Nordic startup scene to grow despite long-term viability concerns, analysts say

The Nordic countries have made significant contributions to the establishment of Europe’s startup landscape, and many industry experts predict that the wave will continue in the coming years — citing their robust welfare schemes, high education standards, and dynamic business practices.

Denmark, Norway, Sweden, Finland, and Iceland have long been acknowledged for their impact on innovation and entrepreneurship, which has developed steadily over the last few decades.

Policymakers in the Nordic countries have consistently bolstered emerging businesses. Their efforts involve research and development support, tax incentives, and access to capital.

Yet, there are concerns about the Nordic model’s long-term sustainability, notably for startups and new businesses seeking to expand. Some analysts, for example, raised the issue of high taxes, which can contribute to a fall in economic growth.

Therefore, numerous Nordic startups are now focusing on strengthening partnerships with established firms and leveraging their networks to gain access to new markets and customers.

Startup prospects, challenges in Nordic countries

The Nordic countries’ commonalities and proximity to each other make building meaningful collaboration and alliances easier — a vital aspect of promoting business expansion.

According to a Dealroom report, there was a drop in late-stage funding (series C+) in 2022. Conversely, early-stage held steady — with just a six percent decline compared to 2021 — and increased substantially in Norway and Iceland.

The region’s priority on entrepreneurship and innovation is expected to fuel future economic development. However, it is worth noting that startups and new businesses must work on sustainable growth, well-balanced partnerships and networking to thrive in the long run.

The Nordics provide a broad selection of cities for businesses to expand their operations, from Stockholm’s renowned startup environment to Reykjavik’s developing industry.

In Stockholm alone, countless incubators, accelerators, and venture capital firms help develop new businesses, with the city shining in three areas — fintech, gaming, and health IT.

Similarly, Copenhagen is emerging as a startup hub — particularly for biotech and life sciences firms promoting sustainability and innovation. Accelerate and Copenhagen Fintech are two of the city’s well-known incubators and accelerators.