Episode 8: How Stockholm plans to be the impact capital of the world

Up Next For Your Private Business Podcast Podcast, PwC Netherlands March 2023

Playback of this video is not currently available


Episode 8: Startup ecosystem

Peter Englisch, Global Family Business and EMEA Entrepreneurial and Private Business Leader, Partner, PwC Germany, discusses the importance of a thriving startup ecosystem with Funda Sezgi, Co-CEO of Norrsken, the world's leading accelerator program for impact startups. The episode covers governments’ best practices when it comes to creating nourishing startup ecosystems and offers practical advice for female founders. 

  •  Host: Peter Englisch, Global Family Business & EMEA EPB Leader, Partner, PwC Germany
  •  Guest: Funda Sezgi, Co-CEO at Norrsken

Release date: March 08, 2023

References to ""we"" or ""our"" in this article are used interchangeably to convey the perspective of a collective of people or a broader societal context. This language does not refer to, or imply, the perspective of PwC. PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details 

Full transcript

Peter Englisch: Welcome from PwC, this is Up Next for Your Private Business, the video podcast series that brings together professionals from around Europe, the Middle East and Africa to uncover how private business leaders, government and policymakers can work together to build an enabling environment for private businesses to flourish and grow.

My name is Peter Englisch, Global Family Business and EMEA entrepreneur and private business leader, partner in PwC, Germany. Today, we're exploring the importance of the startup ecosystem.

According to PwC’s recently published Private Business Attractiveness Index, a vibrant ecosystem of talented and creative people set the foundation of an attractive environment for private businesses.

But what goes into building such a thriving startup ecosystem? And how can businesses, investors, accelerators and startups work successfully together? To answer those questions and more, I have the pleasure of talking with Funda Sezgi, Co-CEO at Norrsken, based in Sweden.

Before assuming her current role, Funda co-founded Norrsken Impact Accelerator, the world's leading accelerator for Impact startups. Welcome, Funda..

Funda Sezgi: Hi Peter, thank you, wonderful to be here.

Peter: Thank you so much for joining us today. So let's talk about the connection between businesses and the startup ecosystem. In our recently published study, we noticed that one of the most important factors for determining a country's business attractiveness is the presence of a vibrant startup ecosystem.

Funda why do you think startups are so important to the business environment as a whole?

Funda: So I'll take this from the perspective of creating positive impact and like if we can really start imagining a world, a future, I really think that we need to set the ambition level super, super high and we really need to start thinking of building a world that is environmentally sustainable and socially and financially inclusive.

And I do think that it takes a village to create the types of systemic changes that we need to see. And that's why I think startups are an extremely crucial part of the whole picture. And if I can take a couple of steps back Peter, I think you know the challenges that our society is facing today are so complex.

You know, we think about climate change, we think about mental health, misinformation, you know like these problems do not recognize any borders. And they are scaling at such a fast pace that the solutions are not really keeping up.

And to be able to match the challenges that we're facing, I think we do need to really find ways to innovate fast and then find ways to bring them to a massive scale. And at Norrsken I mean, that's what we try to do.

We really believe in the power of entrepreneurship and technology as positive forces for change. And that's why we created this ecosystem where we're enabling entrepreneurs that are then hopefully growing so much faster.

And if I may add, I mean, jointly our ecosystem is now like we're managing over $500 million and supporting entrepreneurs through our funds, accelerators and entrepreneurial hubs. 

And like jointly, we're now – we've supported over 1000 startups in our ecosystem. But that said, again, we're just a tiny drop in the ocean. I mean, it's like the complexity that we're facing is so huge that it requires collective efforts.

And I think that's really why both of these actors need to play their parts. You know, the startups being the agile actors that can innovate fast, and then the big businesses that are there that can actually really take these solutions to the scale that we really need to see.

Peter: So if I'm getting you right, you are saying that innovation facing and addressing important issues for society, the environment and the planet is a better place in the vibrant startup scale-up ecosystem.

And I would really tend to agree with that statement because what we see also is that many businesses, including many private businesses, can better innovate outside the day-to-day business.

And this is why the connection and there's an interest, of course, in matching meetings or even investing into new ideas. So whether it’s ESG-related or technology related, we see that quite often.

But how – what is in your opinion or experience the best way, how they can collaborate, what is the best way that innovators and traditional business owners can meet?

How can they find each other and support each other? So what is your experience after so many years?

Funda: Yeah, I mean, we work with large businesses and corporate partners a lot, and I think there is a huge benefit in bringing those actors together, right? And I think some of the best examples I have seen are where the large businesses are investing in the startups and using their muscles to actually help them to reach the scale that we need to see.

So, you know, invest and then put a giant spotlight on these startups so they can break through the noise and then really bring them to their operational world. So businesses are developing their ways of working through startups in a lot of practices.

And if I can be brutally honest here, I really think that there's really little value or the real value is kind of lost. When big businesses go ahead and acquire the startups early on and then kill the innovation.

Because of your point Peter, I think there is great value in keeping this outside of the corporate structure. But then, you know, trying to figure out how we blend this into our operations and organization down the line rather than, you know, blocking the progress there.

