Startups attending the final at Danish Tech Challenge earlier this year.

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.”

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What is Snapform?

Bo Esbech, co-founder and CEO of Snapform

When you are an amputee, it is vital for your prosthetics to support your activities of daily living. Since no 2 amputations are the same, the prosthetist’s most important task is to ensure a tailored fit for each patient.

Snapform is developing a technology that can help craftsmen to create prosthetics that fit each patient perfectly.

In Esbech’s words: “Creating prosthetics is a time-consuming craft, where the results depend, to a large extent, on the prosthetist’s experience and abilities. It often takes a series of adjustments to achieve good results. We must therefore move towards a more scientific approach, where – thanks to a sophisticated computer model – we can determine the optimal shape of the prosthesis. This approach also opens a pathway for us to produce prosthetics more efficiently using 3D printing.”

Snapform is currently refining their software engine, and, by the end of 2019, they expect to be able to test actual prosthetics on real patients.

Why are you participating in the Danish Tech Challenge?

“It’s a very traditional industry, so we need training (or what we call “sparring”) to enter the market and get the prosthetists to evolve and work with us on our vision,” Esbech explained. The company also plans to seek investments at some point, and this is where the DTC is helping them to prepare.

Esbech added: “We will probably need funding next summer, and DTC can help us get ready. We receive sparring on every aspect of the business, so every aspect has been closely examined, giving us a well-made case for potential investors. Being a member of the DTC is also a quality stamp in itself.”

What is Optoceutics?

Jakob Hildebrandt, (far right) co-founder and business development manager at Optoceutics

“We are developing and clinically validating light to treat neurodegenerative diseases, including Alzheimer’s disease. Studies show that flashing light can affect brain waves and a specific protein in the brain,” Hildebrandt explained.

The company has a heavy technical team behind it, with competencies in photonics, artificial intelligence, and neuroscience.

As Hildebrandt pointed out: “We know how to construct light that, instead of blinking between on and off, flashes between combinations of colors. That way your eyes don’t perceive that light is blinking, but your brain does.”

In preliminary studies, the solution has shown to be effective on brain waves measured by EEG. The next step is to initiate clinical studies to validate the effect on, among other things, cognitive performance.

Why are you participating in Danish the Tech Challenge?

“The DTC pushes you to look into some parts of the business you might have assessed too quickly in the first place – from product development and supply chain to patents. Participating in the challenge is like a quality assurance,” Hildebrandt suggested. At the same time, Hildebrandt highlighted the unique value of the hardware accelerator. He views it as a good platform to share experiences with other companies in the same field and startup stage, but also appreciates being able to be surrounded by interesting people.

As he sees it: “It’s crucial that it’s a hardware accelerator, so we have some of the same issues as others who are transforming their startup into a more market-mature company. But I also appreciate the people. The other day someone was smearing Nutella on bread using a robotic arm. It can foster some pretty wild conversations across the lunch table.”