Meet Finland’s largest VC – NGP Capital
NGP Capital is the only member at FVCA that invests in three different continents -Europe, China and the US. We got on the line with them to better understand their relationship with Finland and to talk about one of our favorite common topics; AI-driven venture capital.
With $1.2 Billion under management, a global team, and growth-stage investing successes like Moovit, Xiaomi, Deliveroo, Lime, and more under their belt, NGP Capital is by far the largest venture capital firm originating from Finland. We talked to the team earlier this spring to get to know them better and understand how they run their global model from Finland.
“We have ten people in Finland based in the Maria 01 campus, including most of our European investing team, our data science team, and our marketing team,” said Bo Ilsoe, Partner. “It’s as large as our office in Palo Alto. Our third-largest office is in Beijing. Helsinki is also where we got started in the first place as we spun out of Nokia in 2005.”
NGP Capital recently moved to Maria 01 from Espoo. We were set to meet at their new office, but then the coronavirus forced us all to meet over Zoom instead.
How is NGP Capital different from other VCs in Finland?
“NGP Capital was founded in 2005 with the ambition to offer entrepreneurs something new; a support system of funding, feet on the ground in the world’s largest markets, deep thematic expertise, and access to vast networks. Our limited partner is Nokia, so we have a big team here in Helsinki, although the vision was always to invest internationally. We believe growth-stage companies can come from anywhere and that they deserve long-term, loyal investors who have the ambition and the discipline to create both significant financial and strategic value,” according to Walter Masalin, Partner.
I’ve noticed that you talk about insight and often emphasize being data driven; what does that mean in practice at NGP Capital?
“Technology innovation is global and has been for the last decade. We have offices in China, Europe, and the United States, so we develop our ideas and our theses globally, while sourcing deals and investing locally,” said Bo Ilsoe. “Global pattern recognition is helpful to identify good opportunities early. This model also helps the entrepreneur post-investment, as we can accelerate the growth of the company by plugging them into our global network.”
Walter Masalin added, “When we talk about insight-driven investing, we are really referring to the very core of how we operate. Our whole model is built around developing proprietary insights for investing within our three focus areas: smart mobility, intelligent enterprise, and mobile technologies. We have discovered that this really is the best way to add value to both our LP and portfolio companies. By being global, thematic, and data-driven, we can help our companies scale and provide a lot of insights to our LPs.”
Can you talk about more about the part about being data-driven?
“Sure. We source deals in our target markets and industries using AI. Our “Q” platform scans and ranks more than 500,000 companies around the world in our chosen investment areas. There are currently around 200 growth parameters for each company, with more being added all the time.” said Walter Masalin.
What kind of deals are you looking for now?
“We are always looking for great entrepreneurs and teams running growth-stage companies in our three core investment areas,” said Walter Maslin. “We typically come in at Series B or later in companies that have an ambition to pursue a large market opportunity. Our latest deals include Shippeo in France, a company that provides visibility into the supply chain, Song Guo in China, an urban mobility company focused on scooter sharing, and Zinier, a field service automation company in the US. We also recently exited Moovit, an Israeli company in the mobility sector that sold to Intel for $900M.”
What’s your stance on impact investing?
“We favor investments that benefit society beyond the specific business. We recently brought Finland’s former prime minister, Esko Aho, on board to help us better bridge between the private sector and the public sector. We also invest a lot in companies that advance a more sustainable future for our planet and bring down CO2 emission levels in cities, including Moovit, Lime, Shippeo, Scoop, and Zoomcar,” said Bo Ilsoe.
“Impact is a broad word,” Bo continued. “The way we interpret it is to do good and always do the right thing. That applies to our own team as well. We are an equal-opportunity employer with a very diverse team that includes six nationalities and 45% women at all levels of the company including the partner group. ‘Do the right thing’ and ‘Diverse by design’ are two core values at NGP Capital. However, having said that, we are always looking for ways to become even more inclusive and diverse.”