And we love working with businesses that see these solutions as opportunities rather than threats. And like because we think that if these startups win, we all win. So I think we just need to let them live their life and then stand, you know, too.

Peter: Why do you think then this has such a positive impact on the overall attractiveness of a country if such an ecosystem exists by what you are saying is so yes, investments are needed and also the support, mutual support is needed, but just to a certain extent that innovation is not going to be killed in a way.

But there's a mutual interest in each other, right and how to find the right balance of benefiting as a corporate or even as a private business from the inspiration, from the new technology, from the new thinking of startups and scale up entrepreneurs, bringing them down in terms of their passion, let's put it that way.

So what you have seen as a good practice you started in Sweden Sweden is also ranked pretty high when it comes to attractiveness for startups and scale-up.

So what do you think makes Sweden so attractive and is there a winning formula so to say that also the government and other stakeholders in the ecosystem can learn from?

Funda: Yeah, I mean like some, some of the great examples are really were like there are aligned agendas in terms of like where the business is trying to grow and then there's a startup that is tackling one part of that solution that the big business, you know, does not have the initial interest at least in developing.

And then, you know, like I've seen startups developing plans together with large businesses like they would not be able to bring their solution to that kind of scale if they don't have these plans and then they don't have the initial muscles to be able to, to get there.

So like, some of them work very well in terms of strategic partnerships as such and then some of the solutions are really like where the corporates go in and then say, okay, we will invest in like these funds or startups to be able to take them to the next level to see if at some point we can incorporate these solutions in our business practices.

So I think there are great wins for both sides in keeping that structure. And when it comes to Sweden in particular, it's a country that has been an innovation pioneer all this time, right?

And if we think about unicorns per capita, I'm sure it's not the first time you're hearing this, but Stockholm is one of the best in the world. I guess the second one after Silicon Valley when it comes to the number of unicorns per capita that this country and city has produced.

So we're talking about Klarna, you know, Spotify, like iZettle, Skype. So these are great examples and I don't think it's a coincidence that there are so many new ideas coming out of this country. And I do think that there are a lot of historical reasons for this as well.

That's like the fact that this country was one of the first to adopt digitalization. So there is that but like if we can look at what is happening more contemporarily is that like…

I think one of the most crucial factors is that those companies that have succeeded previously, the founders of those are now engaging their capital, their knowledge and their network in helping build the next generation of entrepreneurs.

So the ecosystem starts with these success cases who are role models for the up-and-coming ones, like Skype being one of the first global companies like tech companies coming out of Sweden was an inspiration to Klarna and the later ones.

And then they're now – they're the ones that are supporting the next generation entrepreneurs. So I think this like paying forward culture is something unique about this ecosystem but if I can yeah, go.

Peter: Yeah so …culture I think I love what you're saying and as we have the pleasure of having you here and Norrsken has already moved into different countries with different cultural backgrounds and different histories.

I would be interested to learn what the difference is and for our listeners and watchers here maybe just as information you moved already to Africa, Kigali, Rwanda was another Norrsken house with another incubator and you recently also opened one in Barcelona in Spain.

So if you compare Sweden and the business or the conditions for startups in the various countries, what are the main differences?

Funda: So I mean these three ecosystems are quite different in terms of their maturity I would say and I think like Sweden is I think the I mean, it's the best time and place to be a tech entrepreneur honestly.

It’s really like you can access knowledge, and capital networks, it’s just getting out into the streets and you bump into unicorn founders. And I think this is a unique situation here.

But I also see that like this Stockholm city itself has put the ambition that they now want to be the impact capital of the world, not just the best tech startup ecosystem, so I think.

Peter: You are referring to the Norrsken Impact Week, I guess, right, so the tech becomes very important?

Funda: Not just that I think we're one of the catalyzers, but there is a commitment from the city to actually like to put a ding on the universe in terms of impact.

So what I see here is that once the ecosystem matures in this way, then the next level question comes as to, okay, how do we then be the best ecosystem for the world, not just in the world?

Peter: But what I hear also is that you're saying that the government and policymakers can do something to support the existence and the growth of this ecosystem, right?

So just allowing for this to happen, setting, enabling, supporting the environment, which is maybe less tax or more cost-driven, more infrastructure driven, more availability of inspiring people with a good education drive.

So is this what you're saying? Because this could be transferred as a message to other territories and countries, and say if you want to have a vibrant ecosystem, what is or what do you need to do?

So what would be your answer if you have the possibility to talk to a government representative who is asking you, what shall I do to support a similar vibrant ecosystem that you found in Sweden? What is it? What do they need to do?

Funda: I mean, the biggest needs for the startups to succeed tend to revolve around access to capital, access to talent, and then a huge spotlight on them, right? And I think the policy is that government cities can play a critical role in facilitating these connections for startups.

And then enabling actors like Norrsken and the other ones that are building their ecosystems. So I think that is one of the things that I see happening in Sweden a lot. And like I'm going to throw in one data point that I have from like we gathered from the deal room that it's like accordingly in Sweden now there are 35 times more impact startups per capita in comparison to the rest of the world.

