The roots of music-streaming service Spotify and several other successful technology companies can be tracked back to one prestigious university in Stockholm: KTH Royal Institute of Technology.
The 188-year-old institution, home to approximately 12,000 students, has long been regarded as one of the leading tech unicorn powerhouses in the world but now it’s looking to help the Swedish government capitalise on the breakthroughs and creations coming out of its labs.
Through the KTH Innovation department, the government-funded university is hoping to build the next generation of unicorn companies. It plans to do this by commercialising the ideas of students and researchers across a plethora of departments, from computer science through to biomedical science and materials science.
By no means is KTH the only university to start trying to commercialise ideas. In the UK, Cambridge, Oxford, Imperial and UCL are all spinning out startups through dedicated departments and incubators, as are the likes of Stanford and MIT in the US.
But Sweden deserves special attention right now. Given the country is home to less than 10 million people (less than in all of Greater London), its track record of creating scalable technology companies is impressive to say the least.
In the last year, Sweden has produced six $1 billion tech companies, including music-streaming service Spotify and payments group Klarna.
“I think success breeds success,” explains Lisa Ericsson, head of the KTH Innovation. “We’ve had so many great startups in the last couple of years. A lot of our students think if Daniel Ek could found Spotify here when he was just a first year student then I can do it too.”
Unlike the UK, where it now costs £9,000 a year to enrol on the majority of university courses, education at universities in Sweden is free.
“All you need talent,” said Ericsson. “I think we have a lot of very well educated people. If you look at the strength areas of the university, we have five of them: ICT, life science, material science, transport and energy.
“When it comes to the type of startups, a lot of them are born at the school of computer science, which is where Spotify was born.”
Startups spinning out of KTH Innovation have access to a pool of money that has been granted by the Swedish government. The annual pot of €400,000 and €500,000 has been set aside to help students and researchers start their companies and patent their ideas.
“Either we search for ideas out in our labs or at the different education programmes here or they come to us with their ideas,” said Ericsson. “Many of the ideas are quite complex so it can take quite a long time before they actually become companies.
Last year, KTH Innovation supported 234 new ideas, half of which came from students and half from researchers.
Ericsson added: “We sit down with what we call the ID owners and say, 'Ok, what’s this?’ and help them to create a structure around the ID. We ask them if it’s something we can try to build a startup on? Is this an idea or is this a hypothesis?”
In order to further support companies spinning out of KTH, the institution has teamed up with Silicon Valley billionaire and Splunk cofounder Michael Baum.
Last year, Baum recognised KTH as one of the most innovative universities in the world, inviting it to be a part of his exclusive Founder.org programme along with around 40 other partner institutions.
Through Founder.org, university students are invited to pitch their company to Baum. If they’re successful then they’ll be welcomed onto his company-building programme and receive between $10,000 and $100,000 in cash, with the opportunity to secure further investment from his foundation when they graduate from the cohort at the end of the year-long process.
Each year 50 startups are enrolled into Founder.org and this week, Baum held the annual World Founders Forum event at KTH. At the event, he announced ManoMotion, a real-time 3D gesture tracking and analysis company, and peerCast, a peer-to-peer live stream video company, as the two KTH companies he’s backing through the next cohort.
A number of the companies being backed through Founder.org are set to be trialled at Baum’s new luxury hotel in Burgundy, France, when it opens in 2017.
Whether they, or any of the other companies being spun out of KTH, will turn into unicorns remains to be seen but there’s certainly a push on to make it happen.
What about Gothenburg?
While Stockholm is undoubtedly leading the charge in the Swedish startup scene, Gothenburg is also putting up a good fight.
Chalmers University of Technology, a Gothenburg institution home to 11,000 students, is putting half a billion Swedish krona (£38 million) into a new wholly owned subsidiary within Venture Creation, according to Sara Elg, who leads business development and marketing at Chalmers Innovation startup accelerator.
The two Chalmers incubators, Encubator and Chalmers Innovation, are ranked among the top ten university business incubators in the world. Together they have propelled such companies as super gazelle company Oxeon (2010), systems supplier Vehco and cancer vaccine company Immunicum into success.