Private Equity investments into Finnish growth companies hit an all-time high -1,3 billion euros invested in 2018

FVCA has collected statistics from 2018 on Private Equity (PE) investments into Finnish later stage growth companies. During 2018, Finnish growth companies received in total almost EUR 1,3 billion in investments from Finnish and foreign PE investors. The amount was distributed among 96 domestic growth companies, most of which make business products and services.

Private equity boosts growth with substantial investments to Finland

The majority of the record-breaking EUR 1,3 billion investments came from foreign investors. Foreign investments to domestic later stage growth companies totaled EUR 871 million, accounting for approximately 67% of all investments. In volume, investments were made to 15 different growth companies, meaning that foreign investors are often involved in the largest investments.

The domestic PE industry shares the trust in Finnish companies’ growth potential. More than 90% of the domestic PE investments were targeted to Finnish companies. Investments into domestic companies by Finnish PE firms totaled EUR 419 million, which was divided among 81 companies.

“With the growth expertise and capabilities in Private Equity, Finland becomes the home to more SMEs, one company at a time. These companies have a significant role in improving and maintaining the economic growth and employment in Finland. We need owners like Private Equity investors, who are able to develop domestic growth companies quickly to revenues of over EUR 100 million. Finland still has room for many more strong SMEs to boost the domestic economic growth”, comments Pia SantavirtaManaging Director of FVCA.

The Finnish PE industry diversifies – growth opportunities to an increasing number of companies

The range of domestic PE investing in later stage growth companies has increased as the demand increases and market develops. Finnish PE invested a total of EUR 447 million in Finnish and foreign later stage growth companies.

In addition to PE focusing on majority investments, growth investors focusing on growth possibilities have entered the market. These growth investors include funds like Bocap, Juuri Partners and CapMan Growth. The amount of growth investments increased up to threefold from 2017, with the 2018 all-time high in growth investments of EUR 177 million. According to statistics, minority investments have established their position in PE and as a part of the growth path of non-listed companies.

In 2018, the average size of growth investments made by Finnish PE amounted to approximately EUR 3 million, while the average investment for acquisitions stood at an average of EUR 8 million. Investments classifiable as acquisitions totaled EUR 264 million in 2018.

“A diverse PE market means that an increasing amount of companies can begin to execute bold growth strategies together with their investors. Minority investments have currently a significant demand, for example in generational change. On the other hand, PE can also build new business from the ground-up, as seen with Renta, the construction equipment rental company. With the support of PE, Renta sprinted in only three years to revenue of over EUR 160 million. PE brings courage to grow in various stages of change and growth” comments Santavirta on PE’s influence in companies’ growth.

Contact details

Pia Santavirta
FVCA, Managing Director
+358 40 546 7749
pia.santavirta@paaomasijoittajat.fi

Photos: FVCA photo bank

FVCA is the industry body and public policy advocate for the venture capital and private equity industry in Finland. As the voice of the Finnish VC and PE community and the entrepreneurs they fund, it is our role to demonstrate the positive impact of the industry on the Finnish economy. FVCA – Building growth. www.paaomasijoittajat.fi,@FVCAfi.


ADDITIONAL INFORMATION

PDF version of the statistics is available here.

Examples of companies receiving PE investments in 2018:

Consumer products and services:

  • Gugguu, Panostaja
  • Superpark, Sentica & Tesi

Business products and services:

  • Viria, Tesi & LähiTapiola
  • Eficode, Bocap
  • Administer, Bocap
  • Bolt Group, Bocap
  • Flowplus, Juuri Partners
  • Finelcomp, Juuri Partners
  • Esa Kuokka, Juuri Partners

New Finnish Buyout funds 2017-2019:

  • Sentica Partners
  • Vaaka Partners
  • Korona Invest
  • Armada Mezzanine Capital
  • Dasos Capital
  • Saari Partners
  • Folmer
  • CapMan Growth
  • Bocap
  • Evolver

Impact of the PE industry

  • A recent impact study by FVCA and KPMG showed that VC and PE backed portfolio companies’ average growth in three years has been 6 times faster in terms of revenue and 15 times faster in terms of employees compared to peer companies from same industries and of the same size
  • For example for investment years 2010-2014 the total revenues of PE backed growth companies grew in three years from EUR 4,1 billion to EUR 5,8 billion. The impact of PE was shown as a EUR 1,7 billion growth, including investments in organic growth, and acquisitions in addition to business development. The EUR 1,7 billion increase is comparable to the annual revenue of Finland’s 30th largest company.
  • Companies backed by domestic and foreign investors account for approximately 6% of the Finnish companies, measured by revenue and employment. PE backed companies employ in total approximately 81,000 people.

Definitions

  • GROWTH COMPANY:In this press release, a growth company refers to a later stage growth company with established business and revenue, and in most cases potential for continuous growth in the future. The company’s revenue can range from millions to hundreds of millions at the time of investment.
  • STARTUP: Startup and early-stage growth companies refer to a young and innovative company that typically aims for rapid international growth with a scalable business model. Information about Venture Capital investments in 2018 to startups was published on March 23rd 2019.