Highlighting December’s Most Significant Investment, Exit and Story

We dig deeper on a VC going back into entrepreneurship in a hot new vertical, a rather quiet exit to one of the World’s biggest tech companies and the birth of a new fund in Iceland.

 

The Investment

Danish eSports agency RFRSH Entertainment has raised 4 million euros

Image from Trendsonline.dk

There were a few reasons we picked this over some larger investments from December:

  • eSports in the Nordics continues to attract interest and investment, and was one of, if not the breakthrough vertical in the region in 2016. At one point eSports accounted for 6 of the last 7 gaming investments during a spurt in popularity in Q3. (Again, see Nikolaj’s talk as to why eSports is such an attractive investment opportunity)
  • A trend I’ve noticed across the tech world recently is that VCs appear to be willing to back companies that won’t scale (or are hard to) such as agencies, when new verticals pop-up. This is largely due to early land-grab and revenue opportunities that are more prescient at the beginning of a new industry. This rather goes against the typical VC philosophy of backing things that easily scale. But it’s not just eSports, I’ve also witnessed this in bots and voice, and expect this ‘trend’ to continue as investors look to get involved in new areas, backing people rather than ideas being the main investment thesis, trusting them to figure out how to scale as the verticals evolve.

 

The Exit

Denmark’s The Eye Tribe were acquired by Oculus (Facebook)

This was an odd one, and in truth one we are yet to get to the bottom of, however, I am certain that there is more to this story than meets the eye (pun intended).

An Update From The Eye Tribe

Thank you for supporting The Eye Tribe and ordering the world’s first truly affordable eye tracker. It is customers like you that have helped us get to where we are today.

Unfortunately, we’ve decided to go in a different direction with our technology and will stop development of our products. We thought you should hear this news directly from us. We thank you for the time you’ve spent in discussions.

-The Eye Tribe Team

After sending that email to their customers on December 16th which most interpreted as a message that they were folding, on December 27th tech blogger Robert Scoble reported on Facebook that he’d heard that The Eye Tribe had been acquired by Facebook.

Kenneth Dambo, a VC at Northcap (and subscriber) checked the Danish Business Register and confirmed to Robert and myself that Facebook Overseas Inc was indeed listed as the new owner.

At this point, the world’s tech media descended on the story and reported that Oculus had indeed confirmed that they had acquired The Eye Tribe for an undisclosed sum in order to bring eye-tracking capabilities to their VR headsets.

The lack of fanfare, or even mention of Facebook in the original email to customers is a little odd, especially as the Danish Business Registry lists Facebook as the official owner from 15th December the day before the email went out (although of course there could have been reasons on Facebook’s side for this) but even so, the whole way this story unfolded doesn’t sit right with me.

Whatever the details, even if it was a case of Facebook picking up a failing startups assets on the cheap, it’s always significant when one of the World’s biggest technology companies goes shopping in the Nordics. And for those that only look at the headlines, it can certainly inspire and motivate others, and that’s something we have no issue with.

 

The Story

Former NSA Ventures investors raising new early stage fund: Crowberry Capital

 

In Iceland, Helga Valfells, CEO of NSA Ventures, and two of her colleagues, investment managers Hekla Arnardóttir and Jenný Ruth Hrafnsdóttir, are leaving NSA to found their own fund. Their aim is a 5bn ISK/$42m fund, focusing on early stage companies (from Northstack)

The Icelandic scene is an interesting proposition right now, with this the latest in a string of new funds that have been established/raised in the last couple of years. Crowberry Capital will be focusing on early-stage investments in Iceland, competing with Frumtak in this space.

As Kristinn of Northstack points out in The Memo, this is a strong bet on the fact that Iceland is still lacking capital to fund their startups rather than the fact that there isn’t enough quality companies to invest in. This remains to be seen, however with just a solitary investment in the Icelandic scene in Q4, one of those statements appears to be true.

From what I hear and see though, Crowberry Capital may just be right with their hypothesis, as I have continued to be impressed by the companies emerging from the Nordic’s smallest country in the last 12 months (particularly in VR) and have also been hearing positive noises from investors visiting Icelandic Startup’s demo days as to the quality of the companies.

The fund has already received several commitments and expects to close this year.

Neil S W Murray founded The Nordic Web in 2014 in order to provide the Nordics with the quality coverage it deserves. As well as being Founding Editor of The Nordic Web, Neil is also an active community builder in the region, participating in a number of initiatives, and has previously worked for Tech.eu.