As many markets struggle to find ways to attract employers that will in turn bring in new residents, new, innovative models will be necessary. The excitement for what this venture capitalist group is doing overseas demonstrates potential for new solutions.
Stockholm has enjoyed its years in the sun as a startup hub. The Swedish capital has the second highest number of unicorns – billion dollar unlisted tech companies - and the most startups per capita after Silicon Valley. But high office rents could threaten that.
Prime office space in Stockholm can cost up to 8500-9500 SEK a square meter ($875-1040). Figures from Danske Bank show that rents for Stockholm’s top locations have increased by 67% over the last year.
There is also a shortage of affordable housing in a city where Goldman Sachs says that house prices have gone up by 50% since 2012. Rental property is in acutely short supply.
In 2016, Spotify cofounders Daniel Ek and Martin Lorentzon published an open letter in which they said that they would have no choice other than to go abroad to recruit the thousands of people they would need, if the Swedish government and city authorities failed to tackle a number of obstacles, including the shortage of affordable rented housing accommodation.
So the news this week that the venture capital investors Wellstreet are launching The Factory, the largest tech and innovation hub in the Nordics, just north of Stockholm created so much interest that even Wellstreet's cofounders were taken by surprise.
"This is one of many solutions to the problem with Stockholm's inner city focus,” says Mikael Wintzell, CEO and cofounder of Wellstreet and a former Director of Commercial Operations at Klarna. “That, coupled with the constant issue of finding housing for talent, and the expensive rental cost for office space, are the main reasons why we’re making this move."
The 14,000 square feet building in Sollentuna originally built for ABB in 2002, will accommodate up to 100 startups. Expected to be ready by Spring 2019, the ground floor will include an atrium, a gym, and restaurants. Two of the six floors will be home to innovation labs, while Wellstreet will occupy 1800sq meters on the sixth floor.Read More