As part of the build-up to STHLM Fintech WeekFull Reach went to investigate the Swedish approach to start-ups at Embassy House – an eclectic catch-all that’s not quite an incubator, not quite an art gallery and not quite a start-up hub… yet is simultaneously all of the above! Stay open minded, it’s a Swedish thing…

Sweden – small nation, big Tech hub

If you’re looking for a medium sized European country (Sweden: ~10 million) that has a big global impact on tech, Sweden would surely be one of the top nations in the league table. With global businesses like SpotifyiZettle and Klarna to its name, Sweden is now the home of a second wave of companies in tech verticals from blockchain to AI, Fintech and e-tail. Companies like Minna TechnologiesTinkHedvig and others are now leading the race to scale and emulate their bigger tech cousins who broke into global markets over the last decade.

Stockholm vs Copenhagen – less structured, more unscripted.

Naturally, Denmark and Sweden are often paired together in terms of scaling start-ups. While Denmark has a heavily integrated system with public, private and institutions working together systematically, Sweden has gone for a more unscripted approach. Embassy House is an interesting example of the ‘Swedish way’. Both systems work well, they simply reflect the different dynamics of the two markets.

Anders Nilsson, Co-founder of Embassy House highlights the similarities and differences the two markets have.

If you’re a Swedish start-up and you want to scale – there’s really not much point in simply looking to the other Nordic nations. We have 88m people just south of us in Germany, nearly 70m each in France and UK. These are interesting markets. Where Sweden is different from Denmark is that they have a smaller domestic market (~6m) so they need to decide to scale quicker. Danish and Estonian companies are really good at scaling fast – because they have to.

The ‘Copenhagen’ model is a brilliant example of collaboration of public and private organisations. Copenhagen Capacity and Copenhagen Fintechwork hand in hand to create government supported non-profit spaces, incubation & acceleration programmes and support in setting up overseas quickly. Perhaps because of its slightly larger domestic market, the Swedish state has been less involved in influencing the tech ecosystem of scale-ups.

‘We care about one thing only – Product / Market Fit’

Embassy House in Stockholm works differently – with no direct government support and a deliberate lack of dedicated growth programmes for scale-ups. As a collection of ‘location agnostic spaces’, Embassy House prides itself on offering a range of support services that can be tapped into ‘a la carte’.

We don’t communicate that we’re an incubator nor an accelerator – but we offer all those services. Rather than make a market visit as part of a planned programme, we have partners across the world from Hong Kong to Shanghai to LA to New Delhi. We only care about 1 thing – does the product fit the market. If you haven’t done your homework you shouldn’t be making a market visit until you know you have a viable opportunity. In our spaces companies grow as they want and call in support as they need it – there isn’t 1 ‘go-to-market’ strategy we have.

We’re a co-working space that isn’t really about co-working space!

With margins thin for co-working spaces, Embassy House is an example of a privately funded business that, unlike not-for-profit government backed ventures, aims to make a profit from its investments. Many of those will come from the occupants seeking additional help as they grow.

We have 5 verticals that we’re experts in – our co-founders have stakes in several small businesses and when called upon we offer our expertise. We also then work with scale up businesses to help them in specific areas where the want it. We see ourselves as neither a co-working space nor an accelerator in that sense! As an example, BlockBlock (a Swedish blockhain community) has its home here as well as 5 other blockchain firms we’re involved with in different stages.

Turning up at Embassy House, you’re not quite sure what you’ll find. On this occasion there was an art instillation for Stockholm Design Week running alongside an eclectic bunch of small offices with busy looking techies and serious-but-scandi-cool product designers and disruptive thinkers. What unites them all is their desire to scale outside Sweden, to have a place to breathe and to have support when needed.

A lot of co-working spaces are actually sub-optimal for scale-ups. If you have start-up alongside you with just 1 person, that can be negatively disruptive if they are actually trying to sell you services instead of building their own product. In many cases those guys are using multiple memberships as a BD opportunity to sell to the scale-ups and it can affect the flow of building your own team. In our spaces people can leave their their equipment, have a space… paint a wall, place a whiteboard – its a place they can call home.

With his diplomacy over, Anders cuts short or discussion for a less interesting but more important incident.

We forgot to renew our electricity supply in one of our buildings – that’s pretty important to fix right now!

To read about Swedish Nordic Lights in more details here’s some in-depth articles from Full Reach’s Nordic Lights series >>

Hedvig (Insuretech, AI)