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„To live in Iceland you need to be a little crazy.“

06 Jun 2017

„To live in Iceland you need to be a little crazy.“ Interview with David Gunnarsson, CEO at Dohop

Dohop, a start-up offering a unique travel search engine, is the first company from Iceland at Deutsche Börse Venture Network. The technology of the growth company makes it possible for its users to save money by finding especially cheap flight connections with multiple stops that do not appear in other flight search engines. In this interview, CEO David Gunnarsson talks about the Icelandic start-up scene, the craziness of his compatriots, and why there is only little value in being successful as a start-up on the island.

Iceland has about 330,000 inhabitants, which corresponds to the population of a German city. How big is the Icelandic start-up scene?

We are in fact only few people in Iceland. However, we are very entrepreneurial here. In 2008 and 2009, many Icelanders lost their jobs because of the financial crisis and thus were forced to start their own business. At the same time Icelanders started to invest in local start-ups because they could not take money out of the country due to currency control; and alternative investment options were limited to government bonds and real estate. This was very fortunate for the start-up scene here. Now Iceland offers a good number of growth companies, e.g. the fintech Meniga or the computer technology provider CrankWheel. And what is also true about the start-up scene in Iceland: Everyone knows each other.

In Iceland, it is very easy to open up a business. What is the flipside of being founder in your country?

To be honest: Being successful in our local market has only little value. Our home market is very small and while it is fine for a proof of concept, it is hardly big enough to propel Icelandic companies to global growth. Additionally, it takes so much more to grow from here due to limited financial and human resources. Sometimes I consider it as a virtual tax to be an Icelandic entrepreneur because of those disadvantages.

Nevertheless, Dohop is doing quite well. The turnover was about €3 million last year. Are you already operating profitably?

In 2016, we invested a big amount of money in our technology. We introduced a new service called Dohop Connect: If you book our connected flights and miss your connection, Dohop covers the cost of a new booking up to €1500. That is one way how we make our money and will be the primary driver of our revenue growth going forward. Due to this investment, there was a loss at the end of last year but we will break even in 2017 and will achieve a positive net result next year.

Who are the main investors of Dohop?

Our biggest investor who is holding about 20 per cent of the shares is the Icelander Jon von Tetzchner, co-founder of Opera Software and current CEO of Vivaldi Technologies. Frosti Sigurjonsson, co-founder and former CEO of Dohop is also still invested in the company. And the third lead investor is NSA Ventures, a government funded seed fund from Iceland. In total, we have been able to collect about €5 million so far.

Talking about money: The rate of the Icelandic krona has increased by almost 20 per cent within one year. Travelling to Iceland has therefore become 20 per cent more expensive for people from the eurozone. Does this affect your business too?

Bookings for the summer season this year were mostly concluded before the rate of the krona started growing fast, so tourism in Iceland has not really been affected yet. But you are right, an Icelandic vacation has become more expensive. Currently, a cup of coffee is about €5 to €6, a bottle of beer will be €12 to €15 and €20 for a glass of wine in Reykjavik. Dohop is being hit by this development quite heavily: 93 per cent of our revenue is generated in Euro, US-Dollar or Pound. In total, our revenue will be €1 million lower than it could have been this year just because of the increased exchange rates. In spite of that our revenue growth is about 30 per cent.

Dohop is the first Icelandic company at Deutsche Börse Venture Network. What do you expect from the membership?

Venture capital is fairly limited in Iceland. There is a small number of VC funds and we know most of them. Additionally, private investors in Iceland have limited experience in funding start-ups, which can also be a challenge. There is only a very small generation of entrepreneurs before us that can advise and invest in our ideas. Therefore, what I hope to get from Deutsche Börse Venture Network is smart money and the possibility to establish a network with investors outside of Iceland.

I am not sure if you really fit to the rest of Europe. The former mayor of Reykjavik, Jon Gnarr, is a comedian. He won the election with - among others - the promise to get a polar bear for the local zoo. Are the Icelanders a bit crazy or just creative?

We are crazy and there is a simple reason for that: To work and live in Iceland you need to be crazy. Imagine: During winter there are up to 16 hours of darkness every day and even during summer it snows sometimes. Nevertheless, in my opinion this island is the best place to live in the world. The country is incredibly beautiful, the people are nice and there are no traffic jams, even in Reykjavik. On a good day, it takes me 8 minutes to get to work by car, at heavy traffic times about 12 minutes.

What is the long-term goal for your start-up?

Although Dohop has already been around for 13 years now, we are still the smallest among the big players within the travel comparison business in Europe. Therefore, our main goal is to expand and we are projecting a turnover of €10 to €12 million next year. A long-term goal would be to rank among the top three of the travel start-ups in Europe. However, there is still a long way to go. Our vision is to make Dohop larger, more profitable and the best place to work in Iceland. I think it is incredibly important to create an environment that allows people to accomplish all their goals at work and in life.

About Dohop and David Gunnarsson:

Dohop, founded in Reykjavik in 2004, is an independent travel search engine. The start-up offers a comparison technology for flight connections that makes it possible to find significantly cheaper flights than with other search engines. Every month, the customers of Dohop compare about 1.5 million flight connections on dohop.com. Since other platforms also operate with the technology of the start-up the total number of the monthly flight searches with Dohop’s technology adds up to about 150 million.

David Gunnarsson started his career in the financial sector where he worked until the economic crises in 2008. He was hired by Dohop because of his computer science and economics background. After he had taken another detour back to a bank, he worked his way up at Dohop and became its CEO in the beginning of 2015.

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