 in addition to ones already mentioned here are cloud hosting company GreenQloud, Datamarket, Skema and Re-Make electric. Having said that, the dark horses are always going to show up, we just never know when or where. That’s what makes the startup scene more dynamic and interesting than anything else in business.



6 responses to “The Reykjavik Startup Scene – Year in Review

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