VENTURESCOPE

Scandinavia and high tech go together like fish and chips. Which possibly explains why the news section of the website for the Bergen High Technology Center (Hoyteknologisenteret in Norwegian) has a page that is named after this quintessential English dish. Less promisingly, the “Fish and chips” section is still awaiting copy.

Tor Instanes, assistant director at the center, admits that its attention to the website has been poor in comparison with plans for expansion. Hoyteknologisenteret is about to move to new premises with four times the current capacity. While Instanes does not put a number on the crop of firms that have spun out of the science park, he says it has helped promote the work of both biotechnology and marine biology projects in the region.

Despite the center's longevity – it was founded in 1989 – and close ties with the University of Bergen, there appears to be more it can do to help the city grow its profile as a destination for Nordic venture capitalists.

Johan Brenner, a partner in the European team of venture capital firm Benchmark Capital, says that Bergen is definitely an emerging cluster in Scandinavian technology investing, but is not currently “on the Benchmark radar”.

Gunnar Fernstrom, an investment director at InnovationsKapital, a Swedish early-stage technology and life sciences venture capital firm, also says that Bergen doesn't feature in the company's regional focus. However, he does note the work of Sarsia Venture Management, a venture capital fund based in the region.

Sarsia Venture Management is a venture capital firm based in Norway, managing a NOK337 million (€39.8 million; $50.2 million) fund dedicated to life sciences opportunities. According to Thomas Grünfeld, managing partner at Sarsia Venture Management, the firm grew out of the Bergen High Technology Center as part of Sarsia Innovation, which also includes a start-up incubator and a seed fund focused on life sciences and energy start-ups in Norway.

“We're now completely separate from the high tech centre and are purely focused on the life sciences fund,” says Grünfeld. “We span out and got investment from Norwegian institutional and industrial investors for the fund, although we also have a Swedish and a Danish investor.”

As well as developing its investment strategy from earlier-stage generalist investments to more later-stage life science financings, Grünfeld says the fund has also moved towards a focus on Norway rather than just Bergen.

“Although we started out in Bergen, if you focus on any industry sector, like life sciences, you have to expand your regional focus at some point, it's just pure mathematics,” he says. As part of this move, the fund, which still has an office in its home town, is now primarily located in Oslo.

Despite its regional shift, the fund currently has six investments, of which three are based in Bergen: NorDiag, a biotechnology company focused on cancer detection which listed on the Oslo Stock Exchange in December 2005; Novel Diagnostics, the holding company of PlasmAcute, an immunodiagnostic business; and UniTargeting Research, a biotechnology company developing protein biopharmaceuticals.

Like many countries in Europe, venture capital investment in Norway has yet to recover from the dotcom gloom of the past few years. According to a study by the Organisation for Economic Co-operation and Development in 2003, venture capital investment in the country in 2000 totalled €285 million, but had dropped to €178 million, with members of the Norwegian Venture Capital Association predicting further gloom at the time. However, in 2005 there was an improvement, according to figures from Ernst & Young: despite a small decrease in the number of deals, the value increased by 42 percent relative to 2004 to €103.8 million.

Bergen, which is Norway's second largest city, contributes a strong focus on marine bioscience to the recovery, with a “very strong community” in the field, according to Grünfeld. “As a life science and technology cluster, though, it's definitely very young,” he adds. “It has strong university connections, but it is very small compared to other Nordic areas like Gothenberg, Copenhagen, Malmo and Stockholm.”

Given the increasingly optimistic outlook for venture capital in Europe, as well as the slow but steady improvement in Norwegian deal flow, the gap to other venture hotbeds in Scandinavia may narrow before long.