I-MAGAZINE Interviews Icelandic VC, Crowberry Capital, Founding Partners, Hekla Arnardottir, Helga Valfells & Jenny Ruth Hrafnsdottir

Tell me more about Crowberry Capital?

Crowberry is an early-stage Venture Capitalist fund which invests in technology start-ups across the Nordics. We are passionate about technology and invest in people that build cutting-edge global technology companies. We ultimately believe that the best companies are designed and built for people.

The Crowberry team has managed over 60 technology start-ups, negotiated over 15 exits and made over 30 seed investments. These investments are in a range of sectors including health-tech, fintech, games, B2B SaaS and sustainability tech.  We are always thinking about the future. Whether it be the future of our planet, the future of work or even the future of entertainment.

The Crowberry team has a global outlook, having lived and worked in a total of eight countries on four continents.

Can you provide a brief overview of your team: how did you meet? What shared skill sets do you share?

The founding partners behind Crowberry Capital have worked together for over 10 years, first meeting at an evergreen fund in Iceland where Helga was CEO.

We saw that there was a gap in the market when it came to early-stage funding in Iceland and the other Nordics. We realised that we could have greater impact by founding our own fund.  So we resigned from our very comfortable role with a large team and started out like true entrepreneurs with nothing and raised our first fund in six months.  We remain grateful to our shareholders who invested in our vision and we are working hard to make sure that they receive great returns.

As a team we share the same values. We believe that technology should be inclusive and have a positive impact globally and in our local communities. At the same time, we have very different personalities, skills and interests.  As a team we feel that we are complimentary on many levels. We  build on individual strengths and help each other overcome our individual weaknesses.

One important point as part of business strategy to improve diversity and inclusion is to look outside of existing networks. For example, Hekla and Jenny were hired through external advertising. If VC funds only hire through their personal networks many highly qualified candidates, who are not part of an exclusive network, will never have an opportunity to apply for the role and ultimately VC funds lose out on talent.  

Who are your clients? What important factors are you looking for when you invest?

We specialise in early-stage startups in the Nordics that are at the forefront of technology innovation. When we meet founders there are several key features that we look for in an investment. 

Firstly, we look for a passion and insight into the problem or opportunity the company is founded for. Secondly product vision should be at the core of the company. Finally, the most successful start-up teams are always able to marry deep tech knowledge with an understanding of business and strategy.

Why does Iceland lead the way in gender diversity?

In Iceland we have always had a high proportion of females in the workforce. Due to our small population, we’ve always had an all-hands-on-deck approach to business, so men and women have learnt to work together for decades. Although we are yet to see complete equality in the workplace, we are getting pretty close.   

Women in Iceland have a history of fighting for gender equality. We are proud of this history.

In the 1970´s the entire female population of Iceland went on strike to highlight women’s contribution to society. However, it was not until the early 2000´s that the Government really took action. For the last twenty years, Iceland has been implementing and refining legislation that promotes gender equality and protects the rights of both genders in the workplace. For example, in 2013 Iceland legislated that all boards of companies with 50 or more employees should have at least 40% of one gender on the board.  This has actually led to better recruitment processes as well as a broader discussion around the board table. 

When it comes to entrepreneurs and the start-up scene in particular, we believe that the Nordic attitude and national policy encourages women to take more risk in their careers. This includes affordable quality childcare, free schooling and an accessible healthcare system.  Without this support, women may be less willing to start their own business or go-it alone.

Why do you think gender diversity in business is important?

A tech start-up’s main goal should be to develop a product that solves a certain problem. This is where the importance of a diverse team comes in.

Diverse teams can understand an array of challenges and therefore work together to develop a range of solutions. Once the development process has started, empathy and the ability to listen is as important as product building skills.  An important element in building a successful start-up is to have an open dialogue both with the customer and employees. We believe that diverse teams encourage rich debate and interaction.  A whole host of academic studies have also proven this to be true.

What can other countries do to improve gender diversity in business?

This is a big question to which there are no easy answers.  

We can point you to the way Iceland legislated for equal pay and diversity in the boardroom, this has proved to be effective. When this legislation was first introduced it was very controversial – however it seems to be working and it is not questioned today. 

Ultimately the only way to increase gender diversity in business is that companies realise that diversity makes economic sense, both on a micro and macro level. Businesses can of course only test this theory through diverse hiring and promotion policies. The decision has to come from the top. 

The majority of VC funds in Iceland are led by women, why is this?

It has only been in the last 12 years that women have gained prominence in Iceland’s VC scene. After the financial crisis 2009, the CEO of the evergreen fund decided that it would be time to hire women in the industry. Two women were hired and that got the ball rolling. One of them was Helga and she again hired more women.  Now 12 years later, all VC funds in Iceland see that in order to be competitive in the market you need to think about diversity. Now all of the funds have hired women into their teams.

What does a female-led VC fund provide clients?

Ultimately a female-led fund should be no different from a male-led fund. Yes, they may appear more approachable to female founders but diversity is key. It is important that investors are open minded and embrace diversity.

Companies of the future must solve a variety of problems faced by people around the world and embrace different opportunities. If only a small group of men from Silicon Valley take all the investment decisions then we are afraid that the world will become far too homogenous.

What can other countries do to improve gender diversity in VC funds in particular?

When we launched Crowberry, the industry did not seem to be addressing gender diversity in VC funds. Now, we’re pleased to say, it is an important consideration.  Most VC funds, especially in the Nordics, have taken action and are hiring women at the partner level. It is important that women sit at the table when investment decisions are made and are active in the deal making process. 

When we look at increasing gender diversity in venture capital, we need to focus on the institutional investors. They ultimately make the decision to invest and which funds to invest in. Diverse partners invest in diverse teams. If this encouragement comes from the top it expedites the whole process.

In the meantime, we have to continue to highlight the importance of gender diversity and the value created from diverse teams.  

Any other stories or case studies that showcase your work with women and female leadership?

Female and mixed start-up teams in Europe are only getting a very small percentage of venture capital. In 2020, 91% of all venture capital investment went to all male teams. Some investors say it’s a “pipeline” problem and that over 90% of the founders they meet are male. At Crowberry we do not believe in this “pipeline” problem. We feel that it is important to be accessible to both genders.

We also like to measure how accessible we are to different kinds of individuals and teams. We actively monitor gender diversity rations within our teams and our numbers prove that for us at least there is no pipeline problem in tech.  When we look at the Crowberry portfolio, over 30% of the founders we meet are female and 40% of our investments are in all female or mixed teams. 

We spend a lot of time with founders before we invest. We listen and build relationships understanding their ideas and where we believe we can add real value. At the end of the day, we all want to make them successful and taking the team to understand the ideas and the team is critical. We want to ensure they are ready for this investment too. This two-way relationship is key to our success and we know that it helps many female founders that we already work with.