2020 was truly an eventful year. Due to the COVID-19 pandemic, we moved our offices to our homes and face-to-face meetings were replaced with video calls – but it didn’t slow us down! The year was full of significant events for the whole industry: investment activity was record-high despite the pandemic, and a number of new funds were founded.
What were the highlights and most interesting phenomena of the year in the venture capital and private equity industry? Read below to find out!
Pia Santavirta acts as the Managing Director of the association. Our energetic and dynamic team manages the association’s member services and communications, in addition to advocating for the industry in public policy work.
Alongside Pia, the association’s team consists of Jonne Kuittinen, Saara Vettenranta, Juulia Myllykangas, and Lyydia Lappi. In the spring, we got a pair of extra hands for a month, as Emma Erholtz helped us with the planning of a bigger project. Returning to his studies, Toni Pakarinen moved on to become FVCA alumni in early 2020.
FVCA’s Board oversees decision making, monitors the association and organises its operations.
Sami Lampinen (Inventure) acts as the Chairman of the Board and Jussi Seppälä (Sponsor Capital) as the Vice Chairman of the Board. Anita Ojala (Juuri Partners), Jan Sasse (Tesi), Timo Argillander (IPR.VC) and Janne Holmia (Verdane) continued as board members. The board also got two new members, Pia Kåll (CapMan) and Juhana Kallio (Intera Partners).
Vesa Lehtomäki (Korona Invest), Tanya Marvin-Horowitz (Butterfly Ventures), Aapo Eskelinen (MB Rahastot) and Liisa Harjula (Sentica Partners) continued as deputy board members. Additionally, Pirkka Palomäki (Maki.vc), Kalle Lumio (Nordia Management) and Marko Kyyrönen (Sparkmind.vc) joined as new deputy members of the board.
In addition to the board, the regular committees and ad-hoc committees support the public policy work of the association. Formerly an ad-hoc committee, the ESG Committee was made a regular committee during 2020 due to the ever-growing importance of ESG matters. More than 100 members of the association signed up to join the committees to contribute to the development of the industry.
The following regular committees operated in 2020:
Legal Committee
Tax Committee
Buyout Committee
Venture Capital Committee
Research Committee
Communications Committee
Monitoring Group
ESG Committee
Each committee’s members are listed here.
New Members in 2020
FVCA’s member count continues to grow – during the year we welcomed 17 new companies as members!
We now have more members than ever before, as at the end of 2020 our member count stood at 148. We have 80 full members, 70 of which are general partners and 10 limited partners. Our newest member category, ‘Other Private Equity Investors’, includes 7 companies, who are Family Office and CVC investors. In addition, we have 61 associate members, who are relevant service providers in the industry.
Are you interested in joining the FVCA? Read more here!
We always introduce our new members on our blog (most articles in Finnish):
In addition to the above, the following members joined the FVCA: Courage Ventures Funds, Norvestor, Collector Bank, Staria, Climate Fund, Takoa Invest, Nostetta Ventures and LähiTapiola Vaihtoehtorahastot Oy.
Our work at the FVCA is focused on public policy work, industry development, and communications. Our member services include, for instance, industry networking events and seminars, cooperation in communications, as well as access to industry news, research, and other materials. In addition, members get discount codes to many of the major industry events.
In 2020, we worked hard to maintain and develop the operating environment of the investors, startups and growth companies in the midst of the pandemic. Furthermore, we organised a wide variety of topical webinars for our members.
The fundraising activity of VC and PE funds was lively in 2020. You can read more about the new funds below:
Innovestor Ventures
Sparkmind.vc
Nordic FoodTech VC
Icebreaker.vc
Verso Capital
Bocap
North Savo Startup Fund (article in Finnish)
CapMan Growth
Sponsor Capital
Superhero Capital
OpenOcean
Organising events has an important role in the association’s activities. In 2020, we switched from stages to studios, and our events moved online. We organised 28 conversational and educational events, most of which were organised together with our members. The events attracted more than 1300 participants.
