One in three Norwegian unicorns created in 2021 alone

The Norwegian tech sector has seen rapid growth over the past year, with the value of funding rounds doubling and three in nine of the nation’s unicorn businesses being created in 2021 alone, technology investment firm GP Bullhound has found.

According to the firm’s Norway tech update report, the late-stage fundraising of Norwegian tech companies jumped from $357m in 2020 to $783m in 2021 – although this was largely driven by large rounds from software company Gelato ($240m), industrial software-as-a-service startup Cognite ($150m) and e-commerce firm Oda ($141m).

All three firms reached unicorn status – meaning a billion-dollar valuation – in 2021 off the back of these funding rounds.

As a result of the growth, the Norwegian tech sector has raised a total of $2.2bn over the past decade, putting it in line with countries of a similar size, including Finland ($2.9bn) and Denmark ($3.6bn).

By comparison, Scandinavian neighbour Sweden, which has produced tech firms including Spotify and Klarna, has raised $10.3bn in the same time.

According to GP Bullhound, a major factor contributing to the growth of Norway’s tech ecosystem is its ability to redeploy a workforce with significant engineering and technical skills from the oil and gas sector into tech.

“Historically, the Norwegian economy has been dominated by the offshore sector,” said GP Bullhound partner Daniel Lilliehöök. “However, as the country transitions from its dependence on oil, significant local and international capital has flowed into the technology sector, capitalising on a highly educated workforce and leading to a large number of successful companies, including several unicorns.”

Analyst Gustav Nilsson added: “Norway has efficiently leveraged knowledge in legacy sectors to produce some of the most interesting European companies in niche verticals.”

In April 2021, Computer Weekly reported that Norway’s agricultural technology (agritech) startups had been expanding after benefiting from a number of funding changes made in recent years.

Lars Petter Blikom, CEO of Farmable, for example, said the snowballing of innovation and digital tools in agritech businesses could be attributed to an increasing number of incubators, accelerators, investors and companies coming out of Norway.

In the Oslo region alone, 2,200 startups and almost 200 scaleups have emanated from the ecosystem. More importantly, this deluge now caters for a broader range of sectors and use cases.

Because the manufacturing and traditional supply chains are not a big part of the industrial landscape in Norway – with the oil, gas and maritime sectors taking centre stage instead – the country’s tech sector has also had a unique focus on building internet of things (IoT) applications.

“IoT solutions involve a lot of different technology and interfaces,” said Anders Elbak, research director at IDC. “The technology created is often for a common good and requires collaboration between companies that may otherwise compete. This kind of collaboration is much more common in the Nordics than in other places, and it’s generally what’s needed for IoT solutions.”

Innovations in IoT-enabled predictive maintenance, for example, have been prompted by the dominance of oil and gas in a country full of remote, rural areas that are difficult and expensive to access.

“The data speaks for itself. Norway is becoming a major player in the Nordic tech ecosystem, and is rapidly catching up with other major European tech hubs,” said Lilliehöök and Nilsson in a joint comment.

“Where there are great ideas and entrepreneurship, investors will follow – Norway is proving that it can produce and scale impressive technology businesses. The future is bright, and at GP Bullhound we’re convinced that Norway is set to break through as one of the exciting tech markets in Europe.”