Hardware startups require formal backing to make a big social impact
Hardware startups are a challenging and expensive venture. Yet, when they are successful, they hold the potential to become large-growth businesses whose innovations benefit society as a whole. That is why the Danish Tech Challenge has focused its efforts on helping more hardware startups to emerge and become established
For those young startups that want to be included in the accelerator ‘Danish Tech Challenge’, located in Kgs. Lyngby, it is not enough to develop the next web shop or sharing economy platform. Their focus must rest squarely on hardware and heavy technology. Among the 20 startups that comprise the latest class of the Danish Tech Challenge (DTC), one has developed insulation made of eelgrass and another has created a 3D nano-printer. Over the past 5 years, the DTC has established itself as the most significant accelerator of its kind throughout Denmark. This has much to do with the fact that it received a large grant from the Industry Fund and awarded a prize of DKK 500,000 to the winner of its latest competition.
Camilla Gilbro is the program manager for Danish Tech Challenge.
According to Camilla Gilbro, the program manager for the DTC: “In addition to competitors being able to win half a million Danish kroner, we can use the competition element to push the companies to raise their game. We know they can and with that carrot we can push them.” Not only is the DTC enjoying recognition in the entrepreneurial ecosystem, its impact is being felt across industries.
A core focus on hardware
In Denmark, it is not an overstatement to say that software startups can hand-pick from a wide variety of programs across industries. For that reason, the DTC was established to bring hardware companies together under the same roof so that they can learn from, inspire, and push each other. Gilbro explained: “The reason we focus exclusively on hardware is that there are completely different challenges in making hardware than in making software. There is also a longer way to the market and there are often greater risks and greater capital demands.” Moreover, most hardware startups have a software component that doubles their challenge.
The reason we focus exclusively on hardware is that there are completely different challenges in making hardware than in making software
Camilla Gilbro
The potential is huge
While the road to the market is long, those young startups who succeed in getting there can quickly move their technological products into the physical world. This allows for tremendous company growth. When the DTC first opened its doors, it was the only hardware accelerator in Denmark. Since then, several initiatives have cropped up in the form of both programs and investors. Still, the level of investment and involvement is a far cry from the efforts in software. In Gilbro’s words, “If you look at programs that are specific to software companies, there are certainly a lot – and in every possible specialization. Hardware startups have a longer way to market, but with their heavy technologies they can really move things, so the more help they can get the better.”
Measurable results
Now that it has 5 years under its belt, theDTC can gauge the difference that they are making for hardware startups and evaluate and refine their efforts. In the latest program report, participant satisfaction is high: startup representatives claimed that the program positively contributes to their business development, product development, and networking efforts. Figures from December 2018 also show that – among the 100 startups that have gone through the process – more than 9 out of 10 remain active, which is significantly higher than average. What’s more, they have created 378 new jobs and raised 448 million DKK in investments. Gilbro cautions that it is “… too early to draw conclusions, but we are beginning to see some positive trends. We can see that some of the participants from the first years are really starting to gain revenue and growth. The general tendencies are that companies are more likely to survive and can more easily attract talent and capital.”