In early 2020, before COVID-19 hit Finland, we also had the chance to organise a handful of in-person events, such as a CVC morning event with Dottir, M&A trends with EY, and incentive structures with Mandatum Life. While organising webinars has its upsides, we are eagerly looking forward to seeing you all in person again!
We are more than happy to organise events with our members – feel free to contact Juulia Myllykangas from our team in case you have an idea regarding events. Moreover, ideas from other stakeholders are also welcome. For example, in 2020 we organised webinars together with Health Tech Finland Ry.
Popular events of the fall were, for example, our ESG and EU Funding webinar series.
In the ESG Webinar Series, we went through the principles and practices of responsible investing. During the series, we got to hear interesting keynotes from our members, as well as FVCA’s report of the status of ESG communication in the industry. For example, Tesi, eQ, CapMan and Evli Growth Partners introduced their responsible investing policies, and the webinar by Tekir was about Value Creation in Portfolio Companies Through Responsible Communications.
In the webinar series concentrating on EU Funding, we learned about EU’s new financial instruments and how to use them in funding startups and in venture capital funds’ fundraising. The series included speakers from Tesi, EIF, Nordea and Grannenfelt Finance.
In the spring of 2020, we faced the tough decision of canceling our main event of the year, Spring Seminar, due to the ongoing COVID-19 pandemic.
Traditionally the Spring Seminar has culminated to the annual Building Growth Competition, organised together with PwC. In the contest, some of the most successful Finnish startups and growth companies pitch their growth stories for the jury, which chooses and awards the winner. Despite having to cancel the seminar, we wanted to celebrate entrepreneurship and ended up organising the Building Growth 2020 contest remotely in August.
The contest was opened by Hannu Suonio (PwC) and the judges were professor Pekka Mattila from Aalto University, journalist & writer Elina Lappalainen, and professor & economic researcher Mika Maliranta from the University of Jyväskylä. The host of the event was Claes Mikko Nilsen from NordicNinja VC.
In addition to the contest final, we also got to hear a panel discussion about future views of the industry. The panelists were Jussi Sainiemi from Voima Ventures, Ilkka Pentikäinen from Vaaka Partners, Pia Kåll from CapMan, and Lauri Kokkila from Inventure.
The winner of the Building Growth 2020 contest was Swappie, which offers customers used and serviced smartphones. The judges were especially impressed by Swappie’s environmentally-friendly approach, and they described it as a “true tech company that can open new markets quickly and efficiently thanks to its technological solutions”. Although Swappie’s core business is selling used phones, they have made the service process highly efficient and developed completely new technologies and applications for it.
For example, Reaktor Ventures, Lifeline Ventures, Inventure, Tesi and Telia were on board in speeding up Swappie’s growth. You can read more about the winner’s story here!
The other finalists of the competition were Framery, Forenom and Oura.
During the Building Growth contest, PwC also presented their analysis on the growth of the previous years’ winners. The growth and development of the winners have been impressive: their revenue has more than tripled and personnel count more than doubled in three years after the win. Most of this growth has been organic.
Read more about the growth of the winners of the Building Growth contest here.
FVCA’s research and statistics of the VC and PE industry are based on European Data Cooperative’s (EDC) database. In Finland, the coverage of the data is top of its class. The data is gathered directly from investors.
Based on the EDC database we compile our annual venture capital and buyout statistics. Extensive analysis of the statistics is published both in Finnish and English on our website’s Research and Statistics page.
Read more about the 2019 statistics here:
In 2020, we were fortunate to publish great news about the 2019 investment activity. Finnish startups and early-stage growth companies again raised a record-breaking amount of funding, altogether EUR 511 million. The share of domestic investors grew to EUR 113 million. The most significant growth was seen in investments to Finland by foreign venture capitalists. In total, all foreign investors invested EUR 295 million in Finnish startups and early-stage growth companies. Read more from FVCA’s press release 7.4.2020.
In addition, Invest Europe, reports that Finnish startups raised the most funding in Europe compared to national GPDs. Invest Europe is the parent company of European venture capital and private equity associations. 2020 was the second year in a row when Finland leads the statistics in Europe. Read more from FVCA’s press release from 28.5.2020.
