Norway – the geography basics

Finl

and

Denmark

Iceland

Scotland Oslo Stavanger

Bergen

Trondheim

Tromsø The North Sea – where the oil is

Scandinavia = Denmark, Norway & Sweden The Nordics = Scandinavia + Finland & Iceland

Norway: •  Pop.: 5.1 million •  Area: 323,803 km2 •  Capital: Oslo

Short personal intro

•  VC since 2008 •  Working closely with 3

companies: Encap Security (encapsecurity.com)

poLight (www.polight.com)

Novelda (www.xethru.com)

•  Investor in Residence

•  “International Norwegian”

•  Electrical Engineer

•  Career: –  Research Scientist –  Consultant –  Founder

•  Passion: Tech + Biz +  

Outline

•  Norway – the basics •  Oil and the impact on the entrepreneurial ecosystem •  Entrepreneurship in Norway – what’s going on? •  Alliance Venture and some company cases •  Nordic Innovation House and link to Silicon Valley •  Q & A

Norway – numbers and rankings

Rank     Country   US$  1   Luxembourg    112  473      2   Norway    100  579    3   Qatar    98  986    4   Switzerland    81  276    5   Australia    64  578    6   Denmark    59  129    7   Sweden    58  014    8   Singapore    55  182    9   United  States    53  001    10   Canada    52  037    

Rank     Country   Score  1   Norway   0.944  2   Australia   0.933  3   Switzerland   0.917  4   Netherlands   0.915  5   United  States   0.914  6   Germany   0.911  7   New  Zealand   0.910  8   Canada   0.902  9   Singapore   0.901  10   Denmark   0.900  

Rank     Country   Score  1   Denmark    7  693    2   Norway    7  655    3   Switzerland    7  650    4   Netherland    7  512    5   Sweden    7  480    6   Canada    7  477    7   Finland    7  389    8   Austria    7  369    9   Iceland    7  355    10   Australia    7  350    

Rank     Country  1   Norway  2   Switzerland  3   New  Zealand  4   Denmark  5   Canada  6   Sweden  7   Australia  8   Finland  9   Netherlands  10   United  States  

GDP (nominal) per capita, 2013 (IMF), n=183 UN World Happiness Report, 2013, n=156

The Legatum Prosperity Index, 2014, n=142 UN Human Development Index, 2013, n=196

Norway – oil facts

Norway is the world’s: •  15th largest oil producer – 1 902 kb/day •  11th largest oil exporter – 1 685 kb/day based on 2012 numbers

Source:  hPp://npd.no/en/PublicaSons/Facts/Facts-­‐2014/,  www.iea.org      

Petroleum's share of the Norwegian economy

Production profile

Petroleum sector impact on entrepreneurship

Benefits Drawbacks

•  A major entrepreneurial opportunity in itself

•  A successful oil & gas entrepreneurial ecosystem in Norway, including serial entrepreneurs, angels investors, VCs, R&D and industry players

•  A major driver for an affluent consumer, business and government market

•  Competition for and retention of premium talent

•  Cost and salary inflation in the petroleum sector is transferring and setting the standard for other sectors

•  Less short-time need or urge to create something new (non-oil related) – less attractive to take risk now

Innovation and entrepreneurship in oil & gas - examples

•  ProVenture Seed II is a new early stage fund focused purely on oil & gas

•  Statoil ASA (OSE: STL), a multinational oil & gas company and Norway’s “national oil company” was a catalyst and is the largest LP (except government)

•  500 MNOK (≈67 MUSD) fund operational in mid-2014

•  One of two new early stage funds with direct government funding

•  Norway is a hub for developing advanced software for oil & gas applications

•  IBM has located its Center of Excellence for Chemicals and Petroleum in Stavanger, Norway

•  Schlumberger active in acquisitions

§  Technoguide AS – reservoir software (Petrel) §  VoxelVision AS – seismic 3D visualization and

interpretation (GeoViz)

§  Reslink AS – smart well solutions §  SPT Group AS – dynamic modelling

§  GeoKnowledge AS - exploration risk and resource assessment (GeoX)

oil  &  gas  so)ware  acquisi0ons  in  Norway  

Entrepreneurship in Norway

50,100  45,491  

49,216   49,997  55,905   55,957  

0  

10,000  

20,000  

30,000  

40,000  

50,000  

60,000  

70,000  

2008   2009   2010   2011   2012   2013  

Norway  -­‐    new  births  vs  new  business  registraDons  

New  births   New  businesses  registraSons  

Rank     Country  1   Singapore  2   Now  Zealand  3   Hong  Kong  4   Denmark  5   South  Korea  6   Norway  7   United  States  8   United  Kingdom  9   Finland    10   Australia  

The World Bank’s Ease of Doing Business Index

Source:  www.doingbusiness.org,  www.ssb.no        

Industry    spin-­‐offs  &  splinter  co’s  

New  start-­‐up  ini0a0ves  

•  Overall  the  deal  flow  is  increasing      

•  Select  investment  opportuniSes  are  aPracSve    

•  The  deal  flow  is  both  core  tech  and  services  

•  Successful  entrepreneurs  are  starSng  new  companies  

•  Easier  to  aPract  experienced  management  

10  

Universi0es,  research  

ins0tutes  and  parks  

Start-up community is growing

11  

Company   Acquired  by   EV    [mill  USD]  

Sales    [mill  USD]  

