What Does The EU Referendum and Brexit Mean For Swedish Startups?

What Does The EU Referendum and Brexit Mean For Swedish Startups?
By Dennis Engkvist

As lovers of some good old fashioned insight, our team couldn’t resist the chance to play with Brexit. We analyzed the online conversations going on in Sweden immediately preceding the EU Referendum and during the aftermath. In doing so, we’ve looked at over 30,000 Swedish Twitter mentions.

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We, the Swedes were as divided as the United Kingdom. So much so, that the percentage of leave vs remain votes almost matched the split of positive versus negative sentiment on Swedish social media. In Sweden, the far left and right wing supporters are positive to the outcome, and though they don’t embrace it fully, they argue that the EU needs a major reformation.

Those Swedes that do not see the outcome as a victory, but rather a mistake, are venting on social media their worries regarding the economic impact.

Why would this outcome affect Swedish startups?

London has long been the obvious choice for Swedish startups to establish their presence. A truly international hub, only two hours by air, and still part of the EU, until very recently. Prior to 2016’s most divisive referendum, this meant an easy transition for companies wanting to set up shop in London. The fintech scene is particularly big there, which ties in well to the current startup trends in Sweden that focuses on fintech and the sharing economy.

With several Swedish startups at different stages established in England, like iZettle, Billhop and Trustly, the referendum potentially imposes major hurdles in terms of growth.

Recruiting talent across borders risks becoming increasingly difficult, despite Boris Johnson’s assurances of keeping all perks on the table throughout the UK’s eventual departure. Today, moving to England as a Swede is relatively straightforward. While this may well continue as is for the time being, recruiting developer talent from eastern Europe to a UK headquarters could be another story.

Taxation is also a whole other ball game, touching businesses, stock options and income for starters. The changes that could come (as predicted by many analysts) would not benefit a startup with limited resources and an aggressive growth plan.

Of course, the effects of the referendum will take time to implement and evaluate. Swedish companies will not retreat overnight, and neither will the investors. But one aspect that has become certain in the Swedish startup scene is that London, and England, are not the defacto first choice anymore when looking to move forward and abroad.

One positive effect that might come out of the referendum, startup-wise, is that Sweden and the Stockholm startup scene might see potential candidates start to favor Sweden when it comes to looking for technology jobs and settlement.

The talk of the town in Stockholm has turned to that of Berlin and Amsterdam, owing to their cultural similarities to the Stockholm technology scene and fresh crop of young talent.

Dennis Engkvist runs PR and analytics at Observify, a leading social listening and media monitoring solution headquarted in Stockholm, Sweden. His background crisscrosses the Swedish Armed Forces, community management, growth and breakdancing, making him a unique digital strategy veteran.

 

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