Denmark and Copenhagen: A Rising Hub for European Startups

Despite not always being the first location considered, Denmark and its capital, Copenhagen, are cultivating a dynamic tech ecosystem. This burgeoning scene hosts several noteworthy startup conferences, and the appeal of visiting Copenhagen itself is undeniable.

The city provides a strong foundation for new businesses. A well-educated workforce, leading universities, comprehensive healthcare, and efficient transportation links throughout Europe contribute to its attractiveness.

Investor Interests in the Danish Tech Scene

Our research among investors revealed key areas of focus. These included sustainable supply chain logistics, the rapidly growing esports and gaming industries, enterprise SaaS solutions, climate technology, advanced deep tech hardware, agritech, and edtech.

Furthermore, many investors expressed significant interest in the evolving future of work and the shift towards innovative working methodologies.

Several companies garnered particular attention from investors. These included Afresh Technologies, Seaborg Technologies – a pioneer in nuclear reactor development – Labster, which provides virtual science labs, Normative.io focused on measuring social and environmental impact, and DEMI, a platform for connecting with culinary professionals.

Investment Trends and Regional Expansion

Generally, investors indicated a preference for investing within their domestic markets. However, there's a growing trend of expanding investment into the “New Nordics” – encompassing both Nordic and Baltic regions.

Investment is also being directed towards established tech hubs in Europe and North America.

Signs of economic recovery are becoming apparent in digital ventures that foster strong communities. Startups that successfully adapted and generated novel business models during the pandemic, outpacing established companies, are also attracting attention.

Take advantage of a 25% discount on a 1-year Extra Crunch membership using the code EXTRAKNASE. This exclusive offer is valid for European readers and expires on April 30, 2021.

Survey Participants

The insights presented were gathered through surveys with the following individuals:

• Sara Rywe, Principal at byFounders
• Mads Hørlyck, Associate at Maersk Growth
• Henrik Møller Kristensen, Associate at Bumble Ventures
• Benjamin Ratz, Partner at Nordic Makers
• Mark Emil Hermansen, Associate at Astanor
• Eric Lagier, Managing Partner at byFounders

Sara Rywe, Principal, byFounders

Regarding investment trends, what areas currently generate the most enthusiasm for you?
My focus lies with software and technology companies, with a particular interest in the evolving landscape of the “future of work,” advancements in financial technology, and innovations within the “future of food” sector.

Could you describe your most recent and compelling investment?
We recently invested in Digitail, a software solution for veterinary practices. This addresses the increasing demands of millennial pet owners and bridges the gap between those expectations and the capabilities of current veterinary tools.

What types of startups are currently missing from the market, and what opportunities are being overlooked?
I’m eager to encounter more founders who possess truly global ambitions, particularly within the realm of “uniquely transformative” software – those capable of disrupting industries in a manner similar to Airbnb’s impact on hospitality or Uber’s on transportation. Too often, we see startups focused on incremental improvements rather than complete solutions. To all ambitious founders in the Nordic and Baltic regions: I encourage you to connect with us!

What key attributes do you seek in potential investments?
We consistently prioritize founders who demonstrate competence, a clear vision, and genuine passion, all while developing products that resonate deeply with their users. Being an industry-agnostic venture capital firm, we remain open to exploring a diverse range of opportunities.

Are there any sectors that appear oversaturated or too competitive for new entrants? What products or services cause you concern?
Currently, several areas are attracting significant attention:
Fintech: including salary advances, factoring services, and sustainability reporting and measurement tools.
Food tech: encompassing alternative proteins, specialized pet food, and solutions for food waste reduction.
Future of work: focusing on virtual offices, collaborative platforms, and productivity enhancements.
Should you choose to enter these industries, careful consideration of differentiation and team capabilities is crucial.

To what extent does your investment focus lie within your local ecosystem versus broader startup hubs? Is it more or less than 50%?
Less than 50% of our investments are concentrated locally. We actively invest throughout the Nordics and Baltics, with my personal focus encompassing Sweden, Norway, and Denmark.

What industries within your city and region appear best positioned for long-term success, and which face challenges? Which companies and founders are you particularly impressed by?
Denmark holds a strong position in sustainability and energy, benefiting from talent pools originating from companies like Vestas and DTU. The country also boasts a rich history in consumer goods, exemplified by brands such as Lego and Carlsberg, and a thriving biotech sector led by Novo Nordisk. Furthermore, software scaleups like Peakon, Pleo, and Templafy are paving the way for a new generation of Danish tech startups. I am particularly excited by Qvin, a company revolutionizing women’s healthcare through non-invasive blood testing using menstrual blood.

