The year 2023 truly marks a milestone in the innovation history of Iceland. At the beginning of the year, news broke that the pharmaceutical company Oculis, which is based on decades of research at the University of Iceland, had been listed on the Nasdaq stock exchange in New York, becoming the first startup from an Icelandic university to be publicly traded.
This summer, even bigger news arrived when the healthcare technology company Kerecis was sold to the Danish medical company Coloplast for 1.3 billion US dollars, thus becoming the first unicorn in Iceland's history. Overnight, this innovative company with roots in Ísafjörður became more valuable than Eimskip and Icelandair combined.
These success stories clearly demonstrate how crucial innovation is for the Icelandic economy and how much value can be found in Icelandic ingenuity; ingenuity that Áslaug Arna Sigurbjörnsdóttir, the Minister of Innovation, is committed to making the largest export sector in Iceland in the future.
However, for innovation to thrive, to increase the chances of more Icelandic startups growing globally, for more Icelandic unicorns to be born, and for Áslaug Arna's dreams to come true, the supportive environment for innovation in Iceland needs to be strong.
KLAK-Icelandic Startups plays a key role in this. The company has supported Icelandic innovation for nearly two decades and becomes more powerful with each passing year.
KLAK supports 70-80 startups per year through numerous accelerators, workshops, and events it hosts with the main objective of promoting the advancement of startups by all available means.
All of this service is free of charge to entrepreneurs and startups and is funded by strong backers who see value in supporting Icelandic innovation. In 2022, KLAK's backers contributed approximately 160 million ISK in operating funds to enable the company to provide its services at no cost. The startups that benefited from KLAK's services in 2022 have subsequently raised over a billion ISK from grant funds and professional investors following their participation in KLAK’s accelerators and workshops, thus yielding over six times the return on training investments for these startups.
One of KLAK’s flagship initiatives is the entrepreneur competition Gulleggið, which the company has held 16 times since 2008. The goal of the competition is to expand the entrepreneurial community in Iceland and increase knowledge of innovation. Many of the country's most promising companies have taken their first steps there, including Controlant, Meniga, and Atmonia, which won the Innovation Awards from Samorka in 2023. Gulleggið added yet another feather to its cap this autumn when Pay Analytics, which won Gulleggið in 2016, then just an idea in its infancy, won the Innovation Awards of Iceland 2023.
But it’s not just money that flows into the Icelandic economy when Icelandic startups expand internationally, are sold, or go public. The entrepreneurs who build these startups accumulate extensive experience and knowledge that directly benefits the innovation community. This experience and knowledge must be leveraged to benefit the next generation of startups.
Over the years, KLAK has enlisted experienced entrepreneurs and specialists to mentor the startups participating in KLAK projects. This KLAK service was further strengthened in 2022 when KLAK signed a partnership agreement with MIT in the United States, which has systematically utilized mentoring services to assist entrepreneurs for the past 20 years. This year marked an important milestone in KLAK-Icelandic Startups' history when 126 experienced Icelandic entrepreneurs, specialists, and executives from the strongest companies in the country received training from MIT specialists and subsequently joined KLAK’s newly established mentoring service. These individuals are prepared to share their experiences and leverage their connections to expedite the journeys of the startups. This year, KLAK’s mentoring service has organized over three hundred mentor meetings where two to four mentors come together to form a kind of advisory council and meet with startups up to six times in connection with KLAK projects. This innovation has proven to be very effective.
The importance of innovation has long been recognized, but in recent decades, the power of innovation has become even clearer as we witness traditional value chains collapse, see conservative companies wither, and brand-new ones seize the opportunities that arise, thus generating tremendous value. We do not want all such opportunities to be captured by foreign innovative companies. We need, more than ever, to promote domestic innovation and assist startups in expanding internationally. After the successes of this year, it should be clear to everyone that we can do this, and in doing so, we can secure the key to the living standards of the nation for all time.
