Countries across Europe are currently watching the Swedish government with great fascination as it continues to power through with its COVID-19 strategy, which looks very different to that of other countries. International media in particular are indeed reporting on how people in Sweden are going about their lives with relative normality, with most schools, cafés, restaurants and gyms still open.
Nobody has the answer to how successful (or not) governmental restrictions in Sweden will turn out to be, and I’m certainly not the one to speculate on this matter.
But as a Swedish entrepreneur I do want to share a little bit of insight into a lesser discussed area, namely, what it’s like to run a startup company in Sweden during the pandemic, and what support is provided for startups at this time. Equally important, I want to highlight a few examples of the startup, business and VC ecosystems coming together to create new solutions that can help some of the problems associated with the pandemic.
My company, Bokio, is a Gothenburg-based tech startup which makes an AI-driven software tool for accounting and bookkeeping. With a large chunk of our Swedish users consisting of SMEs and startups like ourselves, we always have a finger on the pulse of this community, and it didn’t take long until we found ourselves flooded with questions relating to COVID-19 and its potential impact on Swedish entrepreneurs.
It’s worth mentioning that most Swedish companies have had generous WFH policies in place, with many offering flexible work hours, since long before the crisis. A significant contributing factor is that Sweden is privileged with great connectivity, with telco networks reaching high up the mountain tops and covering the most remote of areas, making it easier to work from outside of the office. As such, moving a business into full remote-mode in response to the pandemic has been relatively seamless for most.
However, other issues facing startup companies around the world, such as cash flow problems, disrupted supply chains and efficient deployment of staff, are all ones also affecting Swedish startups.
Here are some of the key aspects of the government’s national support package offered to companies, including most startups:
- Option to postpone payment (of some) taxes – In addition to a heavily reduced deferment of interest, companies that are financially affected by the COVID-19 crisis can now apply for a tax payment respite, and postpone part of their tax payments for up to a year.
- Reduced social fees – For up to 30 people and only applicable for salaries of up to a certain amount, this gives business owners the option to temporarily reduce their employers’ social security contributions for team members between March 1st and June 30th 2020.
- New regulations and allowances for short-term layoffs – To prevent more permanent staff cuts and help keep businesses afloat during the crisis, the government has stepped in to cover part of employees’ salaries, entitling these to up to around 90% of their monthly income, even in cases when working hours are reduced to 60%.
- Reimbursement for revenue lost – On 30th April the Swedish government announced a financial support measure aimed to soften the blow of revenue lost due to COVID-19. This is applicable for businesses that declared a revenue of at least 250,000 SEK during the last financial year, and that can prove a reduction in revenue of at least 30% during March and April in 2020, compared to 2019. The reimbursement depends on the size of revenue lost, and will vary between 22.5-75% of a company’s fixed costs for March and April (excluding salary cost) with a maximum amount of 150,000,000 SEK per business.
While these measures will certainly be of help, we hope to see even more support put in place, in particular for the very smallest and the youngest of companies, as some of these are not eligible for the above.
Meanwhile, the VC, startup and business communities in Sweden are really pulling their weight to make a difference, and are moving fast to launch some truly amazing initiatives and projects. Just to name a few:
- Hack the Crisis – An initiative by the Swedish Government, but powered by some of our country’s smartest developers, designers and innovators, virtual hackathon, Hack the Crisis, was held at the start of April. With anyone welcome to take part, the aim of the event was to develop digital solutions aimed to save lives, communities and businesses. The winning solutions, including one developed by our very own designer Fredrik Andersen, are available here: https://www.hackthecrisis.se/winners
- Action Against Corona – Set up in mid-March by Norrsken Foundation in collaboration with Swedish financial newspaper, Dagens Industri, Action Against Corona (AAC) provides funding and grants for initiatives providing a solution to problems relating to the pandemic. Grant applications from scientists at academic institutions currently working on a COVID-19 related project are reviewed in less than 48 hours (!) with approved grants of up to $500,000 paid out almost immediately.
- Free taxi for carers – Last month, ride-hailing app, Bolt, announced a collaboration with VC firms, Creandum and EQT Ventures, to sponsor free rides for Swedish medical personnel to get safely to and from work. A really important initiative to ensure our carers are protected and looked after during this difficult time.
- Corona testing – Set up in a matter of weeks in direct response to the pandemic, Swedish medtech startup, ABC Labs, is moving fast to get self-testing kits to Swedish homes, in collaboration with telemedicine startup Kry. It is fantastic to see some of the brightest minds of the Swedish startup and business world come together to back the company, with funding already secured from the aforementioned ACC and individual investors including Mojang co-founder, Carl Manneh, Creandum General Partner, Johan Brenner, H&M heir, Carl Tham, and Kry co-founder and CEO Johannes Schildt.