#6 startups and scaleups to watch
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The success of Swedish startups such as Tink and Spotify has turned the capital city into a world-renowned tech hub, attracting the attention of international investors — and for good reason.
Stockholm is home to nearly 3,000 startups and scaleups, and counts 208 VC investors and 101,000 tech employees.
The city has also bred more tech unicorns per capita than any other region in the world except for Silicon Valley — that is, 0.8 per 100,000 inhabitants. Some of those unicorns include the buy-now-pay-later fintech firm Klarna, lithium-ion battery developer Northvolt, and e-mobility provider Voi.
Stockholm’s fertile landscape reflects Sweden’s overall growth in the tech sector. Last year alone, the Nordic nation not only retained its place as the EU’s best-performing innovation leader, but also emerged as Europe’s fourth top ranking country in VC funding per capita, reaching $540 (€504).
To get a closer look at the city’s thriving ecosystem, we’re zooming in on six trailblazing local startups and scaleups.
Let’s dive in.
Exeger
Founded in 2009 by Giovanni Fili, the Swedish deeptech scaleup has developed a unique solar cell, Powerfoyle, which can be seamlessly integrated into existing devices and convert all forms of light to virtually endless energy.
Unlike typical solar cells, Powerfoyle is a silicon-free technology, and thanks to a special dye, it absorbs indoor and outdoor light through a process called artificial photosynthesis.
For Fili, who has a multi-year background in entrepreneurship and the commercialisation of high-tech innovations, looking into the everyday applications of solar power was a natural step.
“We realised after a few years that this had a huge potential because we can screen print this solar cell, which allows a free-form design with different shapes, colors, and textures,” Fili tells me.
Now, 14 years later, Exeger has raised over €180 million across 12 funding rounds, counts more than 200 employees, and owns two solar-cell factories in Stockholm.
Currently, the Powerfoyle is integrated into a range of products, from bike helmets and remotes to headphones such as the Urbanista Los Angeles, the Urbanista Phoenix, and the Adidas RPT-02 Sol.
According to Fili, it’s all about providing consumers with energy independence, while also increasing product sustainability and reducing battery or cable waste.
For Exeger, Powerfoyle’s flexibility and customisable nature means the sky is the limit. The company recently secured a partnership with SES-imagotag to provide an alternative source of power to the electronic labels and IoT devices the company supplies to retailers. The scaleup envisions further applications for its technology in consumer electronics, IoT, and smart workplaces.
Sesamy
Sesamy was co-founded in 2021 by Måns Ulvestam, Karl Rosander, and Markus Ahlstrand — the same trio that founded Acast, the global podcast giant.
Sesamy also operates in the digital media realm, but with a focus on news and magazine content. The company targets publishers who want to offer their readers an option to purchase a single article as a complement to subscriptions.
“Our mission is to enable people to actually pay for good quality journalism, while helping publishers increase their incremental revenue,” Ulvestam tells me. And based on the company’s data, consumers are willing to pay on average €2 per article.
In case a reader purchases three or four articles from the same outlet, Sesamy’s Smart Software can identify whether it would cost them less to become a subscriber and prompts them accordingly, driving further engagement. “Some of the data we have so far are very encouraging; 5.5% of the readers buying a single-purchase article then become subscribers,” Ulvestam notes.
The startup counts eight publisher partners so far, boasting three big Swedish outlets: Breakit, Kvartal, and Nyheter24. Currently, Sweden is the company’s focus market, being “at the forefront when it comes to thinking about how to monetize news,” co-founder Karl Rosander says. Nevertheless, Sesamy is looking into expanding into other European countries as well.
Sesamy’s current business focus is to engage with as many outlets as possible in order to collect enough data on publisher revenue and consumer behaviour and thereby further develop its software — and, in time, for instance, suggest dynamic pricing based on the articles’ length, exclusivity, etc.
Apart from the pay-per-article option, the startup’s software platform offers various interchangeable web components including the integration of services such as payment methods, third-party webhooks, and social media login.
In November, Sesamy raised €3.3 million during its second seed round, bring its total to €7.3 million.
X Shore
The award-winning electric boat manufacturer aims to facilitate the transition to maritime emobility by combining Scandinavian design with technology, innovation, and sustainability.
