READ ABOUT OUR ENDEAVORS IN THE EAST: NORDIC INVESTMENT IN TECHNOLOGY AND TECHNOLOGY EXCHANGE WITH CHINA

I want to begin by thanking you all for having me here today. It is an honor to speak to you and represent my company, Haflo, in Tianjin, China. I will start by telling you a little bit about us. Our investment company Haflo, is a Swedish family fund, and we are a team of four people, of which I am one. Haflo was founded by my Martin Hauge a few years ago, with the purpose of supporting and financing technology innovation around the world. Martin is one of the early partners of Creandum Venture Capital, one of the biggest and most respected venture capital firms in the Nordics. When Martin left Creandum he didn’t want to stop supporting innovation, instead he decided to invest his own money, gather a team, and leverage his connections to create Haflo. Today Haflo is invested in 6 innovative and inspiring startups, 9 funds with a brilliant network to accompany each one, and has successfully exited one company making 100x return on the investment.

Today we are working hard on expanding our global network, because it is through our network that we get access to the best startups and funds. I myself am Peruvian-American, which you may find particularly surprising since I look like I came from straight from the Nordics. I grew up all over South America and the US, and I was recruited for the Haflo team right out of college. I attended NYU Shanghai, the first American college to receive independent registration status from China’s Ministry of Education. I was part of the inaugural class and graduated with a degree in Business and Finance. While moving around hasn’t always been easy, it has given me a desire to meet and befriend people wherever I go, so please feel free to talk to me after my speech, as I would love to meet you.

At Haflo we receive deal flow from our marketing efforts, funds, network, and startup events that we attend. We receive pitch decks from around 15 startups per week. We pick the best ones from the pile, and analyze them from the market to the team. We call this process of analysis, hot listing. We boil the details down to one slide, so that we can easily present the case to each other. We meet weekly to discuss these new cases, and give updates on our portfolio. When we see areas that may need improvement, we strategize and see what solutions we can bring to our startups. We are also very hands-on with the deal flow form our funds and analyze the pitch decks they receive in addition to our own. To keep up with market trends, we are frequent Crunch Base surfers. I receive emails of all the new deals in my geographical area of interest, and summarize them for our weekly meetings. This way, we all keep on top of the trends, so we know whether or not a startup is entering the industry at the right time. 

Now I may be one of the youngest investors at the event, however it doesn’t stop me from analyzing great companies and applying my worldly knowledge to the equation. When we receive a case at Haflo, we go by the motto “You don’t find a billion-dollar company, you help build one.” Which is why we place a significant amount of emphasis on getting to know the team. You always have to make sure that you invest in a team that you can work with. I must say I have great millennial stalking-skills, and I look at every detail from the CEO’s Instagram vacation photos, to the engineers Facebook updates from 2011. Now I know this sounds excessive, but when we invest in a company, we represent the company as much as the CEO does, and we make sure that the companies we invest in, have the best players on their team. We also look at everything else surrounding the startup, and ask the important questions. Are they solving a problem? Does the problem have a global and billion-dollar market? How fierce is the competition, and how does this startup differentiate itself? Through our careful due diligence and detailed checklists, we have been able to pick the best startups that come our way. In the Nordics we have the benefit of having a strong network, which is why we get access to the startups and funds we have in our portfolio. However, we are ready to move beyond Europe, and make connections in the East, which brings me here today.

We are currently looking to expand to China, because we believe Chinese innovation and technology has the potential to give us great return on our investments. China is at a point in history where its technological innovation is unbeatable. With extraordinary companies like Tencent, Alibaba, Baidu, Xiaomi, and Didi, among many others, Chinese innovation is peaking, and we want to jump on the fast train. This brings me to my topic of discussion today: Nordic investment in technology, and how an exchange of technology between the Nordics and China can be mutually beneficial.                                                                                         

Now I am not sure if you know this, but the Nordics have been named the biggest unicorn factory in the world relative to their market size. The Nordic region is home to about 25 million people, nearly the same population as Shanghai’s 24 million. Now when I talk about unicorns, I am not talking about mythical creatures (although it would be pretty cool to be the biggest mythical creature factory as well), I am talking about startup unicorns, the name we give companies that are valued over $1 billion dollars. According to Business Insider, over the last five years, we “have seen at least one billion-dollar exit from the Nordics per year,” making the average total annual exit value for the Nordic region $4.1 billion. And what is the key to Nordic startup success you might ask? Expansion. Simple as that. Since Nordic markets are fairly limited, companies expand early on, and find success internationally. Our small markets give companies the chance to test their products, become successful locally, and then hit a home run when they expand. This brings me to China.

