Investments in Finnish startup companies are setting new records again – Finnish startup ecosystem continues to internationalize
During the first half of 2019, Finnish startups raised EUR 116 million from venture capital investors. If the investment phase continues, another record year is awaited. The total investment amount for 2018 was EUR 203 million. Newly launched venture capital funds will continue to boost the growth of Finnish start-ups.
Finnish investors have long worked for the growth and internationalization of Finnish start-ups. Finnish venture capital (VC) funds invested EUR 71 million in startup companies in the first half of the year. Investments in foreign companies reached new high of 35% invested capital.
The internationalization of domestic venture capitalists plays an important role in the development of the startup ecosystem as a whole. Investors adapting best practices and creating networks benefit the Finnish growth companies. VC funds of considerable international size are still developing in Finland, which makes establishing foreign contacts for further funding rounds ever more important, says Pia Santavirta, Managing Director of Finnish Venture Capital Association.
The increasing interest of the foreign investors is a clear indication of Finnish startup community’s development. For the first time in 2018, foreign investors accounted for more than half of startup finance. In the first half of this year, foreign VC investors funded Finnish startups with EUR 70 million, which was already 60% of the total sum.
The average size of investments received by Finnish startups has increased over the last five years. The development is driven by large investment rounds of startups that have already reached further stages. The cooperation between domestic and foreign investors have a big role to play in these rounds. During the reporting period, the average size of later stage investments was already EUR 7.2 million, compared with EUR 1.2 million three years ago.
This year, we are again reaching new record levels in startup investments. Larger funding rounds go hand in hand with foreign investors’ activity, the increasing quality of startups and the development of Finnish investors, comments Santavirta.
Three new venture capital funds to support Finnish startups’ growth – a total of 141 million of new capital raised
Between January and June, three new VC investors started their operations in Finland: Grid.VC, financed by energy companies, Japanese-North-European Nordic Ninja VC and Voima Ventures, with roots at VTT Technical Research Centre of Finland. In total, these funds raised EUR 141 million to be invested in startups over the next few years.
In the last years, the investor base of startup companies has evolved into a much more diversified and international direction. Voima Ventures is the first venture capital fund in the Nordic countries, where a founding partner and the CEO is a woman, says Santavirta.
Positive fundraising news have continued in the second half of the year. For example, IPR.VC, investing in media content business, published their new fund. In addition, Lifeline Ventures announced Finland’s largest fund last week to invest EUR 130 million in angel and early-stage start-ups. Sector-focused foodtech and edutech funds are coming next.
It is great that fund sizes are increasing. New larger funds are giving an extra boost to Finnish startup financing. The average early-stage investment sizes are also expected to rise with Lifeline Ventures’ new fund, says Santavirta on market developments.
Finnish Venture Capital Association, Managing Director
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Finnish Venture Capital Association, Operations Manager
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Finnish Venture Capital Association,
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