In the third quarter of 2024, FiBAN received a total of 126 funding applications, marking a 16% increase from the second quarter of 2024 and a significant 54% rise from the third quarter of 2023. The rise was mainly driven by early-stage companies, particularly those at the idea stage, with a 162% year-over-year increase in applications from this segment. This indicates that startups are applying for funding at an earlier stage than in previous years. According to Dealroom.co data, early-stage VC funding for startups in Finland has decreased over the past two years, leading to an increased role for angel investors in funding early-stage companies. On the other hand, applications from scaling stage companies decreased by 41% compared to Q3 2023, indicating that startups at the scaling stage are less likely to apply for funding through FiBAN’s dealflow.
FiBAN’s Startup Pulse Q3/2024: The total number of startup applications increased – company valuations on the rise
FiBAN dealflow receives growing number of applications
When it comes to gender diversity, not much has changed in the Finnish startup ecosystem in 2024. Male-led teams continue to be the dominant force, comprising 50% of all applications in Q3 2024, while female-led teams made up just 5%. Mixed-gender teams accounted for the remaining 43% of applications. These numbers show little progress from the previous year, when female-led teams represented 8% of applications.
“Although the number of female founders in our dealflow has slightly decreased compared to last year, the decline is not statistically significant,” recaps FiBAN’s CEO, Tiina Laisi-Puheloinen.
AI dominates FiBAN dealflow
Software-related sectors remain the most popular in FiBAN dealflow, consistent with trends from previous years. However, FiBAN’s dealflow data shows significant changes in technology adoption. In 2024, Artificial Intelligence (AI) stood out as the top technology, with AI-related startup applications increasing by 154% compared to Q3 2023.
This growth reflects AI’s increasing importance as a driver of innovation across sectors, as startups aim to use the technology to gain a competitive advantage. Big Data also saw substantial growth, with applications increasing by 450% year-over-year, while API services grew by 233%. These numbers indicate the growing demand for data-driven solutions and digital infrastructure, and the rise of such startups in Finland in recent years.
On the other hand, there were noteworthy declines in startup interest for technology sectors such as IoT and blockchain. Applications from IoT-focused startups fell by 64%, and blockchain-related applications dropped by 46%.
Startup valuations varied widely across different industries in Q3 2024. The median valuation for startups applying through FiBAN was 2.5 million euros, which is slightly higher than the historical median of 2 million euros reported by FiBAN angel investors in our annual investment survey.
There were significant variations in valuations across sectors. Wellness and e-commerce startups saw their valuations double from 2023 levels, while clean tech and entertainment startups experienced a decrease of around 50%. The software and data analytics sectors, which are the most popular, saw their valuations rise by 25% and 20% respectively. Proptech valuations surged by 83%, reaching an average of nearly 5.5 million euros
Startups are applying for funding at earlier stages
There have been notable emerging trends in the client focus strategies of dealflow companies in recent years. The B2B2B model has seen a significant increase, with a 79% year-over-year growth in applications in this category in Q3 2024. This trend indicates a growing preference among startups for multi-level partnerships. Smaller companies are focusing on product development while leveraging the resources of larger corporations for sales and distribution. This model allows startups to operate efficiently while benefiting from the market reach of established players. Meanwhile, there has been notable decrease in applications from startups that rely on consumer-driven strategies, especially C2C, which experienced 36% decline in applications.
The Monthly Recurring Revenue (MRR) trends in 2024 indicate that FiBAN’s dealflow is increasingly attracting startups from earlier development stages. Applications from startups with zero MRR have increased by 24% from last year, showing the growing number of early-stage companies seeking angel funding before they have begun generating revenue.
Whereas more mature startups are less likely to apply for funding from angel investors, the decline in applications from startups with higher MRR values is nevertheless notable.
This development is also underlined by the overall decline in average funding a startup has managed to collect by the time of application. Startups continue to apply to FiBAN at an earlier stage and often see Finnish business angels as their first source of funding to expand their businesses.
About
Since 2024, FiBAN has been releasing funding application data for the use of society and decision-makers regarding the early-stage startup ecosystem. Annually, nearly 1,000 companies seek funding through FiBAN. Additionally, FiBAN publishes investment statistics and research data on investments made by angel investors.
You can find more information on FiBAN’s data at fiban.org/data
More information
Ivan Helin
Data Engineer, FiBAN
Email: ivan.helin@fiban.org
Phone: +358 45 7838 7905
Milja Mäkelä
COO, FiBAN
Email: milja.makela@fiban.org
Phone: +358 50 460 5918