I attended Software Sales Camp seminar organized by Tekes (the Finnish Funding Agency for Technology) earlier this week. The event was a two-day "bootcamp" aimed for improving Finnish software firms' business-to-business sales and marketing skills. Going forward, I will summarize a few interesting tips and experiences shared by the seasoned speakers at the event. One main theme throughout the event was also the U.S. market entry and issues related - I will get back to that later.
On Monday Fruugo, a Finnish startup that in 2008 burned through € 14.5 million, laid off roughly 20 of their 50 employees, which equals to 40% of their whole work force. Fruugo CEO, Juha Usva, confirmed the news to me yesterday evening.
When I asked how much money Fruugo still has in the bank and how long will it last, Usva emphasized that 'the situation is tight'. According to some this means that Fruugo won't have enough money to pay their employees' monthly salary due on the 15th. Whether that's true or not, the financial situation of the company is clearly critical.
While presenting at the MindTrek Launchpad competition in Tampere (Finland), LinkoTech CEO, Tero Salonen, just announced that the company has closed one 0.5 million US dollar first round funding for its Dazzboard product, and is in the process of closing the other half of the round, totaling to 1 million US dollars. The 0.5 million investment comes from Finnish investors.
Dazzboard is branded as an 'Open iTunes'. Dazzboard wants to become a non-proprietary, web-based personal portal for storing, organizing and sharing (via different of social networks) songs, photos, videos and other media content.
We have our worries with the product and the experience, but I'm happy that Dazzboard team has found believers that are willing to invest in the company. Congrats to the team!
Illtags, a Finnish startup that also took part in Slush event, aims to keep us a bit more healthy by letting us broadcast how we feel online. The service is founded by two young guns, a developer and a doctor, that I would call social entrepreneurs.
Illtags aims to combine two things for its analysis: 1) Tags depicting symptoms inputted at Facebook, Twitter or illtags.com and 2) Places, events and groups where users might catch or spread a bug. The strength of this approach is that all of this information already exists in social networks. By combining these two elements Illtags aims to analyze how diseases are spreading across social networks at an individual level, and let us avoid the places where the flu has taken over.
The service has a website, but just as with Dopplr that was acquired by Nokia, with Illtags you don't really have to visit their website as they aim to integrate deeply into other platforms. Currently they are putting their bets on Facebook as most us are there already and we many times let our network of friends and family know when we have a cold or a flu.
There has been talk a feed-in tariff for biogas (and wind) will finally be introduced in Finland. Biogas plants convert biological waste into energy and producer power, heat and/or fuel. The earning logic of a typical biogas plant is based on port fees, power & heat production and end-products like composting material. In Finland, the feed-in tariff for biogas plants has been on the environmental agenda since 2007.
According to the (as yet unconfirmed) rumours, the planned target price for the biogas feed-in tariff is 83.5 euros per MWh for power production (which equals the planned feed-in tariff for wind power in Finland) and around 30-40 euros per MWh for heating. In this system, a biogas producer is assured a certain long term (15-20 years) guaranteed price. We do not yet know if there are plans to introduce feed-in tariffs for other biogas-based fuels, for example those used to run motor vehicles.
The Finnish social gaming firm Ironstar Helsinki has announced appointing a new CEO Tiina Zilliacus and expanding its platform reach to Facebook. Ironstar Helsinki runs a social gaming world MoiPal, which up until now has been available on the web and as a downloadable mobile application. MoiPal has currently 200.000 registered users in Finland along some international ones, and is now looking to accelerate the international growth.
Timo Ahopelto, Blyk's Head of Strategy and Business Development and a co-founder and the founding CEO at CRF Health is leaving Blyk to join co-founders of a new Finnish startup accelerator, Lifeline Ventures. Lifeline Ventures is also part of the Vigo initiative (see our previous story on Lifeline Ventures here).
Ahopelto said that he has enjoyed his time at Blyk, being part of the very first team, but that he had been thinking about setting up a startup accelerator already for a while, and when the team heard about Vigo they didn't wait. Blyk moving to its mobile operator partnering model, Ahopelto assures that Blyk is growing fast and the future for the company as youth media looks promising, even though some have their doubts. As an example of the new evolved strategy is Blyk's first deal with Vodafone in the Netherlands, where Vodafone will provide Blyk-branded consumer services to young people under Blyk user experience and ad formats.
Two Finnish startups, MySites (see our previous story here) and Dazzboard (see our previous story here) announced recently that they will partner up: MySites which has completely rebranded itself as 'social cloud storage' is now offering Dazzboard users (as well as everybody else) unlimited amount of data storage for free.
We talked to both, MySites and Dazzboard CEOs, to get to the bottom of what is happening with the services and what the co-operation is all about.
