You may have caught our past stories on Ovelin, the makes of Wildchords. The hot Finnish startup grabbed €1.1 million in financing from True Ventures last February, and their guitar teaching app has gotten critical acclaim the world over.
Currently Ovelin is hiring senior game developers, coders, game designers, and is growing the company further. At the moment the company is generally looking at new platforms and new instruments, and will be releasing some new packages soon that contain well known songs, but only from the public domain. Mikko Kaipainen, co-founder of Ovelin, wasn't willing to share anything else about licensing or future plans. But last week the company threw a party in Helsinki with the IGDA to promote their game and celebrate their successful €1.1 million funding round.
But Ovelin be considered a success story? They're still a young company, and they haven't really shown they can repeat the success of their first critically acclaimed app. But taken from the perspective of Tekes, Ovelin is a success story because their R&D funding has done exactly what it was designed to do. "The fact that Tekes funding has enabled this company to proceed with their development and reach already such good results is certainly also a successful example of our operations," Says Risto Setälä, the Director of Software and Digital Media Industries at Tekes.
"For us, Tekes was really important when we were in the early phase." Says Mikko Kaipainen, co-founder of Ovelin. "We were doing product development and concept development, and the R&D funding we got from Tekes was actually quite crucial for us when we consider the private equity markets in Finland."
Kaipainen and Ovelin had been looking for private funding in Finland in the year before they launched, and left disappointed in the angel investment market, and with the local investors. Kaipainen credits Tekes' R&D loan for helping them get their project to launch. "We are actually pretty R&D heavy with our signal processing, but in the end what we are doing is that we are producing a mobile app. What investors are actually looking for is that you can get the product released and get the initial traction. In this sense [Tekes' funding] really helped us find our investors."
Kaipainen had a little trouble finding his loan terms printed in English during Ovelin's due diligence phase, but aside from that, being funded by Tekes had only a positive impact on raising money from Silicon Valley. If there is any advice he could give to Tekes or other public funding agencies in Finland, it would to be to make the loan terms as simple as possible so it's easy to raise money further down the road.
"The R&D funding is very important in many cases, and I believe these agile new models, like Tempo, are a step in the right direction. And I have an understanding of what need there is in the field."
When asked if he had any tips for entrepreneurs getting started with Tekes, Kaipainen says that it's important that people don't look at Tekes like an ATM, and they should take time to see which public instrument, if any, fits their company's needs. Keeping good contact with your Tekes contact representative is important, as well as keeping your representative up to date by discussing things openly.
Hear it from startups
This series of posts is sponsored by Tekes and produced in co-operation with ArcticStartup to share experiences from startups about their funding experiences.