Arctic Startup

As you probably know from our earlier posts the IVA conference was held last week in Tel Aviv, Israel. Now it’s time for a recap. I had an opportunity to interview Jussi Harvela, Pekka Roine and Kristian Järnefelt from Concilio Networks who all participated in the event. They all agreed that the whole trip was a success.

The Finnish delegation of fifteen people attended the conference (with total of 1700 attendees) itself and the companies also pitched for a selected VC audience just after the conference. Furthermore, all eight companies had private meetings with potential investors and partners. The advice from the experts (check the video) was clearly followed by the companies as the quality of pitches was described as “very good” or “excellent”. The Finnish companies were pretty unknown for Israeli VCs who were anyhow impressed by the absence of “me-too” startups among the pitchers.

Mr. Järnefelt also provided some personal insights on Israeli business as well. He said that Israel resembles Silicon Valley a great deal and many of leading US VCs are also present in Israel. There are quite a lot early stage capital available and a bubbling startup scene as well. One notable thing is the amount of serial entrepreneurs who yet are rare (at least in software business) in Finland. According to Mr. Järnefelt Israeli startups have a strong level of ambition in general and the incubators (that acccept only 3-5% of applicants) encourage such behavior. However, one thing the Israeli ICT segment yet lacks is “a Nokia”, so that gives the Finns something to chat about.

One the trip’s goals was to deepen the co-operation between Finland and Israel. Thus, representatives from Finnish Ministry of Employment and the Economy, TEKES, Finnvera and Technopolis Ventures got a first-hand look on, for example, the Israeli VC industry and the incubator system. After the Finnish delegation returns we hope the co-operation gradually deepens and gains momentum. The signs seem promising in any case.

There were discussions that an Israeli delegation consisting of VCs and government officials would visit Finland sometime during the Autumn. It would be great if Estonian and Russian startups could attend such an event along with Finnish companies. We will keep you posted if and when we hear more of this kind of plans.

In conclusion, an excellent event and we hope to see a more deeper interaction between Israel and Finland in the future.

The investment groups Ambient Sound Investments or ASI for short (from Skype fame) and Seed Fund Vera make an equity investment in Senseg, a Finnish company developing a breakthrough touch interface technology. The sum of the investment remains undisclosed.

Senseg is one of the startups whose journey to Israel to meet Israeli investors we have been following. It only makes sense that Senseg comes out with the announcement right before they pitch to the local VCs on Wednesday, May the 21th to capture the full benefit of the announcement.

Senseg has developed a new technology to produce touch-like sensations. The technology has a wide range of applications, for example generating the feeling of virtual buttons on smooth surfaces such as mobile phones and other touch screens. Iphone with a keyboard you can actually feel, anyone?

Dr. Ville Mäkinen, Senseg’s CEO, described the technology nothing short of revolutionary:

Senseg’s technology is something completely different. It is a novel communications technology based on human sensation. […] The technology has unrepresented potential. I can be licenced easily and used in hundreds of different ways and applications. Senseg’s technology can therefore initiate a significant and fundamental change in how consumer gadgets are designed and used.

According to Moaffak Ahmed, Chairman of Senseg, the technology will be available for a select group of equipment manufacturers in the second half of 2008 and be officially launched when the first products are introduced to the market, which he expects to be in 2009.

Arctic Startup will follow Sensig and other Finnish startups throughout the week and report on how they manage to attract attension from the VC scene in Israel.

As Antti reported earlier we are closely following the Finnish companies that will be pitching to Israeli VCs at the IVA conference. Last Wednesday we had a chance to witness the final preparations of these companies for the event. Concilio Networks, Eniram, EpiCrystals, SenseG, and Whatamap did a dry-run of their pitches, which were then commented by seasoned professionals (incl. Jussi Harvela, Moaffak Ahmed, Pekka Roine).

Pitching is hard, if you want to do it properly. You have to keep your pitch length at eight minutes, you face a VC audience that sees thousands of pitches every year and you only have about ten to fifteen seconds to get everyone’s attentition. So what can you do? Here are some advice from the experts:

1) Focus, focus (never say “..and here’s a few more things you can do with our product”)

2) Reveal your value proposition first, then a concrete use case

3) Focus on a single benefit, provide ROI

4) Tell a story, but use a format (like news broadcasters do)

All the above-mentioned Finnish companies are in Israel at the moment. They will pitch on Wednesday, May the 21th and have many pre-scheduled meetings and events prior to that. We try to get a word from the field so keep an eye on our future coverage.

Another Technopolis event coming up is MoneyTalks™ Forum Special on 8th of May, claimed to be the largest investor event in Finland during the spring of 2008. The event is invitation-only and targeted to VCs, business angels and promising high-tech & innovation based start-ups seeking financing. Companies interested in pitching in the event should check for further information.

The bi-annual special event promises to feature the rising stars of the Finnish high-tech scene and prominent early stage investors from Finland and abroad. Participants should have plenty of opportunities for one-one-one meetings with investors and entrepreneurs.

Photo by cpalmieri.

TechCrunch reports more difficult times ahead for companies looking for funding in Silicon Valley. Overall, the number of M&As have gone down, as well as IPOs and the total value of disclosed M&A deals. When in US, they report on quarterly figures, we have to settle for annual figures (which are increasingly late as well) here in Finland. Then again, our market domestically is in very early stages (the average size of a venture capital investment in 2006 was a mere 680 000 euros).

While I don’t believe the effects of the downturn have hit Europe yet, I believe they are on their way. Any comments from the field would be appreciated on this topic, like always :)

Being the founder of the blog, I’m very very glad to announce that we have secured funding from two Finnish venture capitalists. The money will be used to hire a full time blogger and expand the services overseas to other Scandinavian countries. We are still in talks of publishing the two private investors in the near future.