Altogether, startup funding in Finland has grown over fore-fold in less than ten years and currently breaks half a million euros annually. The amount of investments has grown due to both Finnish and foreign investors. Foreign investors already account for approximately 60% of total funding.
Despite the ongoing pandemic, the first half of 2020 (H1) saw yet again a record-high amount of investments in Finnish companies – EUR 707 million. The investments were made in 139 startups and growth companies.
The VC investments to Finnish startups grew to the highest levels yet in H1 statistics. Finnish startups raised a total of EUR 244 million in investments from domestic and foreign VC investors. The share of Finnish VC investors also grew to a record-high level, EUR 100 million.
Additionally, despite the pandemic, the first half of 2020 was more active for buyout investments as well, compared to H1 of 2019. Buyout investments were made for EUR 463 million.
Read more about the H1 statistics here:
Annually, FVCA publishes an impact study in collaboration with KPMG. The study maps the development of growth and revenue of Finnish businesses that have received private equity or venture capital. The study has found that the impact of venture capital and private equity investors on the growth of their portfolio companies is significant: active ownership has led to substantial results.
The average annual growth rate for turnovers for the sequent three years after the investment has been over 50%, whereas the control group grew only 5% per annum, without the support of venture capital or private equity investors. During the same time period, the businesses backed by investors saw their headcount grow by 23% on average per year.
All in all, when compared to similar companies of the same size in the same industry, the average growth rate of private equity-backed companies was nine times faster in turnover and five times faster measured by the number of personnel.
Read more from our 29.9.2020 press release.
Invest Europe has also conducted an impact study. Learn more about the impact of the European private equity industry here: “Private Equity at Work” (17.9.2020).
For the first time in December, we published a new study about the gender diversity of portfolio companies of Finnish venture capital and private equity investors. The study, conducted by KPMG and FVCA, found that Finnish portfolio companies have relatively few female leaders. The male-female ratio in the top management teams of private-equity-backed companies is similar to that of public companies, whereas the boards of private-equity-backed firms remain even more overwhelmingly male. In all private-equity-backed companies, women hold only a fifth of the management team positions and 13% of the board seats.
The female ratios in buyout-backed companies are:
The female ratios in VC-backed companies are:
The study was conducted as part of KPMG’s and FVCA’s industry impact study. Learn more about the study here.
Both FVCA and the industry are working widely towards increasing diversity in the private equity industry and portfolio companies. For example, together with AaltoENT, FVCA annually organises an educational programme for professionals who are new or thinking of joining the industry. We also contribute to the #Level20 project, which aims to achieve a 20% ratio of women in leadership positions at private equity companies. In addition, together with Nasdaq we are supporting the Allbright Foundation in organising various educational events that promote diversity for private and public companies as well as private equity investors. We have also spoken at numerous professional networks about the career opportunities in the private equity industry. Similarly, the women representing the industry have acted as important role models, as they share the ins and outs of their work and the career opportunities in their portfolio companies.
There is still plenty of work left but we are heading in the right direction. Thanks to our new annual diversity study, we are able to track and further improve the development of diversity in the industry.
We are also active among students – the future talent. As a part of our research programme, we organise a master’s thesis competition for students annually. The winner is awarded 2500 euros and the opportunity to present their findings to the industry at our main event of the year, the Spring Seminar. Fortunately, this allows us to familiarise ourselves with many master’s theses about the private equity industry. Pia Santavirta and Jonne Kuittinen also regularly lecture at universities about the private equity market and new trends. Furthermore, FVCA organises student excursions in cooperation with various industry representatives. The association also has its own mentor group, through which students and young professionals are able to get constructive thoughts when planning their own career.
In addition, the FVCA team always has at least one student included. We want to provide young, aspiring professionals a valuable point of view to the world of private equity, startups and growth companies. We are already known as a talent accelerator and a path towards a career in private equity or venture capital. We have had students from business, law and political science backgrounds.
The investors in the industry also welcome students through various internship programs.
Responsible investing is already a household term nowadays. However, developing and improving the best practices are under continuous work at our association. Hence, we changed the ESG committee from an ad-hoc to a regular committee with a regular convening schedule.