What advice would you give to investors considering opportunities in your city?
They should be highly optimistic! The activity in 2021 alone is indicative of the potential:
Exits: Peakon achieved a $700 million exit, and Humio a $400 million exit.
Significant Funding Rounds: Public.com secured $220 million, Vivino raised $115 million, and Labster received $60 million in funding led by Andreessen Horowitz.

Do you anticipate a growing number of founders emerging from areas outside major cities in the coming years, potentially driven by the pandemic and the rise of remote work?
To some extent, yes. We are already witnessing considerable innovation in cities like Aarhus and Odense, outside of Copenhagen.

Which investment areas appear most vulnerable to shifts in consumer and business behavior due to COVID-19, and what opportunities might startups capitalize on during these times?
The travel and hospitality industries have undoubtedly been significantly impacted by COVID-19. However, this has also spurred innovation. Within our portfolio, we’ve seen:
AeroGuest — a platform enabling a “touch-free” travel experience, streamlining booking and check-in processes.
BobW — a novel approach to sustainable travel accommodation, blending the comforts of home with the services of a hotel.

How has COVID-19 influenced your investment approach? What are the primary concerns of the founders within your portfolio, and what guidance are you providing?
COVID-19 has not fundamentally altered our investment strategy, as we remain focused on software and technology. However, we are pleased to see increased interest in sustainability and impact-driven ventures. The primary concerns of our portfolio companies revolve around volatility and uncertainty. Our advice has been to focus on scenario planning and creative problem-solving to mitigate potential negative impacts.

Are you observing positive indicators – such as revenue growth or improved retention – within your portfolio companies as they adapt to the pandemic?
Tame, one of our portfolio companies, successfully expanded its event platform to include virtual events, experiencing significant growth as a result. Corti, another portfolio company, rapidly developed a product leveraging artificial intelligence to aid in the fight against COVID-19, completing it in under four weeks. These examples demonstrate the positive outcomes achievable through product adaptation.

What recent development has instilled optimism in you?
The increasing awareness and emphasis on impact and ESG (Environmental, Social, and Governance) principles among venture capitalists is incredibly encouraging. Meaningful conversations are taking place regarding how to improve our working practices.

Who are the key individuals driving success in your local startup ecosystem – investors, founders, or other professionals – that deserve greater recognition?
Several Danish founders stand out, including:
Jakob Jønck (Simple Feast), Andreas Cleve and Lars Maaløe (Corti), Sara Naseri and Søren Therkelsen (Qvin), Niels Martin Brochner, Jarek Owczarek and Viktor Heide (Contractbook), Jacob Hansen, Esben Friis-Jensen, Jakob Storm and Christian Hansen (Cobalt).
The investor landscape is also strong, with individuals like Helle Uth, Christel Piron, Alexander Viterbo-Horten and Anders Kjær at PreSeed Ventures, and Daniel Nyvang Mariussen and his team at Bumble Ventures. Vækstfonden also plays a vital role in the Danish tech ecosystem.

Mads Hørlyck, Associate at Maersk Growth

What general investment trends currently generate the most enthusiasm for you? A primary focus lies within the realm of supply chain and logistics, with a particular emphasis on developing sustainable supply chain solutions.

Could you detail your most recent and compelling investment? Our latest investment is in Afresh Technologies, a company demonstrating significant potential.

Are there any specific startups you’d like to see emerge within the industry, or are there currently undervalued opportunities? Numerous opportunities still exist throughout the diverse segments of the supply chain. Currently, we don’t have any specific preferences regarding particular niches.

What key characteristics define your ideal next investment? We are actively seeking digital solutions designed to enhance efficiency across various components of the supply chain, encompassing both upstream and downstream operations.

Which sectors appear overly crowded, or present insurmountable competitive challenges for new startups? What product or service categories raise concerns? The freight forwarding sector in both Europe and North America is experiencing maturation, with a number of established startups already present. While the market remains substantial, success necessitates a novel approach due to its inherently low profit margins.

To what extent does your investment strategy prioritize local ecosystems versus broader startup hubs, or a global approach? Is the focus more than 50% local? Our investment focus extends little beyond Denmark, with a primary emphasis on major technology hubs in Europe and North America.

