Silicon Valley became a phenomenon in the tech startup arena that set a high bar and precedent in economic and business development. Since that time, other countries around the world have experienced their own booms with maturation in the number of startups springing up. Stockholm, Sweden is one such city that is showing signs of a thriving environment for new startups in the tech world. It's becoming a new hot spot for startups.
Is Stockholm Europe's equivalent of Silicon Valley?
According to Techcrunch, Stockholm is experiencing an emergence in the market for tech startups with the potential for rising to unicorn status. Although the country of Sweden has taken a laid-back approach to control the current pandemic within its borders, business activities continue to move forward. Perhaps this all-in attitude towards strengthening its economy and posturing in the global tech world has aided in its rise to finding equal ground with other European cities that lead the evolution. Berlin, Paris, and London were formerly the leaders in new tech companies on the European front, but Stockholm appears to be in a good position. It has not only caught up to these cities but has surpassed them. We've already seen Sweden produce giant unicorns including Klarna and Spotify with many others joining the ranks.
Expert opinions about Stockholm's rise during Covid-19
Investors responded to surveyors asking a variety of questions about the recent rise in Stockholm's startup success in the tech industry. The general consensus is that the pandemic has allowed many of the startups to thrive instead of shriveling from lack of business. Those that have benefited the most have been companies involved in healthcare and MedTech, Industrial Internet of Things based companies, those involved with robotics, artificial intelligence, the food industry, wellness and fitness apps, media, and the other tech-based niches that are being heavily used during public shutdowns. While travel, leisure, dining, recreational, and hospitality industries have suffered, the tech that offers solutions for individuals and businesses that are constrained are experiencing a boom in sales and subscriptions. Online gaming is another industry that is in a good position to thrive.
Stockholm offers fertile ground for innovation
According to Inc, Stockholm has been preparing for its rise in tech that has positioned it as second only to Silicon Valley. The city offers the ideal breeding ground for innovation and for new businesses in the tech world to thrive. First of all, it is a smaller city but it offers all the amenities new businesses and employees could want. The economic condition of the city is attractive to some of the best talent in the tech industry to feel comfortable establishing a new business there. With successful unicorns such as Klarna, Spotify, Skype, and SoundCloud calling the city home, investors and those hoping to launch new enterprises are more comfortable about the thriving business environment. Digital innovation is high and companies are thriving which builds investor confidence, giving new startups better opportunities to become established, expand, and thrive at the early stages of development. This is requisite for any company to make a go of it.
The downside of startups in Sweden take a turn for the better
The rich investors that are necessary to provide funding in Sweden are present, but the major problem for new startups is that there were not enough angels to take young startups in their infancy stages under their wings. VC was limited at best leaving entrepreneurs with few funding options during the critical years of business development. Fortunately, Stockholm's recent economic growth has changed the attitudes of investors. Entrepreneurship is thriving more than ever as investors and entrepreneurs are coming together with a different attitude about the city. It's a far safer place to launch a new business because of its fertility for growth and development. There is plenty of tech-savvy talent living in the city. The larger talent pool means more qualified professionals to aid in the success of a new company. Venture capital firms are more willing to back startups with good ideas that have a high likelihood of success. The VC industry is also experiencing a phase of growth in Stockholm. This is good news for entrepreneurs in search of seed and VC funding options. Although it's a small city it offers big advantages for new tech startups. Stockholm had its challenges but is doing much better in creating a suitable environment for entrepreneurs in the tech industry to take their shot.
A current snapshot of Sweden's startup scene
Study in Sweden, is a blog that discusses Sweden's startup scene and the current condition of the country concerning entrepreneurship as it stands today. We've moved past the times when investors were more skeptical about investing in starting or young companies. It seems to have shifted towards hedging bets on the best ideas with the greatest potential. The trend has switched to fast-growing startups with ample venture capital backing to get them on their feet, expanding, and thriving. Stockholm is the city that was chosen by a few of the more successful unicorns that paved the way for others to join them in making it the hotbed for startups in the country.
New regulations and tax cuts that are friendly to new startups have combined to help create a suitable environment for success. Five of the country's largest unicorns are based in the city of Stockholm. The city is also home to five out of the top ten European companies showing the fastest growth. The country of Sweden has achieved the highest level of smart-device penetration at a whopping 150%. Stockholm is home to approximately 8,000 startups. Nearly a quarter of the population in the city is employed at a company involved in the tech industry. These are statistics that appeal to those looking for a home base for the pursuit of business goals. It's no small wonder that Stockholm is close to the fame achieved by Silicon Valley in the world of the tech business.
Written by Lily Wordsmith
Read more posts by Lily Wordsmith