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Interesting activity in Iceland

Icelandic investment company Titan has been making very interesting investments lately. Owned by Mr. Skuli Mogensen, it certainly appears to fulfil his objective of resurrecting the economy. With solid background in intelligence systems and mobile technologies, the most recent investment appears to be directed toward a specific objective in that arena: Big data.

Titan now owns a stake in MP Bank, WOW Air, Carbon Recycling International, Securitas, CAOZ, Tindar Verðbréf, Thor Data CenterDataMarket and now, most recently, Skyrr. The Skyrr investment suggests a possible strategy because of what Skyrr does and what type of clients it has:

Skyrr’s roster of clients includes most of Iceland’s largest companies and institutions. These include all the commercial banks and most of the finance companies, all the insurance companies, most of the transportation companies, and the major telecommunications companies. In addition, the Icelandic government and major municipalities are Skyrr clients. The company also has a strong position among small and medium-sized companies, and has been growing in that field, for instance by developing simple web solution tools and by transferring the finance solution OPUSallt, which was moved from HugurAx to Skyrr late last year. Skyrr furthermore maintains a strong position in the IT consumer market, with a 30% marketshare. Skyrr’s strong market position is demonstrated, for example, by the fact that around 10 thousand work places in Iceland use Skyrr’s IT services. Furthermore, there are around 100 thousand Dell PCs in use in Iceland, and approximately one-third of the Icelandic labor force is paid through systems provided by Skyrr.

With that client roster, I expect the next move to be that of Verne Global taking over Thor Data Center to remove a competitor, hosting to be transferred from Skyrr to Verne, and DataMarket visuals deployed to provide data transparency and usability. Heavy data users in this network stand to gain considerably as they can easily create interactive data communication channels between themselves, improving risk management on MP Bank and Tindar side and greatly increasing market insight on the Wow Air and Carbon Recycling side. MP Bank, Tindar and Titan itself are likely to provide funding in some form for these investments – most likely acting as intermediaries for private investors or investment groups – and gain from that as well. The entire strategy relies on securing external customers, for a loop like this, however impressive it may be, is unsustainable.

This could easily become the ideal resource for ICT firms to develop specialized solutions for the financial sector, marketing, economics and basically or whatever else they have their eyes on. Once the data is in one place and – hopefully uniform i.e. supports common metrics extractions – a major timeburner has been removed. If elections 2013 result in an Independence Party win, this portfolio can rise in value very quickly. I place a cautionary regarding the extent to which this network could be feeding on itself, however, either through cash flows or the balance sheet. External cash inflows are essential or the entire chain breaks apart.


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