Lifting the lid on Norway’s tech success
Every year we co-host the Oslo Tech Excursion with our friends at SNÖ Ventures. It’s our chance to invite the wider world into the exciting and emerging Norwegian tech ecosystem.
While the event has been on pause during the pandemic, the ecosystem has continued to go from strength to strength, with talent, companies, innovation and investors all flocking to Norway.
So ahead of this year’s Oslo Tech Excursion, we asked a panel of experts at the heart of the ecosystem to share the secrets of the country’s success and consider what the future holds for this emerging international tech powerhouse.
- Anders Kvåle – Co-Founder of AI software company Spacemaker
- Bård Anders Kasin – Founder and CEO of the world’s first hybrid games platform, PortalOne
- Johan Gjesdahl – Managing Partner at Nordic early-stage venture firm Alliance Venture
- John Markus Lervik – Co-Founder of Norway’s first unicorn, Cognite
- Kjetil Holmefjord – Former partner at StartupLab Oslo and author of On Norwegian Tech
- Ronny Vikdal – Investment Director at Government-backed venture company Investinor
- Teodor Bjerrang – Founding Partner at Oslo-headquartered VC firm SNÖ Ventures
How is Norway’s tech ecosystem performing today?
Gjesdahl: We’re seeing strong momentum, with four unicorns emerging in the past 12 months, as well as robotics firm Autostore’s recent listing at a decacorn valuation.
Kvåle: The ecosystem has made big leaps in recent times. Access to capital has improved significantly, and most importantly, the accessible talent pool has expanded vastly.
Bjerrang: I think the key here is that Norway is now on the radar of more international investors, meaning there’s more access to capital, networks, and more opportunities for our startups to scale.
Does Norway have a history of tech innovation, or is this a more recent development?
Kasin: Norway has always been at the forefront of technology, but historically this culture of innovation has been tied to oil and gas. What’s happening now is that our knowledge of high-end tech is trickling into other industries.
Lervik: Norway has a unique ability to combine industrial domain expertise with world-class software competence. Today, we’re seeing Norway building on these strengths to attract talent and nurture exciting companies.
Holmefjord: When the dot-com bubble burst, the focus shifted back towards oil and gas, and a lot of entrepreneurs moved into subsea activities rather than starting tech companies. But the competency was always there, and it’s encouraging to see the country back into tech.
Why is Norway suddenly attracting so much attention from international investors?
Bjerrang: We’ve been inviting investors to Oslo for many years, but it’s only now that they’re really opening their eyes to the opportunity. In part, it’s because we have more evidence that it’s possible to scale and grow in Norway. But I think it’s also because Covid and the digitisation of everything have changed international investors’ mentality – they’re starting to see the world smaller.
Kasin: 20 years ago, it was incredibly difficult to build a successful global startup out of Norway. You had to be in Palo Alto to get in front of the international investment community. But in the post-Covid world, it’s less important where you’re from. Everyone lives on Zoom these days!
Vikdal: When Investinor was founded in 2009, one of the objectives was to increase the amount of Government investment in new industries – on fully commercial terms – in order to stimulate more private capital into the ecosystem. There’s no doubt in our minds that this strategy has paid off, but there are other facets to the ecosystem that account for its current strong performance. For example, the Norwegian authorities have consistently prioritised innovation and skills development. Our universities have increased focus on entrepreneurship. Innovation Norway has been strengthened and expanded. It’s been a holistic effort.
How would you describe the mindset of a typical Norwegian entrepreneur?
Kasin: Norwegian entrepreneurs are drawn to solving very big problems. We’re used to this from our past experiences in huge industries, where companies had to tackle things that were considered impossible. For example, my home town is where they invented artificial fertiliser and where Norsk Hydro was founded.Solving complex challenges is in our nature.
Vikdal: Perhaps our founders are also more considered in their approach. There’s a saying in Norway that we build companies brick by brick. In a tech context, this means that before you launch, you have to have good, verified technology. There are clear strengths to this mindset, although founders have to be wary of spending too long in development before going out to market.
What makes Norway an attractive place for founders?
Lervik: We have a strong and stable economy, a well-educated workforce, a high degree of digital readiness and transparency, and a commitment to the energy transition. These factors combined make Norway the perfect storm for startup leadership.
