As we close in on the final months of 2016, Denmark has been a standout in the Nordics for startup investments with dozens of funding deals this year.
That was the opening gambit from Christoffer Malling on stage at the latest “town hall” meeting for Copenhagen For The Win, or #CPHFTW as it is known, a startup community organisation founded in 2013 that’s promoting the city’s startup ecosystem and linking entrepreneurs with decision makers and collaborators.
According to the founders, Copenhagen had been lacking a cohesive community for startups, the likes of which can be seen in several European cities from Amsterdam to Stockholm.
It may not be the most original idea but a necessary one, said Malling, who is the CEO of the organisation.
“We were not united, we were very siloed. There were sub-communities all around but there was no unifying banner or community,” Malling told Tech.eu on the impetus behind setting up the organisation.
#CPHFTW, a non-profit, is steadfast in its funding model that eschews government backing. Instead it relies on fees paid by members to join the group so they can benefit from each other’s events, resources, and contact lists.
It must have been a hard-sell in the early days, convincing prospective members to pump money into an organisation that had yet to prove its worth. “They paid into wanting that future organisation to live,” explained Malling.
Now the organisation has 132 members and recently added Copenhagen-founded standout Tradeshift. Bigger companies that have raised several rounds or exited can join but pay the equivalent of about €3,200 a year to be a part of the community. For A round startups it’s about €1,300 a year while seed stage companies will pay around €350 and newly-born zero-cash startups can join for free.
All these roads led to #CPHFTW’s September town hall meeting – it holds one every three or four months – as part of Copenhagen Tech Fest, a month-long series of events covering tech and startups like CopenX and TechBBQ. Held in Copenhagen’s Christiania neighbourhood, it was the group’s biggest town hall yet.
Copenhagen may not be the biggest city but it can make the most noise, proclaimed director of Copenhagen Tech Fest, Marie Gørvild on stage, which was followed by an evening of panel discussions and quick-fire startup pitches. It was very much an event for showing off what it had accomplished.
The thousand-plus people that came out for the event is worlds apart from the startup community, or lack thereof, in Copenhagen a couple of years ago.
Not long after its founding in 2010, Tradeshift had started holding a couple of events for entrepreneurs in Copenhagen, explained CTO and cofounder Gert Sylvest, and #CPHFTW now feels like a natural continuation and growth of that. It’s a growth that has led to changes in the local attitude towards startups as places to work.
“I think in Denmark there’s a shifting mind set where you have the young generation in 2010 when we started Tradeshift, they were very conservative-minded in terms of places they wanted to work,” said Sylvest. “Guys like Copenhagen For The Win have done a lot to go out into the universities and talk about a whole world here.”
Recruitment remains one of the #CPHFTW’s biggest hurdles to cross. “For us there’s always a question of finding developers because we want to build things here not abroad,” said Henrik Printzlau, CTO of Templafy.
The organisation runs its own job board but it’s at events like town halls that it brings the job hunting startups to the people with quick two or three minute pitches from startups describing the roles they’re trying to fill and perks of joining the company. It was an interesting approach but one somewhat hampered by the event winding down and the increasingly noisy and distracted crowd. An open bar with a thousand attendees will do that.
Denmark may feel there’s a hole in certain skill sets in graduates and #CPHFTW believes that the Danish government’s policies for hiring and retaining international talent aren’t helping either and are stifling for startups.
“The problem is Danish politicians of all levels, and some corporates and bureaucrats, they do not know what a tech startup is,” said Malling. “They know what an entrepreneur is but that is the freelancer and the mom-and-pop brick-and-mortar shop down the road, then it’s Tradeshift. They have no means of differentiating between types of companies.”
“That’s a shame because they can’t adopt any policies or improve the conditions for these kinds of companies. We still have some archaic policies in place that make it really hard to attract and retain international talent.”
Denmark is one of three EU countries, along with Ireland and the UK, that has opted out of the EU Blue Card scheme for hiring highly-qualified foreign workers. Instead it runs its own green card program.
“For example if I’m the co-founder of a tech startup and I find this great front-end developer from Sao Paolo and this person wants to work for us, we have to jump through a lot of hoops, we have to guarantee a minimum wage that’s extremely high,” according to Malling.
It can be too much time, effort, and red tape for a startup with limited resources as it stands. On the other hand, there are schemes like Fast-track that allow companies to offer jobs to skilled foreign workers quicker. But Malling said this favours bigger companies, mostly due to the high minimum salary it sets. “It’s not a level playing field.”
It places Copenhagen in a difficult spot as the competition for talent is not unique to Denmark or the Nordics, it’s felt across Europe and the world.
Where Copenhagen does not appear to be struggling though is funding. Local startup and group member Pleo was one of many companies pitching on stage during the town hall. The expenses automation platform had plenty of reason to be jovial as earlier that morning it announced its $3 million funding round.
For Sponsta, a marketing startup that connects brands with popular Instagrammers, it has benefitted first-hand from #CPHFTW’s events like AngelNext, a meetup for early stage startups and angel investors.
“That’s how we got on their radar. Three or four months later we closed the round,” explained Sponsta CPO Daniel Mierzwinski. “We hadn’t really been speaking with them before so that was a great opportunity for us. The investor we took on board also helped us with the next round with Seier Capital, which is a Danish fund. That’s just an opportunity that we wouldn’t have run into any place [else].”
It comes in stark contrast to the funding landscape across Europe several years ago. Tradeshift quickly moved to San Francisco to establish a presence there and get the ball rolling on breaking the US market. Its first investors were US-based.
So with all this positive talk about Copenhagen and startups, is it actually possible to build and base a world-beater in the city?
“We’re actually pretty successful in doing it,” said Templafy’s Printzlau. “We thought initially in our business plan that we should build local offices around the globe to be able to scale but we’ve been able to do big enterprise deals out of Denmark.”
“It seems like it’s definitely possible,” added Mierzwinski, and local companies are getting bigger while remaining in the city.
“I made my first startup in 1988 and that was a time where we were really in the dark. It’s a big contrast,” laughed Printzlau. “The only funding was from banks or fools, friends, and family. We were just alone. There was no one to go to for networking, you had to invent everything yourself. This is just a massive contrast to that.”
Event photos: #CPHFTW