Why This Tiny European City Is a Hotbed

For Entrepreneurship
Stockholm, Sweden, is rapidly becoming a hotbed for digital innovation. In fact, the capital
city was recently ranked the second most prolific tech hub in the world (Silicon Valley was
No. 1), according to VC firm Atomico.
At large, Sweden is home to six billion-dollar businesses, anchored by giants like Spotify,
Klarna, SoundCloud, and Skype. Stockholm alone was a runner-up for the highest percentage
exit growth in Europe, according to data recently compiled by the Global Startup Ecosystem
Index.
Sweden has long housed rich investors with experience. The caveat, though, was that it
lacked business angels who were willing to support younger companies that couldn't
land larger amounts of funding from VC firms, which hindered entrepreneurial activity.
Essentially, many saw opportunity in starting a Stockholm-based business, but very few were
inspired to actually do it, according to think tank Global Entrepreneurship Monitor.
In recent years, however, Stockholm has made massive strides in terms of economic growth.
Small businesses have become prolific creators of jobs. The city has raised its standards for
fostering new talent and implemented new regulatory systems to drive entrepreneurship. With
health care costs on the decrease, better pension plans, and tax deductions for people who
privately invest in startups, many are realizing that Stockholm has become a much safer place
to start a business.
Here's why this European city is gaining ground as a digital IT hub and hotbed for
innovation:

1. Tech-savvy talent
Sweden's recent initiatives to improve the education system have paid off substantially by
boosting Stockholm's talent pool. There are roughly 197,000 tech workers in Stockholm
alone, according to a 2014 study. That's nearly 20 percent of the work force, which is the
highest percentage of any city in Europe.
Such efforts include the push for more STEM-focused (science, technology, engineering,
mathematics) schools, and business accelerators like the Stockholm School of
Entrepreneurship and the Royal Institute of Technology. With cheap or free access to
education, students don't have to struggle with the stress of paying off university debt before
starting up.
Carl Waldekranz, 29, who co-founded the online retail marketplace Tictail in 2012, calls the
city one of the best places in the world to build a tech venture. "Free education creates this

Waldekranz and his team built out Tictail's feed algorithm. An increasingly strong and supportive VC presence Sweden's venture capital scene is growing rapidly. . When hiring. which has played a major role in cultivating new talent and increasing the drive for innovation. garden. For a platform like Tictail. "We've seen a huge growth in the number of engineering and design talent. which caters to micro-entrepreneurs and retail customers. the Sweden-based media giant Modern Times Group hired former Google employee Rikard Steiber to head up venture lab MTGx. Sweden's government has also matured by investing in subsidized personal computers and a solid broadband infrastructure. 2." Waldekranz says. Stockholm alone is home to firms such as Creandum Ventures. which generates advice to business owners as they grow their presence on the platform. you can bring on top-notch engineers in Stockholm and surrounding locations for a fraction of the cost you would pay in another area. Those savings can then be reallocated to other areas of business. with goals to support and fund small startups. the need for tech talent is crucial." Tictail is an e-commerce platform on which shoppers can browse products (home. Tictail is an e-commerce platform for micro-entrepreneurs and shoppers. he adds. which counts more than €250 million ($273 million) under management in over 20 companies. and jewelry are among the most popular categories) made by smaller. like Silicon Valley. independent retailers from across the world. all from scratch.massive talent pool. Recently.

" says investor Johan Brenner. more than half of Tictail's sales (55 percent) are executed through mobile activity. Meanwhile. Tictail is a newcomer in the tech space. U. as success stories like Klarna are upping the country's startup credibility. representing a 2 percent uptick from 2011. more established market reach. .S. "The startup is creating a platform and community to help micro-business thrive online. Though the company wouldn't disclose revenue. "having come into a market where it was already clear that mobile would be the leading platform for e-commerce in the future. At just three years old.S.000. but Tictail. by contrast. Today.S. was surprised that East Coast investors like Thrive were already aware of Tictail and its business model before it came to the U. its current estimated population is 897. the company has raised $32 million. such as Etsy and Shopify. it says that a new shopper is born every three minutes on the platform. as much as $457 million was invested in Sweden in 2013." Overall.Tictail received funding from Creandum as part of its staggering $22 million Series B funding round. Still. It's up against more vetted ecommerce retailers. according to the European Commission. "It's a huge market opportunity that has only had the surface scratched." To wit. Waldekranz. 3. Meanwhile. since it forces business owners to think globally--instead of trying to hack only the national market--in the beginning stages of building a startup." says Waldekranz. Small city. MORE: How a First-Time Entrepreneur Went Global With One Simple Idea 6 Things to Know About Doing Business in Istanbul 5 Startup Hubs of the Future--and They're Not in the U. wants to help people find niche wares from different countries. "They've been such great sounding boards for me. he insists that the company's main goal is to be mobile-friendly. announced in July. As Sweden's capital and most populous city." says Waldekranz. Waldekranz says he views Etsy to be nationally focused. Creandum sees Tictail as filling a major gap in the marketplace. which is what really sets Tictail apart from competitors. and they've helped me build up my own confidence. big advantages Stockholm is a small hub. Waldekranz notes that this is a blessing in disguise. which each have a larger. for his part. ecosystems are beginning to take notice. To date.000 emerging local designers and brands. the startup hosts 85. "We want to believe that we have a huge technology advantage over them.

S. has been outwardly oriented from the beginning.html?utm_source=facebook .inc. borders. in true Nordic form. 2015 0 + WRITE A COMMENThttp://www. Published on: Aug 7. he says that Tictail.While Waldekranz sees Etsy as going through something of an "identity crisis" as it expands beyond U.com/zoe-henry/stockholm-sweden-as-a-hotbed-forstartups.