Iceland’s first startup unicorn Kerecis turns state deficit into surplus

Iceland’s first unicorn startup, Kerecis, is set to turn this year’s projected state deficit into a surplus with a one-off tax payment of approximately ISK 40 billion (around $290 million), reports news outlet Vísir.

Founded in Ísafjörður in the Westfjords, Kerecis specializes in medical products made from sustainably sourced fish skin. The company grew from a small Arctic innovation hub into Iceland’s first billion-dollar startup before being acquired by Danish healthcare company Coloplast. The payment stems from Coloplast’s purchase of Kerecis’ intellectual property rights.

The Icelandic government had projected a ISK 28 billion (USD 203 million) deficit for the year. However, with the unexpected tax revenue now coming in as a single payment this autumn, the Treasury is on track to post a ISK 12 billion (USD 87 million) surplus instead.

Finance Minister Daði Már Kristófersson said the revenue had not been factored into the fiscal plan, noting that such payments are typically spread over several years. The company opted to make the full payment at once, creating an immediate fiscal impact.

The minister said the funds will primarily be used to strengthen fiscal balance after several years of deficit spending. At the same time, the improved Treasury position could give the government greater scope to invest in infrastructure, including in the Westfjords, where Kerecis was founded and where calls for transport improvements have been growing.

Beyond its significance for Iceland’s startup ecosystem, Kerecis’ rise from a remote Arctic town to global success is now delivering a direct and dramatic boost to the national budget, marking a rare case where regional innovation reshapes a country’s fiscal outlook in a single year.