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Skype’s legacy and the rise of the ‘new Nordics’

Estonia and other Baltic states could be part of a ‘new Nordics’ of technology innovation

The focus on tech startup development across the Nordic region has intensified in recent years, thanks to a glut of global success stories. And yet, just a stone’s throw across the Gulf of Finland sits a Baltic nation that rarely hits the headlines, despite a current unicorn count of 10 from a population of just 1.2 million.  

That country is Estonia. And, alongside Lithuania and Latvia, there are calls for Danish, Swedish, Norwegian, Icelandic and Finnish ecosystems to better leverage the levels of ingenuity and innovation that exist across their main cities. The intended result: a “new Nordic” region even stronger in the tech realm than we have seen so far. 

It isn’t an entirely new concept to merge the interests and strengths of Estonia, its capital Tallinn, and the neighbouring Nordic contingent. In fact, the person who coined the phrase “the new Nordics” did so from direct experience of working for the expanded region’s most famous success template – Skype. 

Revered as one of the globe’s most prominent and longstanding communication tools, Skype’s Estonian origins, from the hands of four local developers, are often overlooked. Explore the company’s genesis even more closely, and you’ll find input and resources from across Sweden and Denmark, too.

One such source of input came courtesy of Eric Lagier, who is now a founder and managing partner at byFounders – a Danish venture capitalist seeking to invest in startups with sustainability and strong environmental, social and governance (ESG) credentials in tow. 

Lagier said: “I coined the ‘new Nordics’ term when initiating byFounders, while looking across the region we would be looking to operate in. While with Skype in Estonia, what I saw was the power of bringing together resources from across this expanded group of countries, to build a massive, fast-growing, globally successful technology company.” 

Complementary talent 

Lagier recalls a potent mix of talent, personality, ambition and social drive from within Tallinn, in particular. It also comes as no surprise that a host of additional unicorns have also followed in Skype’s footprints – spanning the likes of Playtech in 2007, to Bolt and Wise in the late 2010s, and Veriff and Glia as recently as this year. 

“Yes, they all have to think internationally from day one, like all Nordic startups, but Estonia has more unicorns than France,” he said. “That’s pretty incredible, regardless of the strength of outlook, and it’s exactly why byFounders is striving to better connect traditional Nordic countries with the vast potential that exists across the Baltics.” 

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What the venture capitalist is trying to achieve through this approach is a merging of complementary skills. By selling opportunities to Tallinn entrepreneurs under the banner of a “mutual relationship”, it is hoped that each country’s strongest attributes can combine to form even better tech companies. 

“Bar none, the Baltic nations have the most solid base of talented engineers,” said Lagier. “Meanwhile, in Sweden there is a very strong foundation of product visionaries and builders. The Danes are typically very strong commercially, and are good at building business models around SaaS [software as a service]. 

“Each country has elements of all the required attributes, but there are also unique strong points that can be shared and leveraged across each other.” 

Catching up 

But it’s not just tech talent that all these nations have in common. Lagier attributes one of the most significant synergies across the region as being “a good sense of humour” – to immediately cut through any cultural barriers, to “laugh, share and bond”, and to reach a mutual understanding so quickly was critical to the development of Skype, he said. 

“That company really was ground zero, and the catalyst for direct lines of communication and development that have contributed to all other unicorns to come out of Tallinn since,” he added. 

“However, it’s a theme that needs to be built on more, just as it is across Finland, Norway, Sweden and Denmark.” 

In fact, Tallinn is not the only area being targeted for broader collaborations and startup creation. Vilnius in Lithuania and Latvian capital Riga are also very much part of the conversation. And while Tallinn is currently the frontrunner of the three, the two more southerly cities are “fast catching up”, as epitomised by companies such as Vinted and NordVPN to have come out of Lithuania in recent years. 

Each has done so courtesy of international partnerships – the latter involving influence from the UK, the Netherlands and Panama. And if success stories like this can arise from such disparate and distant locations, then there is no reason why a strong local association between the Nordics and Baltics can’t yield more and more examples in the years to come. 

Stronger together 

“The first time I used the phrase ‘the new Nordics’, it was a bit of a reaction to my time at Skype, from seeing the progress occurring across Tallinn, Vilnius and Estonia – progress that seemed similar to the ecosystems I was now monitoring across Copenhagen, Stockholm, Helsinki, and so on,” said Lagier. 

“Now, I feel even more strongly about the term itself, for many reasons. From not just a tech development, but also from a cultural standpoint, it makes far more sense for associations to be built across the Nordics rather than Eastern Europe to the other side of them.” 

Lagier points to a situation in recent months in which Denmark has deployed hundreds of soldiers to Estonia to help secure democracy in that country.  

He added: “It’s all part of a pledge towards securing and promoting our neighbouring Baltic friends. There is a relationship and ties that span society, politics and business. And we can play our part by championing one of their most impressive exports in the form of technology.” 

In byFounders’ aim to further promote and champion the new Nordics, but not just with funding ideas, but building bridges between complementary skills and talent, the hope is that these exciting tech ecosystems will grow as close in business as they are geographically.  

Lagier concluded: “Quite simply, as a new Nordic region working together, we can go much further than we can alone.”

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