EV/Sales  

3  700   808   4.6x  

1  000   162   6.2x  

25   0  (pre-­‐rev)   N/A  

153   27   5.6x  

200   28   7.1x  

350   35   10.0x  

1  390   350   4.0x  

177   27   6.6x  

170   10   17.0x  

New  start-­‐ups  Acquisi0ons  of  Norwegian  IT  companies  

Annual  avg.  value  of  all  Nordic  tech  exits  between  2005-­‐2011  is  €2.4  bn,  up  from  €1.4  bn  between  1998-­‐2004,  and  Nordic  VCs    were  involved  in  90  %  of  all  VC-­‐backed  tech  exits  >€100  mill.    (source:  Creandum)  

Acquisitions as catalyst for hot new start-ups

12  

Microelectronics  

Strong tech company clusters Conferencing  tech  

EdTech   Broadcast  tech  

Matching entrepreneurial talent with research-based start-ups

An approach from the Norwegian University of Science and Technology

Building entrepreneurial skills

Norwegian School of Entrepreneurship

Applying to university projects

•  Employing or contracting talented ex-students

•  Running commercialization projects

Managing spin-offs

Project resources become part of management team after spin-off

0%  

5%  

10%  

15%  

20%  

25%  

30%  

35%  

40%  

45%  

0  

100  

200  

300  

400  

500  

600  

700  

800  

2008   2009   2010   2011   2012   2013  

MEU

R  

Norway   Rest  Nordics   Norway  %  

14  

Total  venture,  Norway  and  Nordics  

0.360  

0.115  

0.054  0.041  

0.038  0.032  

0.029  0.027  

0.023  0.021  

0.011  

0.005  0.000  

0.050  

0.100  

0.150  

0.200  

0.250  

0.300  

0.350  

0.400  

Israel    

United  States    

Swed

en  

Finlan

d  United  Kingdo

m  

Denm

ark  

Norway  

Fran

ce  

EU  

German

y  Spain  

Italy  

Venture  capital,  %  GDP  

Venture capital in Norway

Source:  OECD,  EU,  Argentum,  Alliance  Venture  analysis  

2014  vintage  funds  with  Norwegian  HQ    §  Northzone VII – 250 MEUR (≈306 MUSD) §  Alliance Venture Spring – 510 MNOK

(≈69 MUSD)

§  ProVenture Seed II - 500 MNOK (≈67 MUSD) §  SINTEF Venture IV – 209 MNOK (≈28 MUSD)

15  

Firm  &  fund   Strategic  investors  

Execu0ve  Investor  Network  

•  Venture firm with HQ in Oslo, Norway •  Established based on Silicon Valley

principles and experiences to build US/international bridge

•  3rd fund, Alliance Venture Spring, established in 2014 – fund of 510 MNOK (≈69 MUSD)

•  Early stage investor – i.e. seed & series A + follow-up

•  Full tech value chain investor – semiconductor to digital content

•  Focus on Norway, ability to invest anywhere

•  Investing in emerging tech companies & supporting their global expansion

•  Access to innovation and new trends •  Joint deal evaluation •  Opportunities for co-operation between

portfolio companies and corporates

•  25 serial founders and executives engaged with start-ups operationally or as angel investors

•  Has invested in the fund and may co-invest directly

•  May engage in BoD, advisory or executive roles with portfolio companies

&

16  

•  Four students in Trondheim, Norway, invented a new 3D GPU architecture

•  Established Falanx Microsystems, developed IP core and raised money from Alliance Venture and Incitia Ventures

•  Sold pre-revenue to ARM •  Falanx is today ARMs Media

Processing Division with 350 employees world-wide and 100 engineers in Trondheim

•  ARM’s Mali GPUs can be found in >400 million units shipped in 2013 – the #1 Android GPU IP supplier

•  Established by key members of

ARM’s demo team in Trondheim •  Powerful tool for rich media cross-

platform native app development •  New Alliance Venture portfolio

company

•  Established by former GPU engineer from ARM’s team in Trondheim

•  Database hardware accelerator using parallel processing architecture

•  New Alliance Venture portfolio company

Case 1: &

– outracks.com

– swarm64.com

Case 2: .

SEE THROUGH The ability to see through objects enables hidden, tamper proof sensors that builds into walls.

PRESENCE Presence tells you if someone is in the detection zone.

MOTION Detecting the smallest motions, as those from a person breathing.

PROXIMITY Proximity tells you if someone is within a certain range.

DISTANCE Measuring distance to all detected objects, enables counting and speed measurements.

XeThru Sensors Combining all traditional sensor functions into one!

Check  out  the  XeThru  Respira0on  Monitoring  demo  video  here  

www.xethru.com

From  MEMS  wafer  to  camera  module    

Response  Sme:    1  ms                (VCM  =  5  to  15  ms)  

Power  consumpSon:  <  5  mW      (VCM  =  220  mW)          

Field  of  view:    Stable            (VCM  =  Unstable)    

Smallest  Footprint:  3.2  x  3.2    (VCM  >  7  mm  wide)  

(VCM  =  voice  coil  motor,  incumbent  technology)  

Product  advantages  

The  Tlens®  speed  enables  computa0onal  imaging  and  new  camera  capabili0es  

Tunable Lens (Tlens®) – Autofocus lens replicating the eye

Case 3: .

www.polight.com

59  

15  

6   5  #  of  NIH  companies  

•  Co-working and virtual office with community and programs for Nordic tech companies, investors and local advisors

•  Soft landing concept for entering the U.S. market, where the ultimate goals is to enable companies to scale faster and with less risk

•  Established in 2011 by Norway and joint Nordic initiative since 2014 •  “Investor in residence” sponsored by Innovation Norway (Norwegian

government agency) – a win-win set-up

www.nordicinnovationhouse.com 470 Ramona St, Palo Alto

www.nordicinnovationhouse.com 470 Ramona St, Palo Alto

Arne H. Tonning Partner

@AllianceVC @eagleonamound

E-mail: arne@allianceventure.com

www.allianceventure.com