Which industries within your city and region appear poised for long-term success, or conversely, face challenges? Which companies, whether within your portfolio or not, and founders, inspire you? Companies specializing in medical technology and related support functions are demonstrating strong performance. We are particularly enthusiastic about Onomondo, a Danish company and also a part of our investment portfolio.

What advice would you offer to investors considering opportunities in your city? Consider it an emerging opportunity. Several technology hubs have been established, fostering a favorable environment supported by state-backed loans, pre-seed funding, and a robust network of angel investors.

Do you anticipate a rise in founders originating from outside major cities in the coming years, potentially driven by pandemic-related shifts and the increasing appeal of remote work? We do not foresee any substantial changes to the founder landscape in Denmark, given the country’s relatively small size.

Which of your investment areas appear most vulnerable to changes in consumer and business behavior resulting from COVID-19? What opportunities might startups capitalize on during this period? We are witnessing heightened attention towards our core investment area – supply chain and logistics – as the pandemic has underscored the critical importance of flexible and dependable supply chains. This spans supply resilience, supply chain visibility, fulfillment processes, and last-mile delivery solutions. Consumers are increasingly influential in shaping supply chain dynamics.

How has COVID-19 reshaped your investment strategy? What are the primary concerns voiced by founders within your portfolio? What guidance are you providing to these startups? A common concern is declining sales conversion rates and diminishing pipelines. Our advice, consistent with general recommendations, is to minimize costs and extend financial runway by striving for profitability to the greatest extent possible. Funding needs can then be evaluated accordingly.

Are you observing positive indicators – revenue growth, improved retention, or renewed momentum – within your portfolio as companies adapt to the pandemic? Yes, some startups have successfully leveraged their flexible and digital infrastructure to outperform established incumbents during the pandemic.

Can you share a recent event that has instilled optimism, either professionally, personally, or a combination of both? We have not yet observed a widespread wave of defaults, either globally or specifically within our investment area, or generally within Denmark.

Henrik Møller Kristensen, Partner at Bumble Ventures

Regarding investment trends, what areas currently generate the most enthusiasm?
We are particularly interested in the expansion of the digital media and entertainment sector, notably esports and gaming. Furthermore, enterprise SaaS solutions – specifically those addressing the evolving future of work – are compelling. Climate change technologies, encompassing both advanced hardware and software, also represent a key focus. Finally, we observe significant potential within e-commerce, especially with digitally native vertical brands and direct-to-consumer models.

What types of startups are currently missing from the market, and what opportunities are being overlooked?
There's a clear need for innovative products and services designed to cater to the requirements of a growing aging population. The demographic shift towards a larger elderly population will create an expanding market, demanding solutions that address their needs and alleviate societal pressures.

What key attributes do you seek in potential investments?
A strong team and demonstrable traction are paramount. We prioritize founders who possess exceptional skills in engineering, product development, and commercialization, ideally with substantial industry experience. Evidence of product-market fit is highly desirable. We favor consistent revenue growth fueled by paying customers, alongside detailed cohort analysis and predictable sales funnels that validate a sustainable core business. We generally avoid ventures still several years away from generating revenue, even if it means potentially missing out on opportunities like an early-stage Facebook.

Which sectors are becoming overly competitive, or present insurmountable barriers to entry for new startups? What product or service categories cause concern?
The traditional social media landscape is increasingly saturated, as are marketing tools within the SaaS space. Startups requiring massive user bases before achieving profitability face significant challenges.

To what extent does your investment focus prioritize local opportunities versus broader startup ecosystems? Is it more than 50% local?
We are poised to announce our inaugural investment outside of Denmark next week. This marks a deliberate expansion beyond our domestic focus, extending our reach throughout the Nordic region.

What industries within your city and region appear best positioned for long-term success, and which face challenges? Which companies and founders are particularly exciting to you?
Denmark’s medtech, fintech, gaming, and clean tech industries are exceptionally well-positioned for future growth. We are impressed by companies such as GamerzClass, Pie Systems, LeadFamly, Omnigame, Organic Basics, Capdesk, Roccamore, Too Good To Go, Pleo, Tradeshift, SYBO, and Unity. Notable founders include Victor Folmann of GamerzClass, Sunny Long of Pie Systems, Frederikke Antonie Schmidt of Roccamore, and Christian Gabriel of Capdesk.

