Despite its modest size, Denmark is home to a number of internationally renowned companies, such as Unity Technologies and Just Eat. Its capital, Copenhagen, has also become something of a safe haven for tech startups with similar global ambitions.
The city’s ecosystem benefits from having everything on its doorstep, much as Stockholm has evolved off the back of companies such as Spotify over the past decade. Startups’ success in Copenhagen has inspired new waves of innovators, which has paved the way for investors and facilitators to rise up, culminating in even more startup success.
“Copenhagen is now home to a rising number of accelerators, incubators, co-working spaces and investment funds,” said Thomas Horsted, chief operating officer at Tiimo, which provides structure and visual guidance to more than 1,200 people affected by attention deficit hyperactivity disorder (ADHD) and autism through a web platform and app for life management.
“The Tiimo concept was part of our co-founders’ master’s thesis at the IT University of Copenhagen and, following positive feedback, they joined an incubator in the city called Thinkubator,” he added.
Tiimo was subsequently provided with office facilities, mentorship and its first investment, and is now a prime example of how Copenhagen is perfectly geared up to encourage a startup journey from concept to fruition.
“Copenhagen is home to an amazing startup scene, with plenty of events, activities and opportunities for those who currently have a startup or wish to join one,” said Horsted. “You will easily find all the resources you need, including what the universities have to offer, which co-working spaces to house your firm at, or which meetups to explore, no matter where you’re channelling your tech. There are also lots of online resources available, as well as online job hubs.”
Another company to capitalise on Copenhagen’s lucrative network and business infrastructure is Reach Physio. The physiotherapy app is attracting more than 6,000 users a month, less than two years after its inception. The startup’s CEO and co-founder, James Read, is from the UK, but has attributed Copenhagen’s “closeness” – compared with, say, London – as a positive differentiator.
“Copenhagen is home to an amazing startup scene, with plenty of events, activities and opportunities for those who currently have a startup or wish to join one. You will easily find all the resources you need”
Thomas Horsted, Tiimo
“It’s a very creative and young city, with a culture where people can express themselves and go after their dreams,” he said. “I think that makes for a lot of creative energy, collaboration and exploration, and so there is a higher proportion of people who are suited to early startup experiences.”
Simplifying challenges
Read identifies Copenhagen’s investment in education and knowledge, its “creative energy” and its drive for consistently high standards as three important characteristics of the city. Then there are its notions of entrepreneurship, government backing, and openness to diversity and inclusion.
“Essentially, Copenhagen simplifies a lot of the typical challenges that a startup might face,” said Patrick Borre, CEO of Billetto, an event ticketing service that already handles five currencies, 11 languages and more than 7.8 million site visitors.
“In 2019, our traffic is expected to generate one million transactions, and this quick rise would not have been possible if it wasn’t as easy as it is to start out and register as a business here in Copenhagen. It’s easy to find and recruit highly educated employees and it’s easy to appeal to international investors who are keen to finance Copenhagen startups.”
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Denmark’s capital offers a subtle but significant difference from startups coming out of Sweden, and especially Stockholm, which have traditionally emphasised the importance of branching out from their home base to seek traction overseas. Copenhagen’s accommodation of startups has led to an ecosystem more akin to lifestyle than business.
Tiimo’s Horsted added: “Given our flexible schedules and lighter working hours, it comes as no surprise that the Danish workforce is one of the most happy and productive in Europe, and although the cost of living and taxes are high, so too is the standard of living.
“At the heart of the city – or the country, for that matter – is hygge, the Danish concept of cosiness and wellbeing, and its presence in Copenhagen is palpable. It all makes for an open and collaborative work culture here. We like to take an interest in working together and sharing tips and tricks with each other, because it benefits everyone.”
Balancing out a ‘legacy mindset’
But although Copenhagen offers an ideal climate for startups to get off the ground and achieve viability, its insular nature does have its downside. Despite being a logistical dream, having everyone and everything within walking distance of your budding business results in keener competition, heightened expectations, and an environment that benefits investors as much as it does the young companies themselves.
“Copenhagen’s suitability for startups is great for most facets, and I feel there is a lot of momentum and initiative here to make it easier to start a business,” said Reach Physio’s Read. “However, one legacy that I and other CEOs have noticed is that Danish investors continue to benefit from a closed and uncompetitive environment, especially for early money.
“So their expectations of the traction they want to see and the equity they want to take is misaligned with the rest of Europe, and this is restrictive to building a high-growth business and the investment journey it requires.”
Read said Reach Physio was fortunate in finding an investor and partner that did not have this “legacy mindset”, but there is valid concern over Copenhagen’s internal competitiveness, which also applies to the talent pool.
“There is a very educated workforce here, but there are not loads of people on the market, especially engineers and designers,” he said. “It’s also more expensive to hire. That said, you pay for quality, and the workers are more effective, so there are pros and cons to it all. If you are doing something meaningful and are creating an environment that allows people to do their best work, then you’ll get good people.”