We’re thrilled of course, needless to say. However, we won’t be selling this blog so the focus will be kept critical and analytical in the future as well. The blog was started in 2007 with a suspicion that I will have time to continue writing it. Soon it gathered momentum and I had sort of an obligation from the fans and companies to continue on the track I’ve chosen. With this funding I see that our efforts have not been in vain.

A huge thanks to all the readers and companies involved - I’m starting of the day with a bottle of champagne :)

I and Miikka had a chat yesterday with Tatu Laurila, CEO of Greater Helsinki Promotions about a venture they are organising for Finnish startups and prospects to Israel. Greater Helsinki Promotions is co-organising the event with Technopolis ventures.

Ten of the finest Finnish companies eligible for this venture will be sent to Israel to the IVA Hi-Tech Conference 2008. The event is held in Tel Aviv 19.-20.5.2008. The Israeli Venture Capital Association (IVA) has offered the Finnish organizers an opportunity to bring 5-10 promising start-ups plus an accompanying delegation to Tel Aviv for IVA’s annual conference, which attracts about 1,500 global players from the high tech industry, including VC and Corporate investors. Large number of global VC’s will attend the conference. The estimated cost for the whole program is a maximum of 5000 € at the maximum, a more exact budget will be available in the next couple weeks.

Deadline for enrollment is 2.4.2008. If you’re interested, contact Will Cardwell of Technopolis Ventures for more information on how to apply.

For those who are unaware with the startup and entrepreneurship environment in Israel, it is a lot more effective than it is in Finland. The countries themselves are similar in size and population. With a focus on entrepreneurship and a 15-year strong track record, Israel has managed to enlist over 100 companies to Nasdaq and there seems to be more in the pipeline. There’s definitely a lot there to learn. Arctic Startup will try to cover the process, preparaion up to the event and the event itself as thoroughly as possible. Stay tuned!

Eniram received a major investment from Conor Venture Partners earlier this month. The exact amount was not disclosed, but it’s believed to be around €1 million (major by Finnish standards). The purpose of the investment is to strengthen Eniram’s marketing and sales operations in order to expand globally.

Eniram was founded in 2005 as a spin-off from US-based engineering consultant Edec, which remains a partner to Eniram. Eniram focuses on the maritime industry, providing system integration solutions allowing its customers to save costs and lower emissions through lower fuel consumption. The team reportedly has a great deal of knowledge of the industry and software development. The rumor also has it that Pekka Roine from Conor joined Eniram’s board, bringing the company extensive experience of running technology and software business.

Press release.

First Line Angel Group FLAG.fi, a Finnish business angel community with a global reach, is launching on 25-26th of February 2008 at EU EASY Event in Milano, Italy. FLAG.fi is stated to be the the first and only global portal dedicated to investors, entrepreneurs, and business angels.

The founder Peter Bougdanos, a well-acclaimed business angel, hopes FLAG will be “a solution to the startup situation in Finland and all over Europe”. The problem statement manifests that many entrepreneurs and opportunities go unnoticed and/or unfunded in Finland - and also in Europe in general - because of a lack of a true angel community, consensus, support, and meaningful interaction among professionals in the field. This is something that was also identified recently in Growth Forum 08 as reported by Tomi. In addition many investors get caught up in long exit cycles, ending up tying up their valuable resources of time, money, and expertise.

The vision of FLAG is to become the first true Angel Group in Finland which mirrors the activities of angel groups in the USA. It’s mission is to make Finland, Finnish companies, Finnish business angels, and the Finnish venture capital industry a healthy, competitive, and interactive community. FLAG targets to create a currently missing dynamic forum with both a professional and social function for business angels to meet and discuss angel investments. Peter Bougdanos aims to promote Finnish startups and help them “get the commercialization and business concept traction that many fail to do”. Recent members of FLAG include online business traveller tool Dopplr and free news service forum ampparit.com.

The service will be Finland centric, but it’s claimed that already over 3000 pan-European interested members have been identified, and the majority of them have expressed keen interest to enroll. FLAG also looks to integrate Middle Eastern and Asian flare of active members. It is planned to be the melting pot for existing angel associations, stand-alone organizations, network clusters, and independent actors on local, regional, and international levels, operating both online and offline.

FLAG will offer a whole community universe for connecting investors, with a wide spectrum of tools and services, including facilitating selling of companies angel-to-angel, and providing company information and management bios. FLAG also believes in giving back to the community and 25 percent of profits will go to funding stipends for young students, lower income families’ teens, and budding entrepreneurs to gain international experience, overseas exposure and professional and academics skills.

Greek American Bougdanos has helped to foster nearly 50 startups in Finland, since moving from NYC after surviving 9/11/2001. His background includes investments in companies like Google, Skype, and Finnish Helmi Technologies, Nordic Koivu, FogScreen, Concilio Networks, and Trackway, among many others. Peter is also a founding partner of FirstRound Startup Center, which has a unique smart money approach to incubating fast track early stage companies.

It is great to see something of this scale being initiated in Finland, and hopefully FLAG will be able to give rise to new business angels activity and many new fast growing firms. If you’re interested in joining FLAG, be sure to check the web page. We can also put you in touch with Mr. Bougdanos, just drop a note at info [at] arcticstartup.com.

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Edit: I have heard there are some two-fold opinions on how Mr. Bougdanos works, so it’s advisable that you first discuss with people who have worked with him before jumping right in, to make sure there is a good match (as would be good with any new relationship in general).