It is hard for most people back home to grasp the vast market opportunities that exist in China. I myself spent four wonderful years in Shanghai, and I can tell you, the first time I stepped foot into People’s Square was one of the last. The magnitude of consumers is something that impresses me the most about this great country. I remember sitting at my desk at NYU Shanghai, and waiting to press enter on my shopping cart as soon as the clock struck midnight on November 11th.  I was not alone in this, as singles day generates an astounding $25 billion from consumers across the country. During my fourth year of college at NYU Shanghai, I went to the first phase of the Canton fair and was even more impressed by China’s ability to produce technology in such great quantities. Those years I grew a deep Guanxi with China, and I felt as though a part of me would stay in this country forever.

Now my goal is to create Guanxi between the Nordic and Chinese venture capital industry. Guanxi can be “best described as the relationships individuals cultivate with other individuals.” But I for one know that Guanxi goes a lot farther than networking and adding someone on LinkedIn. Guanxi carries elements of trust and loyalty. Guanxi is not a short-term relationship, it is not a deal with one simple transaction; Guanxi is a shared history of mutually beneficial engagements. And while the Nordics operate a bit differently than China, a relationship between the transparent and straightforward Nordic way of doing business, and the loyal and trusting Chinese way of doing business can be complimentary and favorable.

I would like to use one of our startups as an example for how Nordic innovation can solve one of China’s biggest growing problems: social isolation. It was often during my time in Shanghai that I found myself among a group of elderly women in a park, dancing to a boom box. The women, and some men, would laugh and smile as I stumbled to keep up with their moves. These experiences are a part of Chinese culture that are so endearing and close to my heart. However, we cannot deny that there is a sad reality that lays beyond the smiling faces of the elderly in China. There is a growing social isolation of this particular age group, with not many solutions to turn to. According to a study provided by the Oxford Journals, 28% of the elderly in China report feeling socially isolated. Social Isolation has been found as a key risk factor in health and earlier mortality. In Norway, Karen Dolva, CEO of No Isolation found that we had a similar problem. The elderly population is growing more and more marginalized by their working children and busy neighbors. It is not often that people stop and take the time to check in on them, or find time to come up with a solution. This broke 27 year-old Karen Dolva’s heart, and as I speak to you today, she is having a launch party for No Isolations second product, KOMP. In Karen’s research, she found that a lot of technology that exists today is not elderly-friendly. Tablets, smartphones, and even computers are hard for people to use if they weren’t assimilated into their lifestyle early-on. This is why Karen created KOMP, a computer with just one button that helps connect elderly people to their families. Their families can call them, as the KOMP acts as a telepresence robot, they can send them pictures, and videos to make them feel connected again. This is also ideal for seniors with dementia and a weakened eyesight, since the KOMP is built with their needs in mind.

Now, No Isolation started with the goal of providing solutions to all people suffering from involuntary isolation. They broke down these people into groups they felt needed the most attention, and started with children suffering from long-term illness. Their first product, AV1 aims to bring children suffering from long-term illness out of involuntary isolation through a telepresence robot that takes their place in the classroom. This way children can be in the classroom even if they are at home or in the hospital. KOMP is only their second product, but the research team at No Isolation has identified various groups of people, in need of a solution to their involuntary isolation, and is working on creating products that address their needs. My dream is that one day I will be able to help No Isolation expand to China to connect people in isolation to their friends, family, and loved ones. Solutions like KOMP can make a huge difference in the lives of these people, and by broadening my network in China, I am positive that I can make it happen.

Now I would like to use another of our portfolio companies that we invested in earlier this year, as a way to draw attention to a trend that China has yet to take full advantage of: Flying cars. Now I know this sounds very futuristic, but in reality its an arms race, and it is only a matter of time before these cars become autonomous and legalized. Over the last few months I have been seeing headlines like “Uber’s ‘flying cars’ could arrive in LA by 2020,” and “Volvo’s flying car launching in 2019.” Among the headlines is our portfolio company, Slovakia (Eastern European)-based Aeromobil. Slovakia has a huge automotive industry already. CEO Juraj Vaculik came to us in 2015, with a soul full of dreams and a mind so brilliant, we almost lost track of the due diligence stage. Since then his flying cars have been on Forbes, CNN, Fortune, The Telegraph, and just about every other major news source. Haflo wants to introduce Aeromobil to China, because we believe it is a way for us to merge our European technology, with China’s, and particularly Jingjinji’s strengths in aviation and the automotive industry. My dream is to see our Aeromobil cars flying in China by 2020. Hopefully the connections I make here in Jingjinji will make this possible.

With that being said, I hope I have peaked your interest in European and particularly Nordic innovation. As much as we want you to come and explore the Nordic venture capital scene, I also want to explore Chinese investment opportunities. With China’s great advancements in artificial intelligence, robotics, software, and engineering, I hope to introduce Haflo to some good investment opportunities in the mainland. We are looking for great entrepreneurs with big dreams.

I will finish today by welcoming you to the Nordics and our great startup scene. I hope this is the start of a new relationship between our nations, full of opportunity and high returns.

Sophia A. Noel

Haflo ArticlesSophia Noel