MySites, for its part, is going head on againts services like Dropbox or even Mobile.me, which are cloud storage services primarily for consumer use. Ramine Darabiha, MySites CEO, emphasized that "MySites is going for the social angle. Not just a file service, but the best way to share files while you're on Facebook and on Twitter." Darabiha adds that "MySites is aiming to be the most Facebook friendly cloud storage service by integrating with many Facebook features such as friends and commenting to name a few".
Somewhat surprisingly, one of the most efficient wind turbines on the market is coming from Finland. A good reason for us to shed some light on WinWinD and their excellent products. Jari Varjotie, the COO of WinWinD, took some time out of his schedule to answer my questions.
WinWinD was established in 2000 in the city of Oulu in Finland. The founder, Jouko Tiuraniemi, has a long career in the field of energy. In 1995 Tiuraniemi started to think about a new, highly efficient wind turbine, as he realized that the key to success was not to try to compete on their terms with the Germans and Danes who were dominating the market, but to create a turbine that would be technically superior. WinWinD chose the Multibrid technology as basis for the WWD turbine, and going forward with the Multibrid low speed technology was the first strategically important decision for the company. In 2001 the WWD-1 wind turbine pilot project was completed. The WWD-3, a 3 Megawatt turbine, followed in 2004.
A new report by Technopolis Online, a for-pay information tool for all high-tech financing activities in Finland, states that Finnish high-tech growth companies raised almost €51 million in the first half of 2009, which is a 17% decrease from the first half of 2008. In addition, Q2 2009 decreased more than 50% compared to the prior year.
Let's break down some of these figures. To put things in perspective the €51 million was raised by total of 29 Finnish high-tech companies from both, venture capital and angel investors. This was 17% below the amount raised by 34 companies in the first half of 2008, and 74% below the amount raised by 26 companies in the second half of 2008. For anyone who has followed the recent trends, not surprisingly the second quarter of 2009 was the lowest quarter recorded since 2007.
Mindtrek is the annual conference for social media, web 2.0 as well as digital media and business in general. In 2008 the conference gathered about 800 people from 32 countries with 150 foreigners attending the conference. ArcticStartup is extremely happy to be participating in this leading conference in its field. We will be helping out with the conference this year, so you'll be able to catch some visibility on our blog as well if you happen to participate. Mindtrek will be organised between September 30th and October 2nd this year.
Why do we like Mindtrek? Simple, the prizes are magnificent and without competition. This year, Mindtrek is hosting its launchpad competition to startups and innovative people with ideas. The main prize is 20 009 € including business sparring, internationalization, growth and financing services provided by Tekes, Finnvera, Technopolis Ventures, Finpro, Diges, Lexia, and Hermia. A lot of help and money to be won through a simple competition. It's not too pricey to participate either - entries are only 150€ per company. You can find more information on the competition on the Mindtrek website and to register, you should follow the instruction over here. The deadline for entries has been extended to August 31st.
Jerri Laine is the CEO at Innavation Manager where he helps companies with their Tekes and T&E-Centre funding proposals.
Tekes, shorthand for the Finnish Funding Agency for Technology and Innovation, is publicly funded expert organisation for financing research, development and innovation in Finland.
I have been asked this question dozens of times - as in the past I have been working in Tekes for seven years in evaluating all kinds of project proposals.
Since the year 2000 Tekes has grown to an icon of Finland’s innovation success story and it has had its implications. Tekes’ budget has grown remarkably, it’s staff has been grown and changing and it has got a lot of new norms, instructions and directives from it’s owner Ministry, from internal inspections and of course from EU. In short Tekes has got bureaucratic.
Calibre One, an American corporation focusing on executive search has released an investments summary from the second quarter of 2009. In this summary, they outline the investment market to gradually bounce back in Northern America, while it slightly dips in Europe and cuts to about a quarter in Northern Europe. Their data is based on early level Tech investments and thus does not fully shed light into the whole market.
In Northern Europe, $56 million were invested in 9 deals in the second quarter according to Calibre One while the respective figures for Q1 were $219 million in 14 deals. The nine investments for Q2 in Northern Europe were Teklatech ($6,9M), Imbera ($15,7M), Aava Mobile ($4,1M), eZ Systems (undisclosed), Hexaformer ($4,5M), Tobii Technology ($22,2M), Swebo Bioenergy ($1,9M), Alternativ Media (undisclosed) and Accumulate (undisclosed). The country breakdown lists 5 investments to Sweden, 2 to Finland and one investment to both Denmark and Norway. While this is no way is the complete list of course, it might give sense as where we are with regards to the trend.
Everyplay, a Finnish social gaming startup founded last year, has come out of stealth mode and released a product called Kamu World on Facebook. It is a "virtual hangout place" featuring edgy "Kamu" characters ('kamu' also means 'a buddy' in Finnish).
