Kara Connect emerged as the top bidder in a European Union tender concerning access for thirty institutions to a digital wellbeing platform over the next four years. The contract secures revenues of several hundred million ISK for the Icelandic tech company. This is stated in an interview with Þorbjörg Helga in Hluthafinn. With permission from Hluthafinn, the interview is republished here as Kara Connect is one of the companies in the portfolio of the innovation fund Kría.
“These are thirty offices within the European Union, including the European Investment Bank, that joined forces in this tender. It aligned well with our service, which involves building a wellbeing platform: giving employees access to specialist wellbeing services,” says Þorbjörg Helga Vigfúsdóttir, founder and CEO of Kara Connect.
The contract runs for four years and is valued at €2.7 million, or just under ISK 400 million. Reflecting increased tensions between the United States and the EU, strict conditions were set that no data could be stored in the U.S. The Icelandic tech company therefore had to replace four American support systems it had previously used in order to participate.
Kara Connect’s technology was originally built to connect healthcare specialists with individuals seeking professional assistance. The company designed a digital workspace for specialists, enabling them to manage in-person and remote appointments, record sensitive data, and process payments with a strong emphasis on data security.
The company collaborated with hundreds of specialists in the welfare sector, including psychologists, nutritionists, sleep consultants, and occupational therapists. However, it proved difficult to convince these professionals of the platform’s value, even though the fee was only €39 per month.
“With full respect for specialists and their complex work, we had built a highly refined workspace that significantly simplified their operations. We believed they would see that they could build a digital clinic, reduce no-shows, and more, but the value didn’t come across.”
In 2022, the company decided to completely change course. Following that shift, the founders secured equity financing of ISK 820 million. Instead of directly connecting specialists and clients, Kara Connect developed a digital wellbeing marketplace where companies provide employees with access to various specialists and cover session costs up to a certain limit. Employees receive support suited to their needs, in their preferred language, and in complete confidentiality.
Kara Connect’s customers are therefore no longer just the specialists themselves, but companies that see value in offering employees a range of support options, whether related to finances, nutrition, or mental health.
“We are now building something like an ecosystem. We provide the workspace to specialists on these wellbeing platforms, and they are very satisfied being able to serve employees at large companies and institutions. Employees get direct access to services, while HR managers receive anonymized data on team wellbeing.”
These wellbeing platforms are tailored to the needs and culture of each company and connect to thousands of specialists speaking 50 languages. The services focus largely on prevention—helping avoid situations where employees feel forced to take sick leave. Research shows it is very difficult to bring employees back once they go on leave, and currently mental health issues or stress account for 45% of such cases.
“We are at the right time and place. We are seeing strong interest from companies with high security requirements and frontline staff, where pressure is high and access to help is limited. We have achieved good results in Ireland and are now entering the UK, where productivity has declined rapidly and sick leave is increasing,” says Þorbjörg.
After the strategic pivot, a turning point came when Landspítali (the National University Hospital of Iceland) and Orkuveita Reykjavíkur (Reykjavík Energy) adopted Kara Connect’s wellbeing platform in 2022. It was well received in the Icelandic market, and revenues from international markets are now growing. Among recent clients is a large construction company in Ireland with 2,600 employees, as well as another major company specializing in airport operations.
“The companies we speak with are very interested, and the key to selling the solution is demonstrating return on investment to executives and CFOs. Our calculations, based on scientific research, show that the financial benefit of offering preventive services is at least three times the cost. All our platforms show a 3–8x return.”
Kara Connect has reached the milestone of exceeding €1 million in annual recurring revenue last year. These are net revenues going directly to the company, while the total transaction volume on the platform—where companies pay for specialist sessions—is significantly higher.
“That happened late last year, and now a growth phase lies ahead, a very exciting chapter that will undoubtedly bring new challenges,” says Þorbjörg Helga.
The Icelandic tech company, which now employs 25 people, recently secured a €1.4 million loan from Arion Bank, guaranteed by the European Investment Fund (EIF). To qualify, the company had to demonstrate social impact and show a path to profitability. According to its 2024 financial statement, the company recorded a loss of ISK 482 million.The next step:
The growing need for better access to specialists is driven by increasing mental health challenges across Western countries. In the UK, where Kara Connect is currently building a sales team, the proportion of people aged 29–39 dealing with mental health issues rose from 3% in 2010 to 24% in 2019.A similar trend is seen in Iceland. A recent study published in Læknablaðið shows that the proportion of individuals receiving disability and rehabilitation pensions increased by 49% from 2000 to 2024, rising from 6.3% to 9.4%. Anxiety and depression are among the diagnoses that have increased the most.
Kara Connect’s next product development phase focuses on sick leave, aiming to help individuals return to work through support and engagement. Research indicates that if people are not helped before going on leave, the likelihood of them dropping out of the workforce entirely increases.
“This is a major issue—not only for companies but also for the public sector—and it is taking up a lot of space in international discussions. The pressure on HR managers and leaders due to rising sick leave calls for a more systemic approach, and technology can support that process,” says Þorbjörg Helga.
“Governments think this is about adding one more psychologist at a primary care center, as if that will make the difference. It won’t solve anything. These important specialists burn out within weeks under that model, earning 600,000 ISK per month. Based on our experience, we are on the wrong path. Prevention in mental wellbeing and anxiety is the key to real improvement.”
Kara Connect was founded in 2014 and first entered Kría’s investment portfolio in 2019.
