Crowdfunding and solar power are yesterday’s news in the startup world, unless you’re TRINE. Their funding campaign garnered attention in December, and investors have followed with 5 million SEK as a result. It’s just the latest success for a Chalmers Ventures company, the startup technology arm of Chalmers University in Gothenburg, Sweden.
Gothenburg is Sweden’s second largest city, undisputedly behind Stockholm but building quite a reputation as the little city that can. Nestled in on the Swedish west coast, the city has a small town feel but cosmopolitan access far closer to Norway and Denmark than the Swedish capital. It also has a strong night life, sprawling cafes, and even a theme park.
“I do believe we have a much more, ‘Do more, talk less’ culture in Gothenburg,” Viktor Brunnegård, Chalmers School of Entrepreneurship’s (CSE) strategic brand manager, tells Geektime. “Not to say that it’s all talk in Stockholm, but we tend to not be as good at telling the world about the great companies that we are building here in Gothenburg.”
CSE and Chalmers Ventures’ “Encubation” program held their Venture Pitch competition in December, a first presentation for an audience mainly composed of fellow founders and co-incubatees. The three-month old projects did have some ears on high listening, with a few Gothenburgish angels in the audience sitting on their wings.
“At this stage the ventures are not mature enough for the bigger investors, but 6-12 months from now, they will probably be ready to take in their first external money,” he notes.
— Stina Linge (@StinaLinge) December 15, 2015
Gothenburg: spinouts with speed
Chalmers University of Technology opened CSE’s doors in 1997, then Chalmers Ventures (CV) two years later. The venture arm counted 104 companies having been under its wings through 2011 with a turnover of 558 million Swedish Krona (SEK) and 406 employees, though these numbers have most definitely changed since then. Their overall funding back then had reached a staggering 1.45 billion SEK. They’ve collected investments from Innovationsbron and regional investment company Västra Götaland. The university also recently committed to invest 300 million SEK in Chalmers Ventures over the next 10 years.
“We do work with very early-stage ideas. I think that’s one of our greatest strengths. It does mean that we start a lot of ventures that never make it, but being early allows us to work with many interesting ideas before others,” Brunnegård relays, adding that Chalmers Ventures’ goal is eventually to hand off the company to longer-term investors interested in scaling the respective businesses. “Eventually we want to leave the company and not stay on board for too long, since we want keep our focus on the early stages.”
— Stina Linge (@StinaLinge) December 15, 2015
Chalmers Ventures manages two programs — Startup Camp and Encubation — for early-stage companies. Startup Camp is a 12-team, 10-week program geared toward creation of a minimally viable product (MVP) and beginning market testing.
That being said, it’s designed for IT and web startups that can meet the 2.5-month timeframe. Encubation is a 10-team, 10-month program that pairs up School of Entrepreneurship students with innovators, circumventing the issue of business training for scientists to create companies by collaborating. Their accelerator only accepts companies with MVPs (minimum viable products) and works with companies for a relatively long 18 months.
Chalmers offers precise funding at different stages: 300,000 SEK for pre-seed projects, up to 500,000 SEK for seed-stage companies and additional follow-on funding can bring a participating company a maximum total of 1.2 million SEK. None of that is conditional on avoiding investments from outside the program. The one catch is that all companies need to have some tangible and clear connection to Gothenburg.
“I think we have quite a mix” of companies, Brunnegård chimes in. “But we do see a lot of clean and green tech companies as well as medtech companies. But of course, we also get a big share of IT startups.”
The emphasis on energy and transport is clear from Chalmers’ list of portfolio companies: Revibe Energy, Playback Energy, Simplex Motion, TRINE, Vehco, and urban water energy-siphoning startup Aqua Robur. There are also several medical projects like Traccine and Simplexia respectively working on vaccines for chlamydia and herpes, chronic back pain solution Stayble Therapeutics, cancer-detecting algorithm Smart Healthcare, and allergy-prevention solution Premune, among others.
That emphasis might not be a surprise considering the city’s mayor has a strong focus on sustainability with so-called Green Bonds available for local businesses and building projects, with the next batch coming in Q3 2016 according to the city’s Head of Cluster & Innovation, Maria Strömberg. It’s definitely a city encouraging homegrown technology. Invest Gothenburg and Green Gothenburg are also pushing for the adoption of electric cars and public transportation.
The city also plays host to HUB Gothenburg, the Brewhouse Inkubator, Sahlgrenska Science Park, Future Enterprises and Venture Cup, which hosts its own pitch competition. Chalmers University of Technology is joined by the University of Gothenburg, which has its own startup and technology initiatives and spinouts. The biggest business presence in the city though and biggest potential investor is easily Volvo, whose only other corporate ventures office is in Silicon Valley.
— Chalmers Ventures (@chalmersventure) December 10, 2015
Sweden itself is an unsung titan of the startup scene with seven unicorns (tech companies valued at more than $1 billion) that include Spotify, Mojang, Klarna, King, Skype, Avito and Soundcloud. Do you recognize iZettle and Truecaller? They are also Swedish-made. While there’s no doubt that most of the venture money and startup scene is in its eastern big brother, Gothenburg and Chalmers have more than just TRINE’S strong seed round. Maritime renewable energy company and Chalmers participant Minesto scored €5.1 million ($5.5 million) in December and is planning to enter the country’s stock exchange. Predictive analytics platform Tajitsu has also raised $1.3 million in the last three years.
All in all, this is a city to watch. Small as its footsteps have been thus far, they have all the factors in place and the right atmosphere to produce some rockstar startups soon.
“I also think that we have a very collaborative culture in Gothenburg. Being the ‘little brother’ in Sweden, we tend to work together to help each other, both between startups and the different support organizations (incubator, etc),” Brunnegård says.