Kamu World in its current form is essentially a collection of visualized virtual characters and chat rooms, with few game-like features. It has compelling and very polished look and feel already, though. When entering the world, players create their own Kamu creature, and choose a location around the world (e.g. a game arcade in Tokyo) to meet other Kamus in. Kamus appear as small, desktop-size creatures, smaller than for example a drinking glass.
Little known Finnish beta service called Emotionr has been sold to Zallas Technologies in the US. The price was not disclosed, but my guess is that we're not talking about astronomical figures here based on the complexity of the free service. Furthermore, the service does not show significant amounts of traffic data in Compete.com statistics so the price for it might be a symbolic one.
Vigo, a Finnish government run program to strengthen the currently rather dismal foundation of Finnish risk capital ecosystem and to create international venture accelerators and investors in Finland (see our previous story here), has come to an end and now it's time to see what we got. And it does not look that bad at all.
In total, three venture accelerators where chosen by the steering board, which was lead by Mr. Risto Siilasmaa, Chairman, founder and former Chief Executive Officer of F-Secure Corporation, Member of the Board at Nokia and a prominent business angel among other things. It seems that the Vigo steering board was looking into finding teams to cover various different industries and compliment each other instead of creating competition into the Finnish venture capital scene. They seems to have found three such 'mutually exclusive' teams to fit the bill, namely Lifeline Ventures, Lots and Veturi Venture Accelerator. Here's a short description of each in turn.
As soon as Ilkka Tiainen, Oppifi CEO, told me about the service I thought of MyHeritage and Geni, but as he quickly pointed out Epooq, Oppifi's first product is more about subjective count on our memories than objective family tree what the two formerly mentioned services focus on.
Oppifi, a Finnish startup, is aiming to build solution for gathering and sharing subjective 'life-experiences'. We all have our own experiences from the life that we have led and whereas many of us have aimed to get all those memories between the covers of a scrap book, Oppifi wants to help out by giving us better digital tools to do it. The founders are confident that there are demand for a such a service from the get go and will also charge the user from day one.
The service is still early stages, but we got a quick look at the alpha version and talked to the team about the service. See the video below.
Pikkoo has teamed up with Foreca weather service and introduces Foreca Live Weather Screensaver for mobile phones. The product is said to bring interactive location based weather forecasts to mobile from 140.000 locations worldwide.
When talking about car manufacturing, one normally thinks of Germany, Italy, France, Japan and the USA. Finland, on the other hand, comes seldom to one's mind. That much more interesting it is to see that a plug-in hybrid is build right here in Finland, the Fisker Karma.
The Karma is, as Fisker puts it, "a beautiful and environmentally friendly car for people who do not want to compromise luxury". The car uses a small gasoline engine which turns the generator that charges the lithium ion battery pack, which powers the car in normal use. You can configure the car so that it comes with a solar roof which helps to charge the car. The car drives 80 km before it starts to run on gasoline, and it seats four plus sufficient place for luggage. Finally, the design is beautiful, and conveys the image of speed and luxury.
Valmet Automotive is the company building the car in Finland. Valmet signed the deal with Fisker Automotive in November 2008 and production will start an the end of 2009. Their plan is to reach a volume of 15.000 cars per year, while the contract between Valmet and Fisker runs for several years. The reason that Valmet was chosen over their competitors was the quality and speed necessary to reach Fisker's production goals, and because more than half of Fisker's sales are expected outside of North America: Valmet represents an ideal international foothold, according to Fisker Automotive CEO, Henrik Fisker.
Kauppalehti had a good article on one of the less known Finnish game studios, Lapland Studio. They are a small game studio located up in Rovaniemi, Finland and are designing games for many platforms, from mobile phones to the latest new market Nintendo Wii. The company was founded in 2004 and has a revenue of about 420 000 euros for year 2008. They have been steadily growing and avoiding creating too much loss as they grow, the largest loss in 2007 worth less than 10 000 euros.
Lapland Studios has been previously providing outsourcing services to advertising agencies, film studios as well as some game developers. They also have two seperate subsidiary companies; Mine Studios and Inaria Interactive. Mine Studios concentrate on mobile games while Inaria Interactive will expand into the console gaming market.
As I was looking at through the companies presenting tonight at the ArcticEvening Copenhagen (it's going to be a very good event by the way!), I noticed that almost, if not all of them are business-to-business companies. This is an interesting trend in my opinion as Finland and Sweden are in my opinion more oriented towards the consumer market.
Finland, which I know best, is very oriented towards the consumer market in terms of internet oriented startups. We have our share of b2b startups as well and if we go back a bit we can remember that SteelTeam acquired Christoffer Landtman's CompanyCube operating in the steel industry. Then again we need to remember that Jaiku was acquired by Google so there are acquisitions on both fronts. Unfortunately there aren't many more cases that could be given as examples.
