By Romain Gauthier, Global VP – Grow with SAP for Scaleups
Scandinavians stand tall as a beacon of sustainable innovation, fostering an environment where climate concerns catalyze ground-breaking developments. According to recent Nordic Innovation Studythe region has attracted 30% of European climate tech funding since 2015 – with most going to B2B-oriented manufacturing businesses and deep-tech startups.
Scale-ups, particularly at high valuations, need to reposition their business model to drive revenue and profit growth while incorporating sustainable practices at every stage of expansion.
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However, most of these start-ups rarely grow to scale, even though Denmark, Norway, Sweden, Finland, Iceland, the Faroe Islands, Greenland and Åland rank above average for start-ups companies. In fact, of the Organization for Economic Cooperation and Development (OECD) reports that around 95% of Nordic scalers have chosen not to expand outside the region for 10 years or more without realizing their full potential.
While aspiring to create a more sustainable world, these ventures are quickly realizing that they need a better way to navigate industrial, operational and financial complexities. For example, building a resilient, local business network and identifying suitable new locations for growth requires strategic planning and significant resources. Furthermore, the cost and number of employees associated with supporting such expansions – financially and operationally – can create overwhelming barriers.
Cultivating a green vision with entrepreneurial dynamism
Innovation hubs and research centers promote developments in the renewable energy sector with companies such as Northvolt spearheading efforts by giant factories to efficiently produce electric vehicle batteries. And many more emerging entities across the Nordic region mark a diverse landscape of thriving eco-innovation.
Unfortunately, however, not all scaleups have realized such success. Instead, they face a complex mix of challenges when expanding into different markets in the region and around the world. They include the potential loss of skilled workers, increasing investment needs in real estate capital assets, the costs associated with identifying suitable new locations, and the challenges of building a resilient, local business network.
The key to catalyzing growth is having a strategy that smooths the transition into new territories with financial discipline, a dedicated workforce, and continuous product and business model innovation. Scale-ups, particularly at high valuations, need to reposition their business model to drive revenue and profit growth while incorporating sustainable practices at every stage of expansion.
For the emerging leader in sustainable lithium-ion batteries Battery FREYR, this approach provided the comprehensive and scalable technology foundation to support the initial public offering (IPO) and its expansion in the United States. The company now has access to data throughout its production processes, giving its people rich insights to help it continuously improve its operations and solutions in line with its sustainability goals. In return, it can support consortium initiatives by quickly bringing new gigafactories online, adding new functions with ease during periods of critical growth, and running compliant financial and procurement functions.
As evidenced by FREYR Battery’s experience, the adoption of a unified cloud-based business system provides the need for lift scalers to cross the gap to market saturation, steady expansion, continued profitability and, if desired, a strategic exit .
In one IDC Business Value White PaperSurveyed tiers and companies backed by venture capital or private equity investors reported significant advantages, including:
- Leverage business data in a more timely and effective manner to positively impact business decisions and results
- Increase operational efficiency across all lines of business by minimizing delays and errors and providing data-driven insights
- Delivering better business results by quickly turning around operations to meet customer demand and deliver higher quality products and service experiences
Forging a sustainable legacy of economic prosperity
For the Nordic region, nurturing the growth and expansion of green spaces is not just an economic endeavor. it is also a collective promise to shape a future where innovation thrives in harmony with the planet. But rising ambitions and an admirable startup culture aren’t enough to lay the foundation for that legacy.
Ecoscales also need the right foundation of technology, processes, people and sustainability practices to overcome the barriers that limit them to the region. This provides attractive business models, targeted products and services, and experiences that touch the heart of every customer who wants to do their part to create a greener, more sustainable future.
With each milestone achieved, each sustainable initiative embraced and each global footprint expanded, these green scales can shape a future where prosperity and sustainability are intertwined for generations to come.
Want to know how scaleups like Northvolt and FREYR Battery are reaching new levels of growth? Explore GROW with SAP’s offer for scaleups.