In 2020, we conducted a study on the status of ESG communications by Finnish VC and PE investors, and we started a webinar series about ESG. The series shares best practices from the industry and received a great deal of interest from our members. We also formed and shared guidelines to our members about Sustainable Finance regulation, which will come into force on 10.3.2021.
In the recent years, we have also conducted three studies about impact investing, and we have issued a set of guidelines for sustainable investing in the private equity and venture capital industry in 2017.
The year 2020 has been full of public policy work. The year consisted of tackling the challenges caused by the ongoing coronavirus pandemic, as well as dealing with various kinds of EU regulatory matters.
In this part of the Annual Review, you can read more about what we did to support our members as well as the startups and growth companies they fund.
Although we started the year by celebrating great investment statistics from 2019, COVID-19 overshadowed the outlook for the rest of the year. Together with the committees and the board of the association, we assessed the potential impact of the crisis for the venture capital and private equity industry. We defined four potential issues that should be addressed with efficient action. In addition, we reminded policymakers that it took five years for the venture capital and private equity industry to recover from the 2007-2009 financial crisis. Hence, in order to ensure quick and efficient solutions, we presented concrete action points for the ministries and policymakers to utilise. In addition, we conducted two market pulse surveys together with the Finnish Industry Investment (Tesi) and Business Finland Venture Capital (BFVC). The results were used to assess the funding landscape and its sufficiency in the midst of the corona crisis. Read more about the surveys and results here: 22.4.2020 and 9.6.2020.
On April 22nd, we issued a set of recommendations in order to save the ‘Supercells of the future’ and other growth companies in the midst of the pandemic. The recommendations initiated a large amount of discussion in the Finnish media. The topic was discussed on MTV3 morning show, and the recommendations were covered by Helsingin Sanomat and Yle, amongst others.
All of the recommendations presented by FVCA were ultimately executed by the Finnish government. The biggest achievement was a EUR 250 million Venture Bridge program, which, during the upcoming two years, will act as a supporting mechanism for startups pursuing international growth. The new equity financing package supports Finland in finding a path to stable economic growth with the most promising startups, who are essential for the Finnish economy, surviving the crisis as well. The Venture Bridge program also allows later-stage startups, that have already raised some funding, time to raise a larger funding round after the funding gap caused by the coronavirus crisis.
In September we carried out a market report, “The way out of the coronavirus crisis”. In the report, we summarised the effects of the corona crisis on the private equity and venture capital industry and on the availability of funding for startups and growth companies, as well as our public policy recommendations in order to tackle and survive the crisis.
After the market report, we also published new H1 statistics from the first half of 2020. Investment activity remained high, which further argues that the Finnish funding landscape for startups and growth companies has developed and strengthened substantially since the financial crisis. Yet, it is essential that Finland utilises all potential solutions to battle the corona crisis, and that there are relevant plans available in case the pandemic lasts longer than expected. Similar actions have been executed in other competing markets as well. Securing funding for startups and growth companies creates opportunities for future growth, new employment opportunities and through that, wellbeing to all Finnish citizens.
In the autumn, we needed to tackle a set of over 40 different Finnish and EU regulatory projects that affect the private equity and venture capital industry. Many of the regulatory matters can be difficult to keep up with, which is why our Managing Director Pia Santavirta compiled a summary of recent regulatory and public policy matters in the industry. The summary goes through different categories of regulatory issues from fund regulation to taxation, the industry’s views on policy work, and the timelines of various regulatory matters. An extensive summary of current regulatory topics can be accessed by all members in the material bank in Extranet (in Finnish).
FVCA is a member of Invest Europe. Invest Europe maintains the operating environment of private equity and venture capital investors as well as develops professional standards in the industry, on behalf of the whole Europe. Furthermore, FVCA collaborates closely with its Nordic and Baltic colleagues.
In 2020 meetings, the managing directors of the industry associations concentrated on discussions about mitigating the effects of COVID-19 and the related policy work. Additionally, some of the important public policy themes of 2020 were AIFMD, Sustainable Finance, and reforms regarding fund investors. These reforms aim to channel a larger amount of capital from institutional investors to startup and growth companies through VC and PE funds. This further increases the amount of knowledge and smart capital in the market.
