Fonecta, the Finnish directories business that was founded in 2002, is known to be the largest acquierer in Finland. With a turnover of around 190 million euro, they understood that the directories business is not exactly a growing industry so M&A became a core strategy in keeping up with market developments. So as a result, in the past ten years, they have purchased over 70 companies from various industries.
According to Mikko Pirinen, the director of M&A and Partnerships, to date they have been doing mergers and acquisitions mainly as a growth strategy. That is, in addition to organic growth, when Fonecta saw a ready businesses that was operating in a direction that they were headed anyways, they tended to buy. "If the price is right, it buys us time and we can get to the market quicker. " says Pirinen.
Fonecta also used to integrate each new acquisition into one of the four business units. In essence, buying market share and innovation.
However, as Pirinen told Arcticstartup in an interview, this is about to change. Fonecta, realized that it is not just about market share, but also the long-term vision and for that, they are going to start minority investments into startups.
As Pirinen said: "The shift began around two years ago. For example they hired me, before which there was pretty much no startup visibility for the company. They figured out that in order to be active in the startup scene, they have to understand what they are like."
One of the changes they have done is a "non-binding agreement" to be open to meetings with startups, investors & entrepreneurs. According to Pirinen, he has personally discussed with over 200 entrepreneurs since August.
The company said that they are ready to invest at any stage, starting from as low as 50 000 EUR, going up to several million in more established companies. For those of you outside of Finland, Pirinen told us that they are also willing to invest into companies from the whole region.
"We understand that startups have very good innovation and very quick development cycles. By acquiring a small stake, we provide the fuel so that they can grow even quicker. In exchange for that, there tends to be a commercial agreement and Fonecta also gets the technology or service to distribute in Finland."
The last part might be a cause for concern for some companies, however others will benefit from it as that means that Fonecta will be willing to start selling your services to some 70 000 customers in Finland and four million consumers is excellent exposure too.
Pirinen also told us that this does not mean that they have stopped acquiring companies, or that the pace is going to slow down. Instead this seems to be a change in strategy, which is yet another sign that large corporations are becoming more and more startup-friendly in the region.