Attracting talent but lacking investment: is Norway’s start-up scene too well-kept secret? | Jobs Recent

With fairy-tale fjords, magical northern lights and awe-inspiring nature, Norway is certainly a place that inspires innovation. However, it is struggling to scale its startups.

Norway is diversifying away from its roots as an oil and gas producer, with its engineering talent joining or launching green energy start-ups instead. The country, known for its high quality of life, also attracts foreign tech talent.

A country of almost 5.5 million inhabitants it is ranked 24th in the world in terms of the start-up ecosystem and 13th in Western Europe. It lags behind its neighbor Sweden, but is slowly trying to catch up.

As one of Norway’s six unicorns, start-ups worth over €1 billion, ed-tech Kahoot! says that Norway’s society and commercial structure has historically been based mainly on commodities such as oil, natural gas and fishing.

However, in the last 10-20 years, greater efforts have been made to diversify the economy to generate new industries such as technology.

“Key ingredients for laying the foundations for a more diverse and entrepreneurial economy are an educated workforce, availability and deployment of the right technology, access to capital and a sound regulatory framework,” says Kahoot! Eilert Hanoa CEO.

“We’ve seen progress in all these areas, although there’s still a long way to go,” he told Euronews Next.

Investment failure

One of Norway’s biggest problems is access to investment, which may be even more difficult with the current economic uncertainty.

“For the Norwegian start-up scene as a whole, the immediate effect is of course access to capital, which is potentially more difficult for many today. In addition, rising labor costs and general inflation add to the burden for some,” Hanoa said.

“Talent mobility is likely to be somewhat limited now after a crazy period where talent retention has been quite difficult and many have sought new career opportunities elsewhere. So I’d say it’s probably a mixed picture.”

But on a more positive note, he said that if you have a start-up that has a good idea, team and execution, “good growth is still fully possible, even in difficult times.”

Investor education

One of the companies that rose to the occasion in a difficult period was the start-up Fygi, which was launched during the COVID-19 pandemic.

The retail company offers a secure scan-pay-go system for self-service purchases that can be made using the retailer’s QR code. This can benefit both retailers and buyers.

Although the idea was born in Norway, the company also has offices in Poland and Germany, which it needs to scale and survive.

“It’s very unnatural to focus only on the home market when the whole market in Norway is too small,” said Amund Skaaden, CEO of Fygi.

“I would say Norway, Sweden, Denmark and Finland have adopted the technology much longer than, for example, Germany. So we’re learning from the German scene.”

But the company also has international partners such as Microsoft, Mastercard and Veeps, and this is an area where it expects to fully develop

“As a tech company, we need to educate investors. If you farm fish on the west coast of Norway, you don’t need to educate investors. They know every detail of this trade,” he said, adding that pitching must be done at a high level because “when you go into detail, you lose people.”

“I would say we are looking for investment or money for something that is not so common in this country. I would say that is one of the problems.”

How Europe could accelerate

Despite the fact that Norwegian investors need more arguments, the international appetite for Norwegian tech start-ups is growing.

“We are talking to a lot of international investors now and we see a lot of interest in Scandinavia,” said Maria Grimstad de Perlinghi, a partner at Norselab, a fund that focuses on impact technologies and works with international investors.

“We also see that despite the global market downturn, there is no sign of this development in Scandinavia slowing down,” she added.

But Grimstad de Perlinghi is concerned that international markets, especially in the US, are swallowing up Norwegian start-ups. He argues that the European industrial ecosystem also needs to start taking a serious look at start-ups and asking itself if there is a better way to make acquisitions.

“I think we can produce very good companies. And I think that the larger ecosystem in Europe must equally develop the next owners of these companies, instead of waiting for the Americans to take them over,” she said.

Norwegian quality

Lise Fulland, investment partner of the Norwegian incubator Startuplab.

But the lack of funds available may also be due to the nature of Norwegians, which means they may have difficulty selling their services or asking for investment internationally.

“I think there is something good and charming about the Norwegian way. So when they say something, it’s actually true, and it’s probably even better than what they say,” she said.

“If you want to compete with other ways to market your product, I don’t want us to lose that Norwegian quality, but maybe you need to be a little bolder and a little less Norwegian on the commercial side.”

As with most countries, Norway is trying to attract foreign talent to develop its tech ecosystem. Although it is reportedly one of the most expensive countries in the world to live in, wages are much higher than in Western Europe – as is the standard of living.

Over the past 20 years, Oslo’s population has grown by 35 percent and is now over 800,000. This number has also increased during the COVID-19 pandemic.

“During the pandemic, there was an increase in interest in Oslo, Norway from people who wanted to be closer to nature,” said Siw Andersen, CEO of Oslo Business Region, an organization that supports Norwegian start-ups and aims to attract international founders.

“And I would say that although the capital is also very vibrant with cultural life, it is also close to nature.”

From Oslo, you can actually leave the city by train in 20 minutes and find a cross-country ski trail.

Supporting women in the workplace

But the country has also created an environment where women can thrive in the workplace, with the possibility of joint paid maternity and paternity for up to a year.

Andersen says that in Norway, this and other initiatives allow women to reconcile career and family.

“I’m not saying it’s special, but you have free kindergarten, you have free school. Working life, here in Norway you work eight hours. You are not expected to work 24 hours.”

Another way of doing business in a different way is instead of having a top-down hierarchy in the workplace, it’s more of a horizontal structure.

Andersen said that unlike many companies in Europe, there is a “soft side” to the workplace where employees are welcome and are not afraid to share ideas and go to the CEO’s office.

An “unmatched” way of life

One company that started in Germany but later opened an office in Norway is Promon, a company that keeps your apps and phone safe from threats.

“Looking outward has been an integral part from day one, as the Nordic region or Norway is too small a domestic market to support big growth ambitions,” said Gustaf Sahlman, CEO of Promon.

While it also has offices in Asia-Pacific, India and the United States, the company has retained its Norwegian roots.

“We have taken a lot from Scandinavian heritage and believe that as the world becomes mobile, this is a transformative technology. To run a mobile strategy that respects customer integrity, you need this type of technology,” said Sahlman.

In addition to the Norwegian work model, talent is also attracted to the country’s high living standards.

Compared to working and living in America, it’s “incomparable,” said Thomas Ford, Promon’s director of marketing and communications, who is originally from the United States but moved to Oslo.

“When you think about family and you think about where you want to have a good work-life balance … Norway really wins, especially over the United States,” he said.

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