Iceland may have a small population, but it is making waves in the world of startups and innovation. The country’s unique resources and cultural heritage have inspired entrepreneurs to think outside the box and create groundbreaking solutions.
One area where Icelandic startups are excelling is in utilizing the country’s natural resources. Kerecis, a medtech company, uses fish skin for novel wound dressings, demonstrating how unexpected sources can be repurposed for innovation. This focus on sustainability aligns with the rising support for the circular economy.
Another source of inspiration for Icelandic startups is the country’s past. Fintech companies like indó and Monerium draw lessons from the 2008 banking crisis, using technology to address vulnerabilities and reduce reliance on compromised platforms.
To support these startups, Iceland has developed a strong ecosystem that includes venture capital, accelerators, and funding programs like Horizon Europe and grants from Rannís. Additionally, downtown Reykjavík serves as a hub for entrepreneurship, with co-working spaces and creative studios attracting talent from various fields.
Iceland’s creative talent extends to its tech scene as well. Companies like Genki, Overtune, and Treble have developed music production and composition technology, while gaming giant CCP Games has inspired many Icelanders to enter the gaming industry.
As startups grow, they often face challenges due to Iceland’s small population. To overcome this limitation, some companies look abroad for AI talent or executives with scaling experience. Nasdaq-listed Oculis, Prescriby, Sidekick Health, and Avo are examples of Icelandic startups that have successfully expanded internationally.
While Iceland’s market size may not be ideal for testing go-to-market strategies, its ease of doing business and natural assets make it an attractive testing ground for foreign companies. Validation in Iceland can often apply to Europe as well due to the country’s membership in the European Economic Area.
In recent years, Iceland has gained attention in the global startup community. Bug bounty program Defend Iceland received a significant grant from the European Commission, and the NATO Innovation Fund co-hosted an event during Iceland Innovation Week. The country’s venture capital ecosystem is relatively new, with several funds emerging in the past decade.
Ultimately, Iceland’s strategic location and cultural affinity with Scandinavia and the Baltics position it as a crossroads for innovation. As its startups continue to gain recognition, we can expect to hear more about Iceland and its talented entrepreneurs.