The startup was founded in 2016 by one of Sweden’s best-known entrepreneurs, Konrad Bergström, but has been reinvented since 2019, when Jenny Keisu took over as CEO.
For Keisu, who has an extensive background in business law and impact investing, achieving price parity with fossil fuel-powered boats while offering high-performance vessels is key to the industry’s net-zero transition. And that’s what X Shore set out to do.
In September 2022, the company launched its second model, the X Shore 1, following the release of its first commercial boat, the Eelex 8000, in 2020. Both models come with a modular design for increased functionality and can be configured with various layouts that accommodate activities from fishing and diving to watersports and socialising — thus reducing the need for multiple boat ownership.
X Shore’s vessels also feature smart boating capabilities, including overboard detection, navigation, and range estimate. This is combined with a respective app and a special captain’s watch — a smart watch which can be used as a remote key to unlock the boat and as a “person over board” detector.
Compared to the Eelex 8000, which costs a little over €300,000, the X Shore 1’s price starts at €99,000 — the average cost of a vessel in its category. “Within 48 hours after its launch, we sold out all boats that we could produce in the first half of this year, and we’re also sold out for 2023,” Keisu explains.
Driving down the price enough to engage with a larger customer base — while maintaining sustainability — was the result of two factors: an EV-oriented design from the outset and in-house production.
The startup manufactures the hull and does the assembly using largely automated processes at its factory in the city of Nyköping, which leaves only the battery and electrical components to be sourced overseas.
X Shore sells its boats in Europe and North America, which currently represents its bigger market. For operators of multiple vessels, it also offers a Fleet Management System for connected X Shore boats. The startup raised almost €50 million in its latest funding round.
Alight
Alight is a leading Nordic provider of solar power-as-a-service, co-founded in 2013 by Dr Harald Overholm, Richard Nicolin, and Wilhelm Lowenhielm. The scaleup develops, owns, and operates solar projects for businesses that want to switch to renewable energy.
Alight helps companies cover their energy needs either with offsite installations in the form of solar farms, or with onsite installations of panels on rooftops, parking lots, or unused land. The scaleup provides energy through Power Purchase Agreements (PPAs) — fixed term contracts at a pre-negotiated price lasting between 10 and 20 years.
The company’s decision to focus on commercial solar stems from two reasons, according to co-founder and CEO Dr Harald Overholm. First comes the fact that 70% of power worldwide is used by companies. Second, the trio was inspired by the US market, where solar-as-a-service first got traction in the commercial and industrial segment, and shortly after in the residential.
“We had some sort of base hypothesis that commercial solar was a pretty good place to start,” Overholm says. “And we think that the European market is now moving very quickly towards us because government incentives are being rapidly scaled down.”
Alight is developing more than 1 gigawatt (GW) worth of PPA-based projects across Sweden, with a further 170 megawatts (MW) under development across the rest of Europe. It also handles Sweden’s largest operational solar park to date, and is set to have an installed capacity of at least 5GW by 2030. Some of its clients include Toyota, Swedbank, and trading company Bixia.
But the road to success has been no bed of roses.
“People could not understand why we started the company when we did so,” Overholm explains. “And it was also horribly difficult to find investors,” he adds, citing a lack of interest in impact and sustainability projects at the time.
“So when, in 2022, we raised €150 million in equity, with an additional €20 million to €30 million coming in [from] buying out secondaries from previous investors, it was insane.”
Prior to that the company had done two funding rounds — following an initial angel capital injection — raising €2 million in 2015 and €5 million to €6 million in 2019.
Now, Alight is also developing co-located battery storage to mitigate solar power’s intermittent nature and enable its further rollout.
Milkywire
At the age of 31, marketing veteran Nina Siemiatkowski decided to pursue photography in Kenya, where she witnessed first-hand the hurdles local organisations were facing to secure funding and resources in their efforts to address pressing environmental issues.
Siemiatkowski decided to build a company that solves this problem and founded Milkywire in 2018.
The startup provides a smarter and more efficient solution to environmental, cause-driven donation, connecting vetted impact organisations around the world with companies and individuals who want to offer support, but are unsure how to donate effectively.
‘Initially, when I founded Milkywire, the idea was to connect the platform to consumers directly,” Siemiatkowski tells me. “But a year and a half ago we completely pivoted as a business.” Since then, the startup has been implementing a B2B2C business model.
