Investment Initiative

The Goals of the Initiative

• Accelerate the formative phase of innovation companies and strengthen their governance.
• Encourage applications from startups across the whole country
• Attract additional investors, thereby boosting angel investment
• Strengthen knowledge industries — the “fourth pillar” of the Icelandic economy

Eligibility Criteria

The initiative is intended as an early-stage investment in companies working on either technological or market-driven innovation. The idea must demonstrate strong growth and export potential, and the company must be Icelandic and operating in Iceland. The investment should either represent the company’s first financing round or be among its earliest.

Focus on early-stage companies. Key Conditions:

• The business idea must be scalable, innovation-driven, and with export potential
• A realistic business plan must be in place
• The company must be registered and operating in Iceland (private limited company, ehf) with an Icelandic ID number.
• Projected revenues must be below ISK 50 million in 2025 (excluding grants).
• Total financing to date must not exceed ISK 100 million (excluding grants)
• At least an equal matching investment from private investors on the same terms

Advantages (not a condition). It is a benefit if the applicants: 

• Have received confirmation from Rannís according to Article 5 of Act No. 152/2009
• Have received a grant from the Technology Development Fund or another source during 2020–2025
• Have participated in a recognized business accelerator during 2020–2025
• Have a core team composed of a mixed (gender) group with backgrounds, experience, and expertise relevant to the project

It is worth noting that these represent general guidelines and frameworks, and the Investment Board of the Innovation Fund Kría may adjust the criteria or application process if necessary..

Matching equity investment - Key Criteria

• The primary requirement is that the company secures at least an equal contribution from private investors.
• Existing commitments (e.g., founding capital) do not count as matching funds.
• The matching contribution must always be in the form of capital — work contributions or debt write-offs do not qualify.
• It is an advantage, but not a requirement, for a company to have already secured financing commitments when applying to the initiative.
• If a company has not secured investor participation at the time of application, it has a maximum of six months to secure the matching funds.

Implementation of the Initiative

• NSK financing will be in the form of convertible bonds.
• The bond must be converted into equity within 5 years of issuance, otherwise repaid with interest.
• Conversion price: based on the first share capital increase after issuance, with a 20% discount.
• A valuation cap (CAP) of ISK 500 million will be applied to participating companies.
• The bonds carry 10% annual interest, compounded annually.
• NSK and private investors participate on equal terms.
• NSK manages and covers the cost of bond issuance.

The Application Process

Application deadline is October 20th 2025, and applications are submitted via: www.nyskopun.is and must include:

• Information about the company
• A video presenting the project and the team (maximum 1 minute))
• A PDF slide presentation (maximum 8 pages) including:
  
  • The idea: Novelty of the idea, uniqueness of the product, and business plan
  • The market: What problem or need is being addressed, competition, and market size?
  • The team: How strong is the team behind the project?
  • Scalability: How feasible is significant growth (scale-up) of the project?
  • Financing needs: How much funding is being sought, and how will it be used?
  • The 2024 financial statements and confirmed RSK registration
  • Shareholder list

 In short, the process is as follows:  

1. Applications must be submitted before the application deadline.
2. The Investment Committee of the New Venture Fund, Kría, together with a three-member advisory group of experts in innovation and/or start-ups, evaluates the submitted applications..
3. Selected companies will be invited to present their company, team, and project at a dedicated meeting.
4. Following the presentations, the projects that stand out and best align with the initiative’s priorities will be chosen and invited to enter into investment negotiations with the fund.
5. The Investment Committee will present the results to the fund’s Board and recommend investments of ISK 20–30 million per company.
6. Upon Board approval, agreements will be finalized for the fund’s participation, provided that the companies have secured matching co-investment.

The New Venture Fund, Kría, aims to announce its investment decisions for individual companies in this round by the end of November 2025.

Follow-Up with Selected Companies

• Responsible corporate governance, including:
  
  • One of three board members must be independent and approved by NSK
  • Fund staff will provide support and assistance but will not take board seats
  • Board meetings must be held regularly

•  Reporting Requirements: ‍
  
  • Companies must comply with information requests from the fund
  • Annual accounts and minutes from the annual general meeting must be submitted by September 1 each year
  • Status meetings with NSK will be held as needed

•  Investment Rights:  ‍
  
  • NSK may, in some cases, provide follow-on investments in selected companies. Such investments will not be made earlier than 12 months after the fund’s initial investment.

Additional information

• Investment Policy (in Icelandic)
• Finalization of the investment (in Icelandic) 
• Follow-up with the Companies (in Icelandic)