Norrmalm, Stockholm: Where Unicorns Gallop

Fawn Fitter

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Niklas Zennström

Sweden’s capital breeds more “unicorns”—those rare and elusive digital startups valued at US$1 billion—per capita than any other region in the world except Silicon Valley, according to technology investment firm Atomico.

Stockholm’s unicorns include companies with apps on smartphones the world over. Nearly a decade ago, Atomico founder and Stockholm native Niklas Zennström sold his own unicorn, Skype, now headquartered in Luxembourg, to eBay for $2.6 billion. Today, Stockholm’s stable also includes Mojang, maker of the video game Minecraft, bought by Microsoft in 2015 for $2.5 billion; King Digital, which makes the online game Candy Crush Saga, currently valued at $4.9 billion; and music-streaming site Spotify, with a market cap of $8.5 billion, which makes it the most valuable venture-backed company in Europe.

This continuum of activity makes Stockholm a veritable unicorn factory in the view of many observers, including Forbes and The Financial Times. AngelList, the influential startup investing platform that links companies with funders, lists 590 digital startups in Stockholm, with an average valuation of $3.6 million. If you’re hunting for future unicorns among them, you’ll have the best luck in the neighborhood of Norrmalm.

Though Norrmalm is one of the oldest parts of Stockholm (it was first settled in the 11th century), in the 1950s and 1960s much of it was redeveloped into a thoroughly modern city center with broad, busy streets on a regular grid. Today, the remaining 19th-century brick office blocks rub up against glass and steel high-rises full of hotels, banks, chain stores, boutiques, and restaurants. Nearby are cultural institutions, including the Royal Academy of Fine Arts, the Stockholm Concert Hall, and the Royal Swedish Opera. On side streets, older stone and stucco apartment buildings house small shops and cafes on their ground floors.

The area is anchored by the Hötorget metro station at the intersection of Sveavägen and Kungsgatan streets. A 10-minute walk west brings you to Stockholm’s main train station, with commuter and regional trains, as well as subway and bus connections. That’s why SUP46 (Startup People of Sweden), the first startup hub in the city, opted to open in this neighborhood.

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SUP46’s co-working space

“Historically, the startup scene in Stockholm was fragmented, so our goal when we opened in 2013 was to gather the community in a part of the city that’s easily accessible for both locals and visitors,” says CEO and co-founder Jessica Stark. “It offers the best commute regardless of where in Stockholm you live, and it’s near the express train that runs straight from Arlanda Airport, which means international visitors can easily access your office, too.”

 

SUP46 is a hybrid accelerator and co-working space, with 57 current members that collectively raised as much in the first half of 2016—$31 million—as they did in all of 2015. It’s also a community center that hosts 250 events a year, Stark says. These events include monthly happy hours; events showcasing women in technology; the annual Swedish Startup Hall of Fame awards ceremony, which honors local tech entrepreneurs; and Demo Day, when entrepreneurs can pitch their companies to international investors.

Its success has drawn other hubs to the neighborhood, as well as incubators, co-working spaces, and established companies such as Klarna, which provides online payment services. Today, the city’s entrepreneurial calendar is packed with events like Impact Hub’s Friday afternoon open house; the monthly Stockholm Tech Meetup, which claims to be the largest such gathering in Europe; and the annual Stockholm Tech Fest.

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Stockholm Tech Meetup

StartupLocation.com, which maintains a map of local startups, places at least 25 within an easy stroll of the Hötorget metro station. Stark also identifies a cluster of gaming-related startups in the Södermalm district, south of Norrmalm across the Centralbron bridge, along with other pockets around the city. Since Stockholm is small enough that it’s easy to get around, she adds, “many parts are bubbling with startup activity and have been for some time.”

In fact, Stockholm Business Region, the city organization that promotes growth, reports that the number of tech companies based there has doubled in the last decade, and that nearly 20% of the city’s working population is employed by the tech sector. Other factors seed the field: the city is home to the Royal Institute of Technology, one of the world’s leading science and technology universities; and its municipal fiber-optic network provides high-speed internet service at up to one gigabit per second to almost every home and office in the city. Sweden as a whole has the fourth highest rate of internet usage in the world (nearly 95%), according to the International Telecommunication Union, the specialized agency of the United Nations that is responsible for information and communication technologies.

So when you walk down the street in Norrmalm, keep your eyes open. You might just glimpse a unicorn galloping by. D!

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Where to eat:

a_button_goldMathias Dahlgren – Matsalen Swedish/European

b_button_goldEkstedt Contemporary Scandinavian

c_button_goldWedholms Fisk High-end seafood

Where to stay:

a_button_blueGrand Hôtel Stockholm

b_button_blueLydmar Hotel

c_button_blueNobis Hotel

d_button_blueRadisson Blu Strand Hotel, Stockholm

 

Read more thought provoking articles in the latest issue of the Digitalist Magazine, Executive Quarterly.


Fawn Fitter

About Fawn Fitter

Ever since discovering the fledgling Internet in the early 1990s, Fawn Fitter has been fascinated by the places where business and technology intersect. She’s spent 15 years in San Francisco, watching the ebbs and flows of the digital economy and writing for magazines, including Entrepreneur and Fortune Small Business.