Some 17,500 attendees and 2,600 startups gathered at this year’s Slush tech event in Helsinki, to meet, mingle and pitch their ideas, with prime stands taken by large corporations courting the techie crowd.
Computer Weekly asked what Nordic corporations were looking for at the startup event.
“I think there is a change of dynamics in the business. It isn’t only big corporations with all the ideas – often it is startups with the freshest ideas,” said Marco Ryan, chief digital officer at Finnish engineering giant Wärtsilä. “Startups often bring a focus, agility and pace that we struggle to achieve inside large corporations, for perfectly valid reasons.”
This is why Wärtsilä, an 18,000-employee company, which specialises in power sources for the marine and energy industry, is turning to startups to beef up its digital innovation muscles.
At Slush, the company launched a SparkUp Challenge competition for startups, as it seeks new ideas and technologies to reshape smart shipping and energy processes.
It shouldn’t have trouble finding participants, as Ryan estimates there are already thousands of startups focused on process industries. “We need to recognise that not all startups are 18 to 20 year olds with a great idea, but [there are] a lot of people coming out of business with experience in B2B,” he said.
Banks open up
The Nordic finance sector, in particular, has recognised the need for digital innovation. Some of the most prominent Slush stands this year belonged to the region’s banks, such as Nordea, its largest financial group. Nordea used the startup event to launch the public beta of its Open API developer portal.
Announced in early 2017, the portal is part of Nordea’s preparation for the EU’s impending Second Payment Services Directive (PSD2). The service gives external developers and companies access to the bank’s application programming interfaces (APIs), as well as a sandbox environment for testing their services before launch.
Read more about startups in the Nordic region
- Tech startups focused on the enterprise sector are attending the Slush startup event in increasing numbers
- Traditional Nordic corporations are starting to take advantage of the vibrant startup community in the region, and they are changing the way they think.
- Swedish bank Nordea has continued its policy of financial technology (fintech) collaboration by forming a partnership with Stockholm-based payments startup Betalo to expand its mobile offering.
- Consumer-focused technology is just the tip of the iceberg in the Nordics, with some of the most exciting startups in the enterprise sector
“Open APIs enable more efficient collaboration with our partners, both to bring new services to our customers and to reach our customers through various digital channels,” Jarkko Turunen, head of open banking at Nordea, told Computer Weekly.
Third parties have taken note. Turunen said the portal already has more than 1,000 users, some of which are focused on developing enterprise-facing services.
Nordea also used Slush to promote Nordea Ventures, its new venturing programme which is looking to invest primarily in Nordic fintech startups. It is the next level up from the bank’s financial technology (fintech) accelerator programme, which started in Finland in 2015.
Going beyond finance
A short distance from Nordea’s stand, Finland’s OP Financial Group targeted startups by showcasing its OP Lab innovation unit. It develops new digital business and services with internal teams and in collaboration with startup partners.
The services highlighted at Slush included ultrasound payments, mobility services, Facebook chat for ordering a taxi and even a smart plaster cast. The fact these are not all typical financial services is a sign of how the industry is expanding its traditional remit.
“We already define ourselves as a multi-sector services company, not so much as a bank,” said Kristian Luoma, head of OP Lab. “Of course, financial services are at the core of all our services... [but] if we are prisoners of only the current financial sector products, it could end badly.”
OP’s ambitions at Slush were focused on attracting new talent and potential partners. Luoma said his team attends around 80 Nordic startup events a year to keep up to date with the latest developments in the sector: “We want to convey the message that when startups develop innovation, we could be a good partner for them to scale further.”
Increasingly, corporations such as OP are also becoming startup customers, particularly in IT services. Luoma believes an increasing number of startups are turning their interest to enterprise software and B2B services, where potential pay-offs are bigger than in consumer markets.
“We see this on many levels in our industry. There are, for example, regulation technology [regtech] and artificial intelligence startups, and we are a customer to them,” he added. “This is why you shouldn’t be stuck with the attitude that traditional IT providers are enough. The world is changing.”
New startup business
The growth in corporation-startup collaboration is also spawning new business ideas. At Slush, Helsinki-based IndustryHack pitched its hackathons, which help big companies develop product concepts by bringing them together with developers and tech startups for an intensive co-working weekend.
Kristian Luoma, OP Lab
Another take on this was launched at Slush by Danish startup Valuer, with a matchmaking tool for corporations and startups. In Denmark, Valuer already works with big companies, including Danske Bank and Microsoft, but Slush marked its international expansion.
“The ecosystem has developed during the past couple of years, and corporates have seen they can’t do all the innovation themselves,” said Dennis Poulsen, Valuer founder and CEO. “Our customers, the corporates, give us the exact strategy for what kind of startups they want to find, and we embed that information into our search and give it to our agents.”
These agents are people in different startup communities recruited by Valuer to scout for interesting companies. Valuer’s team then vets these startups, adds them to its digital platform, and an AI-based algorithm helps their corporate customers find those most relevant to their requirements.
Regardless of whether corporate digital and IT teams are looking for new technologies, talent or potential customers, their interest in startups is accelerating. For OP’s Luoma, the reason comes down to agility. Big corporations inherently move slowly, and the likelihood is many of their ideas are already being explored by a startup somewhere.
“Then you have the option to develop [the technology] yourself or collaborate with that startup and learn faster. Naturally, we want to be fast, as speed is critical for seizing new phenomena,” said Luoma. “On the other hand, startups’ weakness and challenges are scale, processes and [finding] customers, whereas we have all of those. So collaboration can be fruitful for both sides.”