The state of startup funding in Norway

As Norway gradually moves towards a post-oil economy, access to startup funding will be a key enabler of new businesses. After lagging behind Sweden and Finland for years, funding for such enterprise is finally becoming available.

A common complaint from budding entrepreneurs here in Trondheim and beyond is the difficulty of sourcing money to implement their big idea. The Norwegian government’s Innovation Norway organisation supports startup creation with soft funding to allow entrepreneurs to explore the viability of their business ideas, but support for the next step has been more difficult for many to obtain.

Beyond a couple of major venture firms, there’s been very few visible places for startups to turn to secure the funding to turn their successful prototype into a reality. It’s a problem that’s caused several successful startups to head to the USA or UK to secure their funding, meaning Norway has missed out on future employment opportunities and tax income.

But times, they are a changing.

'The rise in private capital investments in Norway over the last 18 months is staggering,' says Neil Murray, founder of, which reports on the region’s startup investments. In fact, it's actually the fastest growing investment ecosystem in the Nordics right now, even outstripping Sweden. Of course, it is starting from a lower base from the others - bar Iceland - but even still, this rate of growth is showing no signs of slowing down, with investments likely to break the 100 mark for the first time in 2017. This is particularly impressive when you consider that there were just nine in the whole of 2014,' he adds.

But while Norway’s market for venture capital still needs time to mature, the country’s entrepreneurs can - and are - turning to the power of the crowd.

Crowdfunding has grabbed the headlines in recent years thanks to several high-profile projects raising huge sums of money from lots of people on platforms such as Kickstarter. Using this method has helped the serious – two Pebble Smartwatch campaigns raised over $32m – and less serious – the Exploding Kittens card game from the Oatmeal raised $8.7m – come to life.

While such reward-based crowdfunding, where backers are essentially pre-ordering something before it’s made, has grabbed the headlines, there is another option for more serious funding.

Equity crowdfunding applies the same concepts as its reward-based sister, except backers are buying shares instead of pre-ordering a product. One new Norwegian company hopes the idea will catch on fast among the general public.

'One of our main goals is to turn around the Norwegian opinion from being interested in playing the lottery, which is a sure-fire way of losing it, to making savvy investments,” says Sverre K. Nilsen, founder of Trondheim’s Folkeinvest AS. 'We will do this by lowering the barrier for the general public to make serious investments.'

'Our product makes it easier for ordinary people to invest in startup companies and build a portfolio of investments and follow its progress all from one platform. In the long term they have the potential to earn so much more money than with gambling. Such a scenario will benefit the Norwegian startup scene by generating more interest, which in turn should lead to more traditional investment,' he adds.

Buying shares has typically been the remit of the wealthy.  Although the software tool resembles a regular crowdfunding campaign, there is one key difference. Norwegian law prohibits equity investments online, so a pledge in this case is reserving shares to buy once the proper paperwork has been processed. That’s something Nilsen and Folkeinvest hopes will change in the future, as the idea of private investing and equity crowdfunding catches on in Norway.

'Our vision is to make a platform whereby the funding process is totally automatic. This means a startup can list their company details and sell shares directly'.

Equity crowdfunding is on the radar of many in Trondheim thanks to Technoport. Over the past three years, their Live Crowdfunding Experience has brought together hundreds of potential investors to listen to pitches from the cream of local technology startups. In 2016, 2.3 million kroner was pledged to four startups, with FlowMotion Technologies alone receiving 1.1 million of that.

Such was the positive experience of equity crowdfunding, they have since gone on to launch a reward-based crowdfunding campaign to support their first product, a smartphone stabliliser for action video. More than 5,000 backers from around the world pledged more than 11 million kroner, a crowdfunding record for Norway.

Each funding method has its benefits. While reward-based crowdfunding is a great way to raise money for a specific product, it’s most important benefit is to verify demand. It’s clear that the demand is there for FlowMotion’s debut product, which should make those who invested in the company through last year’s equity crowdfunding campaign very happy indeed.

It seems unlikely equity crowdfunding will ever replace traditional venture capital, but it opens up a whole new set of possibilities for the keen Norwegian entrepreneur. 

In collaboration with Tech List

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