The state of startups: a letter from our founder
As we ease into summer, Sting Founder and CEO Pär Hedberg reflects on what’s changed in the startup world over the last year and what potentially lies ahead.
Startups showed incredible resilience during the pandemic
If I had to sum up how our startups handled the pandemic, I’d say with amazing resilience. When it hit, we were worried that a lot of them would face big problems, but thankfully that didn’t happen on a large scale. In 2020, companies in entertainment and travel naturally suffered, but as our latest figures show, the majority still delivered strong results. The pandemic was a catalyst for widespread industry digitalization, and as most of our startups are in tech, the pandemic’s impact has overall been limited. Best of all, most of the ones who were affected managed to survive and are beginning to bounce back (such as the artist booking platform Gigital).
Barriers to securing funding have lowered, and there’s plenty to go round
Getting first-line access to capital is easier than ever. Now that everyone uses Zoom, our startups are securing more and more meetings with investors – and it doesn’t matter if they’re in New York, London or Berlin. A natural side effect of this is that international investors are beginning to look further afield and scout more in the Nordics – which in turn increases competition among Swedish investors. The current supply of capital overall is also very good, and there’s a lot of money out there for hungry young startups (except for deeptech startups…).
New actors with deep pockets for deeptech
For a long time, deeptech companies have been overlooked by private actors like VCs and business angels. In both Sweden and other countries, it’s been hard for them to secure financing because they require a lot of money, they’re risky, and it takes a long time to see a return. But I’m incredibly happy to see this funding gap is narrowing down. We have seen new public funding possibilities in this pace, with the EU EIC initiative, and also several new private family funds entering.
Deeptech companies create solutions to big problems using complex technologies with long development times. Today, new actors are starting to make big ticket investments in deeptech technology, as they realize that once these solutions launch, they have the potential to transform entire industries. This is extremely positive – especially for our deeptech incubator companies. This fall, we’re also launching our new test drive program specifically for deeptech entrepreneurs in partnership with KTH. Keep an eye out for more info!
The way we view the world has changed
The pandemic has influenced the way we see the world both directly and indirectly. Of course, we’ve made obvious changes to our behaviors, but I think there’s also been a more subtle shift in our collective consciousness. We’re more aware of our planet’s vulnerabilities than ever before – and this is reflected in the type of startups we see applying for our programs, and where the money is being funneled.
For instance, healthy living and climate change have become top of mind, and in the last two accelerator programs we’ve seen an increasing number of sustaintech, cleantech and healthtech startups apply. We proactively adapted to these cultural shifts by running specific programs to support startups in these areas, which were really successful.
Of course, the healthtech industry in particular is booming. The demand for digital solutions enabling quicker, more cost-effective access to care is still there – as demonstrated by the success of companies like Kry, MediCheck, health integrator, Care to Translate, and Mindmore. This will continue to be an interesting space for the next few years.
At Sting, the pandemic has still made it challenging for us to deliver our services to the best of our ability. People are a huge part of our business, and what makes our offering so unique is comprehensive access to a qualified business coach, ad hoc support, networking events, and a close-knit community of entrepreneurs to bounce insights and learnings with. We will continue to use digital channels when it’s the best option, and of course stick to public regulations. But thankfully, things slowly feel like they’re getting back to normal – and I’m looking forward to giving our startups a truly world-class accelerator experience in person again and a dynamic, creative workspace.