I mean that is huge. And I don't think this is a coincidence, I mean, this requires some discipline as to how we bring different actors together and then enable the startup ecosystem. I'm not going to touch upon all the regulations and whatnot.

I mean, like talent being able to move here, etc. I think there's a lot that still needs to be done here as well. But there are enablers for sure in this ecosystem.

Peter: You were talking about the investor, so what we observe is that there is a huge interest of private business owners and family offices, which means private family capital to invest in the ecosystem. And is this something that you also see that more private and institutional investors are supporting and investing in the ecosystem?

Funda: Absolutely and I think if I can make a distinction between Barcelona and Stockholm for instance, and there's a huge potential in the Spanish market, I mean, great ideas, great entrepreneurs, but historically they have been lacking access to risk capital.

And it's, you know, old capital that taking the risk means that, you know, it's great solutions that are looking for capital outside of Spain, which is what we would like to change there because we see great opportunities that anyone can tap into early on.

But we just need to trigger the risk capital there and that goes to family offices and private businesses and all of that, I mean, this is like where the needle starts moving.

And in the same way Kigali is definitely a more nascent ecosystem in that sense but again, like so many great solutions that we have already come across, that's mind mind-blowing like how do we make sure that we bring to the attention of the ones that there to take the risk already, that's geography.

Peter: If we talk about impact investing or impact-making entrepreneurs, there is in some heads the idea of small businesses fixing a certain very narrow solution so that it's very hard to scale to bring it to an economic scale.

So how are you dealing with that? What is your solution and how important is technology in the business cases that you are going to support?

Funda: Yeah, so when we invest in startups, what we first look at is the impact potential of that business and whether the impact is baked into their business. So not just a side hustle, but the core of the business is about bringing impact to the world.

And then we think that if we help scale the business, then the impact of it proportionally scales or even better, exponentially with the business. So this is basically one of the key things that we look at and scalability is the utmost key.

As I mean, that's why at Norrsken we think that entrepreneurship and the combination of that with technology are the two critical factors that we need to incorporate into the businesses that we see.

Peter: This is fantastic feedback from your end. Funda last question to you, so let's focus on women founders and entrepreneurs, so as we see for many years, the numbers could be much better and how can we encourage more female founders to start a business to make a real impact? And based on your experience, some obstacles that they currently face?

Funda: Yeah, I think I mean, it is a challenge to solve. And like I'm sad to say that Sweden is still one of those that are lagging in terms of female founders and the money that goes to female founders.

I mean, in our world from where we are, for instance, running our impact accelerator, we made a conscious attempt and effort into inviting female founders to apply. So like it all goes back to how you build your processes, right?

If you say that we couldn't find any female founders, that means that you're not looking at where you need to look. So, if a company has such a goal, you will actually get to that KPI. So what we do is we always reach out to the female group like founder groups and try to identify the best ones that we can support.

And I think it goes back to the money, right? I mean, money draws then the solutions. So I think we just need to make sure that the capital has the discipline to look for the founders out there.

But that said, I want to encourage any female founder or want to be a founder here listening to this podcast that there has never been a better time to be a female founder.

Like everyone says, at least it says that they are looking for these great female founders. So just get out there and make yourself visible and there is money for your ventures.

So please just go ahead and knock on the doors if you're getting a no, you're talking to the wrong audience, so just find the right ones.

Peter: Excellent, thank you so much Funda and you are such a great inspirational example with power and passion for what you do, this is just phenomenal and to conclude, I think it's important and you can showcase why it's important that for the overall attractiveness of a country, dialogue between disruptive, innovative entrepreneurs trying to fix important problems and established businesses is an important and mutual benefit that private capital is super important to get things done is like a catalyst for ideas, and this is also for mutual benefit. It's not just for altruistic purposes, it has a real business case and I think this is different from classic philanthropy in the past.

So I think what you have pioneered and what you are going to continue to do also in Africa and Spain now is fantastic and we wish you all the best of success in Norrsken in the future.

Funda: Thank you if I may add one thing, I mean, just along with – along the same lines with what you just said Peter, I mean, the world's greatest challenges are also the world's greatest opportunities, so we like what people see as oof, like this is outside of my world.

I think it's exactly where you will find the interesting opportunities, so I highly encourage you to take a deep dive.

Peter: Thank you so much, Funda, for joining the podcast. I'm sure our audience finds the discussion as insightful as I did to everyone watching or listening to the podcast today. Thank you for tuning in. If you enjoyed this episode, please subscribe to our podcast series. We will release an episode each month and I hope to see you then. Goodbye.

Required fields are marked with an asterisk(*)

By submitting your email address, you acknowledge that you have read the Privacy Statement and that you consent to our processing data in accordance with the Privacy Statement (including international transfers). If you change your mind at any time about wishing to receive the information from us, you can send us an email message using the Contact Us page.

Contact us

Peter Englisch

Peter Englisch

Global Family Business Leader and EMEA Entrepreneurial & Private Business Leader, Partner, PwC Germany