What advice would you offer to investors considering the investment climate and opportunities in your city?
Historically, a shortage of both capital and skilled talent has prompted successful Danish startups to relocate to countries offering more favorable conditions. However, the investment environment is improving. Increased access to funding and talent are interconnected, and a key driver of this positive change is the reinvestment of capital by founders of successful Danish companies back into the local startup community.

Do you anticipate a rise in founders establishing ventures outside of major urban centers, driven by remote work and pandemic-related shifts?
The trend towards remote work is likely to continue. However, we believe that proximity to other startups, founders, advisors, and investors remains crucial for success. Building a strong network and fostering personal relationships are vital, and these are best achieved through in-person interactions.

Which of your investment areas appear most vulnerable to changes in consumer and business behavior resulting from COVID-19? What opportunities might startups capitalize on during this period?
The travel and hospitality sectors are demonstrably weaker, with a projected decline in demand due to remote work and growing sustainability concerns. Conversely, gaming, e-commerce, and digital products and services are experiencing growth as more individuals spend time online.

How has COVID-19 altered your investment approach? What are the primary concerns expressed by founders within your portfolio? What guidance are you providing to these startups?
We remain open to investment despite the challenges posed by COVID-19. While some sectors, like gaming, have benefited, many startups are facing difficulties. Our advice centers on prudent runway management, maintaining open communication with investors, cost reduction, and a willingness to adapt and pivot. We encourage startups to identify opportunities rather than focusing on limitations.

Are you observing positive indicators – such as revenue growth or improved retention – within your portfolio companies as they adapt to the pandemic?
Currently, only a limited number of our portfolio companies have been negatively impacted by COVID-19.

Can you share a recent experience that has instilled optimism?
The willingness of investors to provide new funding and support struggling portfolio companies is encouraging. Founders are demonstrating resilience and adapting to the new circumstances, often leading to innovative solutions.

Benjamin Ratz, Partner at Nordic Makers

What investment trends currently generate the most enthusiasm for you? Generally, my focus lies on energy and the shift away from fossil fuels, the evolving application of data in governance, and the transformation occurring within the education sector.

Could you describe your most recent and compelling investment? We’ve recently invested in Seaborg, a company dedicated to the development of modular, small-scale, and inherently safe nuclear reactors.

Another exciting venture is Labster, which provides immersive virtual science laboratories to students globally, fostering engagement in science and STEM fields.

Are there any specific types of startups you’d like to see emerge within the industry, or are there currently undervalued opportunities? A significant area for improvement lies within the efficiency and effectiveness of the public sector.

What key characteristics are you seeking in potential investments? We are particularly interested in perspectives regarding whether the pandemic has instigated lasting changes in global behavior.

Which sectors appear overly crowded, or present significant competitive challenges for new startups? What products or services cause you concern? The micromobility space and telehealth services (teledocs) are areas where we see increased competition.

To what extent does your investment strategy prioritize your local ecosystem versus broader startup hubs? We maintain a 100% focus on investing within our local ecosystem.

Which companies, whether within your portfolio or not, and their founders, do you find particularly inspiring? We are impressed by Willa and Corti, and the leadership driving their success.

What advice would you offer to investors in other cities regarding the investment landscape and potential opportunities in your region? Our region is experiencing a notable outflow of founders who have already achieved success.

Do you anticipate a future increase in founders originating from areas outside of major metropolitan centers? While we don’t foresee a surge from outside major cities, we do expect those cities to continue to be highly productive in generating new ventures.

Mark Emil Hermansen, Associate at Astanor

What general investment trends currently excite you? My primary focus lies within the realms of food and agrotech.

What is your most recent and compelling investment? Currently, DEMI represents our most exciting venture.

What types of startups are missing from the industry, and what overlooked opportunities exist? I am eager to encounter more food technology companies demonstrating a genuine understanding of food’s inherent human connection. Too often, the emphasis is solely on the technology, neglecting the crucial element of human-centered design.

This tendency is so widespread that it prompts caution when evaluating startups self-identifying as “food tech.” Food is fundamentally distinct from technology, and vice versa; navigating this distinction presents both a challenge and a significant opportunity. Further insights can be found in this article.

What qualities define your ideal next investment? I seek ventures that evoke the spirit of the opening lines from “On The Road”: “They danced down the streets like dingledodies, and I shambled after as I’ve been doing all my life after people who interest me, because the only people for me are the mad ones…”

…“the ones who are mad to live, mad to talk, mad to be saved, desirous of everything at the same time, the ones that never yawn or say a commonplace thing, but burn, burn, burn…”

Which areas are becoming overly competitive, or pose significant barriers to entry for new startups? What products or services cause concern? The Direct-to-Consumer, or DNVB, model is an area I am currently cautious about.