Kasin: There are also strong tax incentives for R&D and tech development in Norway, including 30% rebates on anything you develop. And our State-backed funding institutions are surprisingly accessible to founders at an early stage.
Vikdal: I think our culture of togetherness resonates strongly with today’s startup mentality. We’re used to flat organisational hierarchies, and we take a collaborative approach to problem-solving.
Bjerrang: There’s a historical narrative that our high quality of life creates too much comfort and a culture of risk-aversion amongst founders. But we view this differently, and see plenty of evidence to the contrary. The Norwegian political, economic and cultural infrastructure provides a foundation for incubation, launch and growth, giving founders the necessary resources – and setting in which – to thrive.
What do you think would encourage more entrepreneurship in Norway?
Lervik: As the energy industry scales renewables, we should amplify the digital readiness and AI expertise that our tech ecosystem offers from day one. Europe’s move to become more energy independent accelerates and adds to the urgency of this transition. We need to be the best at telling our story of why Norway is the right choice for top talent globally and include software’s key role in the energy transition as a motivating factor.
Holmefjord: We should be looking to strike a better balance in terms of risk versus stability. Too few companies die, and too many founders still go for the local maximum rather than pushing for the global maximum. So while it’s great that the State works so hard to protect our startups, we have to ensure it doesn’t slow them down and cause them to miss out on the biggest rewards.
Kasin: I think a growing number of founders are also afraid of gaining high valuations before they’re generating enough income to cover their tax bills, leaving them no choice but to keep issuing shares to pay the Government’s wealth tax. To encourage more entrepreneurship, this situation needs a rethink – particularly as our startups achieve higher and higher valuations.
Kvåle: The biggest positive here is that the size of our tech ecosystem is now at a magnitude where we will start to see a real compounding of knowledge amongst founders. There will be more and more second-time founders, as well as new founders emerging from successful startup journeys.
Bjerrang: As Norway produces more successes, talent will get recycled within the ecosystem, with founders sharing knowledge and networks and some becoming investors in their own right.
How is the global tech talent shortage affecting Norwegian startups?
Gjesdahl: The biggest barrier to growth right now is hiring the right talent. Many of our startups are struggling in this regard and they’re increasingly looking to the Government to make it easier to hire from outside the EU.
Kvåle: We need to figure out how to deliver a ten-fold increase in the number of software developers. We should be considering every option here – from incentives to attract overseas developers, to creating alternative educational programmes that bring more wannabe developers up to trainee level. I see this as a critical element in developing Norway’s competitive position for the coming decades.
Lervik: Norway’s visa and immigration systems could be further simplified and improved, and I’d also like to see improved opportunities to incentivise employees using equity and options – not just for smaller companies but for all Norwegian businesses.
Holmefjord: Historically, it’s been very hard to grant share options in Norway. Compensation is very skewed in favour of the founders, and this can limit growth because the founders can’t get the smartest people to join at an early stage. Thankfully, the Government is slowly relaxing its grip on the stock option scheme rules, and this will help incentivise the creation of strong leadership teams.
Finally, what does the future hold for Norway’s tech ecosystem?
Gjesdahl: We’re going to see more diversification, breadth and depth within the ecosystem. Companies are being built in all types of sectors – from aquatech to crypto – and we’re benefiting from second and third-generation founders who know the playbook and have the scaling experience from the outset. This means continued acceleration – providing we can access sufficient talent.
Lervik: As more companies ‘graduate’ and make it into big leagues (IPO, M&A), talent will flow back into the ecosystem – as we’ve seen in Sweden – and found new companies, creating a fascinating flywheel effect.
Kasin: We’re already starting to see an assembly line of successful startups. There’s no reason why we can’t build on this achievement, as long as the incentives are right and the tax system matures along with the maturity of the founders.
Vikdal: If we carry on strengthening the conditions allowing startups to flourish, I’ve no doubt that the investment will continue to flow, entrepreneurs will thrive and many more unicorns will emerge.
Oslo Tech Excursion is a one-day event created and hosted by SNÖ and Concentric. To register your interest in attending, please visit: https://www.techexcursion.com/