Milkywire’s platform enables companies to take responsibility for their environmental footprint and make a positive contribution by financing high-impact initiatives beyond their immediate value chain. Businesses can select organisations from five different causes, such as wildlife and climate transformation.
The platform also offers transparent and traceable reporting of the companies’ donations and impact metrics, which can be used to engage stakeholders and customers. To facilitate that, Milkyware provides integrated tools that enable customers to contribute to the same causes.
The startup currently counts numerous partner companies, including Klarna, PANGAIA, and Footway. To date, it has raised $25 million (€23.5 million) in donations.
“The timing couldn’t be better for us,” Siemiatkowski says. “There’s massive demand for sustainability solutions and, from what I know, we’re sitting with a quite unique solution.”
Doconomy
Founded in 2018 by Mathias Wikström and Johan Pihl, Doconomy has merged climate tech with fintech, and is on a mission to help banks, brands, and consumers to better understand their environmental footprint through financial transactions.
Since launching the world’s first transaction-based footprint calculator, Doconomy has been building a global ecosystem, with its technology used by Mastercard and world leading banks such as BNP Paribas and Nordea — which translates to over 850 million potential end-users across 30 countries.
Driven by the aim to inspire consumer behaviour change and encourage them into a more sustainable lifestyle, the founding duo was interested in the credit card as an everyday tool that’s connected to consumption patterns.
“We looked at how environmental data could be presented in a tool that you’re willing to use every day, and that, in the end, would motivate behavioural change,” Pihl tells me.
The result was Doconomy’s core solution, a cloud-based environmental impact index (Åland Index), which enables CO2 and H2O calculations for all digital financial transactions.
The Åland Index is complemented by a set of other digital tools, such as the Lifestyle Impact Calculator, helping individuals assess their footprint based on lifestyle choices, and the Product Impact calculator, which enables brands to calculate their products’ CO2 footprints. The startup also offers the DO mobile banking service, which allows consumers to manage their finances and everyday climate action.
Thanks to its data and the ecosystem it’s built, Doconomy has created a standardised language around how impact is measured. But using this language to drive consumer engagement and, in the end, behavioural change, remains “as tricky as ever,” co-founder Mathias Wikström says.
Doconomy is now focusing on achieving exactly this and believes that its recent acquisition of financial well-being fintech startup Dreams Technology will play an integral role in that objective.
What’s the secret to Stockholm’s success?
Stockholm has several unique and powerful ingredients that stimulate startup growth.
For Alight’s co-founder Harald Overholm, the city breeds a culture of entrepreneurship, while a strong network of entrepreneurs, mentors, and angel investors can provide guidance.
The collaboration and advice of like-minded entrepreneurs and expertswas also pointed out by Milywire’s founder, Nina Siemiatkowski, and Sesamy’s co-founder, Karl Rosander, who also added access to capital as an important element of the ecosystem.
“I think collaboration is closer at hand in Sweden than in many different markets,” Mathias Wikström, Doconomy’s co-founder and CEO, says. “There’s a strong social security network, a strong trade labour union, [and] a strong industry and trade labour union agreement dating back to the 40s and 50s. We’re not keeping our success close to our chest. We’re rather sharing it with many, I think slightly more than in other parts of the world.”
Swedish mentality plays a vital role for Johan Ekelin and Christian Ihre — co-founders of Lynxeye, a Stockholm-based strategy consultancy supporting companies in transformative shifts, which has been part of the ecosystem since 1999.
“We’re a bit of a caring nation, you could say, with a more human-centric mentality,” Ekelin tells me. “We want to find solutions to problems, and we try to democratise the offerings, and that’s good for innovation,” he notes, adding that Sweden is characterised by “a high level of social consensus.”
This, according to Ihre, stems from a simplistic survival instinct, the need to “stick together,” due to the country’s weather and climate conditions. Much like the Vikings created their own infrastructure webs and ecosystems, modern society has another kind of ecosystem, where companies, institutions, government, and people know they need each other to survive. “This has transcended our culture for millennia,” Ihre notes.
But this doesn’t mean that Sweden’s business sector is closed within itself. On the contrary, Ekelin believes that creating international brands and companies is one of its biggest strengths.
“Being a small country means that there’s a small home market, so you have to look openly for other opportunities around the world and be informed about what’s going on outside of Sweden.”
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