FVCA has received gratitude from its international colleagues for transparent activity, and for sharing newsletters and market reports actively to all European colleagues.
We offer our members active and diverse communication channels. On a weekly basis, we share news about recent investments, new funds, and the ins and outs of current trends in the venture capital and private equity industry. In addition to our website, we communicate via multiple other channels: social media, newsletters, member newsletters, and a news recap sent out to members every Sunday. The recap gathers all major news from the industry from various Finnish media outlets.
Through our communications, we aim to increase awareness about the venture capital and private equity industry. We want to highlight how VC and PE investors help to improve everyone’s’ wellbeing: promising and growing companies are funded and assisted on their growth paths, and as they succeed, they attract further talent. Even more crucially, investors in VC and PE funds, such as our pension funds, are able to invest in impactful and profitable assets to grow their capital for current and future generations.
It is important that Finland and Finnish companies continue to grow and develop, not just in the capital region, but all over the country. It is great to see all the promising companies from different parts of the country that VC and PE investors have in their portfolios. Stay tuned, as more on this theme will follow in 2021.
We are happy to provide regional media outlets with local statistics and data, so do not to hesitate to contact us!
In 2020, Pia in fact toured around Finland right from her home (remote) office, as she participated in various regional events, representing the industry.
FVCA serves a large group of different investors and helps them build collaboration. Collaborative work between business angels, VC and PE investors, Family Offices, CVCs, institutional investors and the Finnish Industry Investment (Tesi) enables larger funding rounds in Finland, which is crucial in achieving international competitiveness. In early 2020, the last in-person talk by Pia was in FiBAN’s (Finnish Business Angel Network) event about trends in venture capital.
Are you an entrepreneur and looking for funding to accelerate your company’s growth? Learn more about venture capital and private equity investors here: A fundraising guide for entrepreneurs, and our Find an investor -search tool. These tools can help you find the right investor for your company!
Although new investments are exciting, exits are also important – in 2020, IPOs as an exit channel was a hot topic in the media. A major Finnish news outlet, Kauppalehti, reported that the stock exchange could use some new IPOs and wrote about the role of venture capital and private equity investors in bringing companies public.
Since 2015, half of the new IPOs in the Helsinki Stock Exchange have come from companies that have raised venture capital or private equity funding during their growth journey. During the same time period, VC and PE investors have invested more than EUR 5,2 billion in Finnish startup and growth companies. Already a tradition, FVCA’s Potential IPO list was published in 2020 as well. Finnish investors highlighted 54 top companies that have the potential to IPO during the upcoming few years.
2020 was an active year for us in social media as well: FVCA’s Twitter and LinkedIn follower counts saw significant growth. Instagram has been popular among young professionals and students and turned out a valuable channel especially when recruiting our new intern.
We often publish blog posts written by our members on our website and share the articles on social media as well. Law professionals have been especially active as guest writers on our blog: posts include analysis on the effect of the corona pandemic on valuations, and how carried interest taxation works in Finland.
Our Managing Director Pia is also active in social media! Remember to follow us in Twitter, LinkedIn and Instagram. You can find us with @FVCAfi and Pia with @PiaSantavirta.
In 2020 we were delighted by the presence of venture capital and private equity professionals in various podcasts. Our Managing Director Pia and many of our members have actively taken part in different podcasts, such as Talouselämä, Neuvottelija-podcast, Mimmit Sijoittaa, Leadcast, and others. The discussions include how to become a VC or PE investor, what do VC and PE investors actually do, what kind of companies typically raise such funding, and what industries will be important in the future.
We are happy to help all speakers with background material and information about the venture capital and private equity industry.
Do you want to stay up to date with the Finnish VC and PE industry? Subscribe to our newsletter here. In our newsletter, we compile the latest news, events and policy issues, that will help you and the association take the industry forward.
All of our previous newsletters can be found here.
A huge ‘thank you’ to our members and partners for the year 2020!
We also gladly welcome new organisations to join our association and take part in the work we do. Read more about our membership here!
Best regards,
Pia, Jonne, Saara, Juulia & Lyydia