Home to the most billion-dollar startups in the world, after Silicon Valley, Stockholm is becoming known as the startup capital of Europe. Interest in the city’s startups is at an all-time high, which was evident when more than 140 investors from over 60 venture capital firms in 11 countries attended the event STING Day on May 7th to meet with the entrepreneurs leading Sweden’s most promising startups.
The startups that generated the most interest from investors were Salesbox CRM, Single Technologies, Bumbee Labs, Severalnines and Findify, who were all invited to pitch on stage to a panel consisting of Seth Pierrepont (Accel Partners), Jessica Nilsson (Northzone), Ben Holmes (Index Ventures), Shari Doherty (Atomico) and Martin Lorentzon (Spotify). After questions and feedback from the panel the audience voted Findify, the e-commerce search tool, as the winner of the pitch competition.
Quizzed about what makes Stockholm a thriving environment for startups, Spotify Chairman, Martin Lorentzon, attributed it two factors. A “cluster effect” of the startup community helping each other out, and Sweden being a great test market due to its high Internet penetration, strong telecommunication networks and early adopter consumer base.
Lorentzon says it is the perfect time to start new companies, but whilst it is exciting that there is lots of venture capital available, he cautions startups not to take more investment than they need as “it is the hungry wolves that make the best hunters”. Meaning, if you are starving for investment you settle for bad terms, and if you are bloated you get complacent, but when you are hungry you use it wisely.
The quote of the day (year?) was delivered when Lorentzon was asked 15 quick questions by entrepreneurs Janna Jarlman of Competencer and Fritjof Andersson of Relation Desk. He was asked about the threat from Tidal, the streaming service that rapper Jay Z acquired for $56 million in March. This is what he had to say: “I’ve got 99 problems, and Jay Z is not the one I’m thinking about”, referring to Jay Z’s song “99 problems”.
Whilst 6-minute speed meetings between entrepreneurs and investors were taking place in the surrounding rooms, a panel discussion in the auditorium focussed on progressing the industry beyond just startup communities to debate the benefits and challenges of closer collaboration between startups and global corporations.
Some of Sweden’s most renowned startup entrepreneurs who have navigated partnerships and supplier relationships with big players, provided advice and insights for the younger startups that were embarking on their journey.
Johanna Wollert Melin of Trice Imaging Inc, spoke about the six-year journey of the company that has developed a patented medical image sharing tool that was once dismissed as “an idea that will never work”, but today holds strategic partnerships with multiple healthcare companies, including Philips, and has medical customers across Europe, UAE and America.
Saeid Esmaeilzadeh of Diamorph, who lists McClaren as one of their many customers, stressed the importance of listening to the needs of your customers. The company develops highly customised glass material for which they can charge and get a 33 percent gross margin. This high specialisation strategy has led to development of multiple companies with their largest customer making up only 3 percent of their total revenue.
Lina Gebäck and Niklas Aronsson of Linas Matkasse talked about the benefits and challenges of building a business that is so personal your name is literally written all over it. Scaling the business to delivering a million dinner servings every month, they shared their stories about building and maintaining the culture.