I have recently returned from Stockholm, where I hadn’t been before but I loved it. The “Capital of Scandinavia” as it is now called, is made up of several islands connected by hundreds of bridges. You see water everywhere, the architecture is stunning and its people are arguably the most stylish in Europe. With a population of just 2 million people if we include its outskirts, this is clearly a city which stands out more than what you would expect from the size of its population.
In terms of tech companies, it is the city with the most “unicorns” outside of Silicon Valley. Unicorns are companies valued at more than US$1 billion dollars. These companies include Mojang (the company behind Minecraft), Skype, Spotify and Kiarna (B2B E-commerce).
I travelled there on vacation, not to do a thorough tour of the start-up and venture capital ecosystem, but from what I have read and heard, a few of the reasons behind Stockholm’s success are:
• Sweden has the highest average investment per company in Europe and this is the case for all financing phases. The average investment for a Series A financing is $8M. Some people say this is due to a government subsidy granted during the 90s for people to buy PCs. Everyone under the age of 35 had a computer during that period, which generated a lot of new ideas in the digital industry and a large financing ecosystem.
• English is spoken perfectly. While they do maintain Swedish, everyone speaks English and it is the official language in many of its international companies. This allows companies and their executives to consider markets that are much larger than their own while also attracting talent from other countries who can be hired and integrated quickly. Sixteen percent of Stockholm’s population is foreign.
• Education levels are also very good and accessible to everyone: primary, secondary and even university education is free and of a very high standard.
• Sweden is ranked #6 in business competitiveness and this particularly helps new companies. Sweden suffered a crisis during the 1990s due to high taxes, inflation and slow economic growth. Since then, several reforms have been carried out to maintain a balanced budget and taxes have come down.
There is clearly a lot to learn from Stockholm in terms of how to create an excellent ecosystem for technological innovation. If not for that, at least visit Stockholm to enjoy its cafes and restaurants on every corner, its parks, views and Gamla Stan (the first island on which Stockholm was founded and still one of the best preserved medieval cities).