To what extent do you prioritize investments within your local ecosystem versus other startup hubs? Approximately 25% of my investments are focused locally.

While Denmark’s startup scene is still developing, the limited VC presence presents a unique opportunity for impactful investment.

Which industries in your city and region appear poised for long-term success, or face challenges? Which companies and founders are particularly promising?

• Companies: Online communities, such as DEMI.
• Founder: Erez Galonska of Infarm.

What advice would you offer to investors considering opportunities in your city? Significant potential exists for those with access to quality deal flow and established networks.

Which industry segments seem vulnerable to shifts in consumer and business behavior due to COVID-19? What opportunities might startups capitalize on during this period? Communities that extend beyond the digital realm, like Tonsser and DEMI, are proving resilient.

How has COVID-19 altered your investment strategy? What are the primary concerns of your portfolio companies, and what guidance are you providing?

• Worries: Uncertainty and challenges related to recruitment.
• Advice: Prioritize survival and strategic preparation.

Are you observing positive indicators – revenue growth, improved retention, or other momentum – within your portfolio as companies adapt to the pandemic? We are seeing success in ventures with a physical retail presence, and those fostering strong online communities.

What recent event has inspired optimism, either professionally or personally? The widespread anticipation for the post-COVID era, and the growing recognition that a return to “normal” is unlikely, is encouraging.

Who are the key individuals driving success within the local startup ecosystem?

• Kasper Ottesen, Highbridge (legal expertise).
• Kasper Hulthin (entrepreneur and investor).
• Christian Tang-Jespersen (investor).

Eric Lagier, Managing Partner, byFounders

What general investment trends currently generate the most enthusiasm for you? We are particularly interested in the evolving landscape of work and platforms designed to enhance productivity.

Recent Investment

Could you highlight your most recent and compelling investment? Our latest investment is in Normative.

Unmet Needs & Overlooked Opportunities

Are there specific types of startups you’d like to see emerge within the industry? We believe the future of recruiting represents a significant, yet currently underserved, opportunity.

Investment Criteria

What key characteristics define your ideal investment prospect? We prioritize investments in ventures led by passionate founders who are dedicated to addressing substantial challenges and contributing to a more positive future.

Geographic Focus

To what extent does your investment strategy prioritize your local ecosystem versus broader startup hubs? We maintain a strong focus on the New Nordics – encompassing both Nordic and Baltic regions – as they have demonstrated the most substantial growth potential within Europe.

Regional Industry Outlook

Which industries within your city and region appear best positioned for long-term success? Climate tech, health tech, and fintech are showing considerable promise. We are excited about companies like Normative, Corti, and Lucinity, whether within our portfolio or not.

Investment Climate in Copenhagen

How should investors from other cities perceive the investment landscape and opportunities available in your city? Copenhagen is experiencing a period of significant growth, and a robust foundation of seasoned founders is now building truly groundbreaking companies.

Decentralization of Startup Hubs

Do you anticipate a rise in founders originating from areas outside major cities? We don’t foresee a shift away from established hubs, but we do expect to see increasingly diverse teams with a strong emphasis on remote-first work models.

Impact of COVID-19 on Industries

Which industry segments within your investment portfolio appear most vulnerable to changes in consumer and business behavior due to COVID-19? We’ve observed an acceleration of online activities, remote work, e-commerce, and a generally faster pace of transactions.

COVID-19 & Investment Strategy

How has the COVID-19 pandemic influenced your investment approach? COVID-19 has acted as a powerful catalyst for future trends. Founders who have successfully adapted will be best positioned for success.

What are the primary concerns expressed by the founders within your portfolio? What advice are you currently offering to startups in your portfolio? Adaptability is key.

Portfolio Momentum

Are you observing positive indicators – such as revenue growth or improved retention rates – within your portfolio companies as they navigate the pandemic? We are seeing clear signs of positive momentum.

Sources of Optimism

Can you share a recent experience that has instilled hope, either professionally or personally? The resilience and perseverance demonstrated by founders during these times of rapid change is truly inspiring.

Local Startup Leaders

Who are the key individuals within the local startup ecosystem who are driving success? We recognize the achievements of Jakob Jønck, founder of SimpleFeast; Kristian Rönn, founder of Normative; and Andreas Cleve and Lars Maaløe, the founders of Corti.