‘A Nordic jet engine’ – Stockholm as new hotspot for tech startups

The Swedish capital of Stockholm has become a new hotspot for tech startups. Being described as the “true jet engine of the Nordic tech scene,” its impacts reach all corners of the globe.

Sweden is the fifth-largest pot for future unicorns in Europe. Numerous startups with billion-dollar valuations began their journeys in Stockholm, with many of them changing how people live their lives, including the audio streaming service Spotify.

With its rich music culture — particularly rock and pop — many other music tech companies were born in Stockholm as well. SoundCloud, an audio-sharing platform, was established in the city back in 2007 before moving its headquarters to Berlin. Renowned music and video streaming service Tidal started in Stockholm in 2014.

Stockholm is famous for its impact startups that aim to solve prevalent social problems via technology. Plant-based milk company Oatly, for example, wants to help people live healthily while keeping environmental damage minimum. Meanwhile, Re:newcell provides recycled and biodegradable materials for the fashion industry.

The gaming industry in the Swedish capital also has also boomed over the years. Stockholm-born game developer King created the worldwide famous Candy Crush Saga. Giant game company Activision Blizzard later acquired King for $5.9 billion (€5.6 billion) in 2015.

Game developer Mojang Studios, mostly known for its worldwide phenomenon, Minecraft, is also based in the city. The company is now a subsidiary of the tech giant Microsoft after an acquisition worth $2.5 billion (€2.4 billion).

Sweden as an optimum startup incubator

Stockholm’s role as a major tech hub directly correlates with the policies of the Swedish government. It started with the “Home PC reform” in the late 1990s, which boosted computer penetration among Swedes.

Citizens also thrive due to the elaborate social security system, which encompasses free education and highly affordable childcare. Businesses and workers can receive income insurance funds in emergency cases such as bankruptcy and layoffs, helping people to focus on innovating. Moreover, the Swedish government allocates more than one percent of its GDP to R&D.

Limitations are, however, still present in Sweden’s startup scene. There is a lack of diversity and companies must pay high taxes.