Espoo Otaniemi boomed of startups and investors when Invest Tech Finland was held for the first time on last Tuesday and Wednesday. There was a real mix of companies from all round consumer web, nano, medical and material tech.
We got some taste of new startups, more seasoned companies seeking growth and some familiar faces marching forward with their plans. There were quite a few interesting companies to write about, the full list can be found here - check these out. Note that most of companies presented at the event already had some prototypes, partnerships, customers or revenues. Here is some of my picks (not in any particular order):
Concilio Networks has finally released a public beta of it's Snaptz service (only for Finnish mobile phone number for now). The service let's you see the availability status of your friends in internet communities, set your own status and chat and talk with them using ordinary mobile phones. Snaptz works with the most popular Internet-based services like Gmail Chat, Google Talk, Yahoo! Messenger, Windows Live Messenger and ICQ. A promising idea for a service.
As good as it initially sounds, after landing on their site, I got confused. The website could be more clear on the terms of what's free and what I need to pay for . 'Chat'-services are universally seen as free services so I was not sure what will be a paid feature and what won't when the promotions run out.
Aava Mobile develops smartphone platform designs based on open technologies such as Linux and Android. The open platform technology will provide more flexibility for original equipment manufacturers (OEMs) and mobile operators to incorporate their own brand, user interface, content, and services into the devices.
The platform includes both hardware and core software components, and thus according to the companys accelerates the development of new handset models significantly. Similarily flexibility of the open platform design brings new business opportunities for application developers as well as mobile operators.
Last week I talked to Artturi Tarjanne, a venture capitalist and a General Partner at Nexit Ventures in Helsinki, Finland.
You can find the first part of the interview here. In the second part (see video below) we discussed on what kind of companies Nexit is looking for and how you can approach Nexit if you're a startup.
We touched on the quality of current and past deal flow in Finland. Tarjanne told me that even if we may lack in business skills vis-a-vis say the US, our technology skills are very strong even compared the Silicon Valley. This is the same message that for example Richard Allan Horning, a Principal at Fish and Richardson, a very prominent law firm in Silicon Valley, echoed in Tallinn just last week when we met him.
erAce Security Solutions has launched a mobile firewall for preventing SMS attacks on smartphones that could result in an attacker hijacking mobile data connections. The product is called Settings Firewall and it is targeted Symbian and Windows Mobile operating systems (more info, PDF).
There has been a lot of discussion on possible SMS vulnerabilities lately. For example, F-Secure has reported the first ever SMS worm, and just end of 2008 there were headlines about the Curse of Silence denial of service attack. It is often deemed as just a matter of time before the first more serious threats appear.
Venture Capital is in flux. Some say it's frozen over and funds are pulling back, and some say it's the best time to invest and find the next Googles and Facebooks. Everyone, including us , has an opinion on the topic.
Earlier this week I talked to Artturi Tarjanne of Nexit Ventures and asked what Nexit is doing in the current down market. Tarjanne has been one of the most active actors in the Finnish venture capital market and pivotal in building the emerging US-style venture capital market in Finland. We talked about how Tarjanne ended up to be a venture capitalist, what lead to Limbo to merge with Brightkite and why Nexit Ventures operates in two very different locations: here in the Nordics as well as in the Silicon Valley. We also discussed Nexit's investment strategy and how they see the current handset market. Check out the video below.
Estonian Development Fund has launched new seed business incubator, SeedBooster. The purpose of the incubator is to help develop early-stage businesses to get them mature enough for venture capital financing.
However, the leader of the SeedBooster project, Andrus Oks, comments that the new incubator is actually nothing that much new - it is in fact part of activities Estonian Development Fund has performed already for some time, now just productized and branded. Targeted firms are ones operating in Estonia with a strong desire and possibilities for fast international growth.
So far SeedBooster has taken in for example programming analysis firm Programeter (which just won the runner-up prize in the elevator pitch contest) and website platform developer Edicy (our previous coverage) under its wings. The incubator is looking to include further 5-6 new projects within the next month.
We were surprised by the news and called around to see what was the case and found out that the guys at Comeks were equally at ave after hearing the news. Clearly there had been a misunderstanding of some kind.
To be sure, we wanted to let the dust settle and see whether Comeks is still in business after couple of months.
Couple of days ago I talked with the Comeks co-founder and CEO Arto Viitanen and he answered from the Comeks office and told me that he did not have much time to talk as he was hacking away on Sunday night for the looming deadline. Clearly Comeks was and is still in business.
QAim, a Finnish mobile startup, has gotten Series A funding from Veraventure along with private investors Tapio Heikkilä and Olli Oittinen (press release in Finnish). QAim focuses on improving mobile services usability.
QAim will use the funding to finalize the piloting of their CEM4Mobile product and begin the foreign sales focusing heavily on five European countries within the next three years. (QAim has been looking for new talent also through the Job Board on ArcticIndex.)