Dynasim was founded in 1992 by Dr. Elmqvist to further the marketing and development of Dymola. Dynasim is privately held.

In 1996, Dr. Elmqvist initiated an effort to unify the splintered landscape of modeling languages by initiating the development of the Modelica modeling language. Similar initiatives have been undertaken by various other groups, but these efforts have been focused primarily on the electrical domain, while Modelica strives to be completely domain neutral.

The basic idea behind Modelica was to create a modeling language that could express the behavior of models from a wide range of engineering domains without limiting those models to a particular commercial tool. In other words, Modelica is both a modeling language and a model exchange specification.