Finnish growth investments 2015 – Over €250M in 400 growth companies
March 24, 2016
The Finnish Business Angels Network (FiBAN) and Finnish Venture Capital Association (FVCA) have released their statistics on private investments and private equity investments in Finnish companies in 2015.
The total amount invested in Finnish early stage companies in 2015 was 253 million euros. The statistics include Finnish venture capital investments (96 M€), direct foreign investments (94 M€), business angel investments (37 M€) and other sources of finance including crowdfunding (26 M€).
A closer look at Finnish angel activity year 2015 here
“Investments in Finnish early stage companies reached a new record high in 2015. The year 2016 has also started off well when Finnish company M-Files raised one of the biggest funding rounds in recent history in Finland,” comments Pia Santavirta, the Managing Director of Finnish Venture Capital Association.
Investments in Finnish early stage companies are now 2.5 times greater than in 2011. However, there is still room to grow. “For instance, attracting international venture capitalists and fund investors to Finland is very important,” says FVCA’s board member, Sami Lampinen. When the teams of Finnish startups and venture capital investors’ get more international this increases the interest of international investors’ even further.
Positive development could be accelerated with changes in national legislation. “By making it easier for non-profit foundations to invest in private equity and venture capital funds, more capital would flow to Finnish early stage companies,” says Santavirta. As the Council of Finnish Foundations has stated, Finland needs all the capital available to fund companies and new innovations.
“In 2016 Finnish private investors will have a more important role as the Finnish public financial institutions, like Finnvera and Tekes, have moved away from early stage direct investments, and focus now in supporting the startup ecosystem through funds”, says the Chairman of Finnish Business Angels Network Jaakko Salminen. This change in the public institutions’ strategy might affect the investment activity negatively in 2016.
However, the Finnish private startup investment ecosystem has developed rapidly, with FiBAN now the largest and most active angel networks in Europe.
Finnish business angels invested in 271 startup companies in 2016, which is an increase of more than 10% from the year before. So far angel investment activity is estimated to have created 13.000 jobs in Finnish startups. In 2015 the median investment per round of an individual angel investor decreased from 25.000€ to 20.000€. This is a sign of a matured angel investment culture, where investors decrease risk through diversified investment portfolios and co-investing.
HOW TO INCREASE STARTUP INVESTING ATTRACTIVENESS IN FINLAND?
- Diversity of fund investors
Ensuring a diverse base of fund investors is important for raising new venture capital funds. Fund investors can be governmental agencies, family offices, corporations, pension funds, insurance companies and private individuals, to name a few.
- Growth investments from non-profit foundations
The tax treatment of non-profit foundations could be changed so that venture capital and private equity investments would not be less attractive than other types of investments.
Internationalization of venture capital investors and early stage companies is essential for growth. It attracts international venture capital and fund investors to Finland.
- More private investors
Finland has a well established and internationally recognized startup investment culture. New investors should be actively inspired to join the startup investment field. This can be done through active sharing of startup investing best practices, and implementing international, well established public models to support startup investing (tax benefits).
- More cooperation between Finnish corporations and startups
A number of Finnish major corporations have discovered the possibilities of close cooperation with startups. More corporations and established companies should join this development.
FINNISH ANGEL INVESTMENTS
- Record amount of companies (271) received angel investments through FiBAN members in 2015.
- The median angel investment size decreased to 20.000€ per round, per investor. Angels aim to decrease risk through diversified investment portfolios and co-investing.
- More cooperation between Finnish corporations and startups would support new business development and eventually lead to a increased amount of angel exits.
Additional information: www.fiban.org/news/finnish-business-angel-activity-2015
FINNISH VENTURE CAPITAL INVESTMENTS
- Private sector investors have an important role in funding high growth companies.
Public sector venture capital investors 2011: 38 M€ -> 2015: 25 M€. Private sector venture capital investors 2011: 39 M€ -> 83 M€.
- Co-investing with venture capital investors gaining popularity.
The share of investment rounds with at least one co-investor has been steadily rising and reached 86 % of all investments in 2015. In 2008 only 38 % of deals were done with a co-investor.
- Average size of investment has remained moderate.
On average, Finnish venture capital investors invested 600 000 € per company.
- Finnish venture capital funds raised 107 M€ for new investments.
The capital raised will be invested in early stage growth companies during the next few years. The fund raising sources include governmental agencies, family offices, corporates, pension funds, insurance companies and private individuals.
FINNISH VENTURE CAPITAL ASSOCIATION (FVCA)
Finnish Venture Capital Association (FVCA) promotes the interests of venture capital and private equity investors and their positive impact on growth companies and wider national economy. Majority of Finnish private equity investors are members of the association. Private equity investors – Building growth.
More information: www.fvca.fi/en
FINNISH BUSINESS ANGELS NETWORK (FIBAN)
FiBAN is a Finnish, national, non-profit association of private investors that aims to improve the possibilities for private persons to invest in unlisted potential growth companies. The association’s work is based on the activity by private investors and cooperates with networks supporting high-growth goals.
The FiBAN network is today one of the largest and most active business angel networks in Europe with over 500 approved members and over 100 events held year 2015. FiBAN is a member of the European Business Angels Network (EBAN).
More information: www.fiban.org/about