Finnish VC Inventure has invested 2 million USD into Finnish mobile publishing platform firm Conmio. The financing will be used to support Conmio's international growth and product development. Conmio sees many opportunities for expansion due to the strong demand for mobile services. Conmio's target customers include media firms, device manufacturers and other companies interested in providing mobile solutions to their customers or end users.
The Jaiku co-founder Jyri Engeström, who recently left Google (see our previous story here), has joined Xiha Life's board. Both Jaiku founders, Engeström and Petteri Koponen have switched into the dark side, namely after founding several companies of their own, they have now moved into investing in new startups.
Engeström has started to do angel investing in a chosen few companies, while Koponen co-founded Lifeline Ventures, one of the Finnish Vigo accelerators (see more on the Vigos here)
This might not seem like a big deal, but it is. Finland has been suffering from a deficit of investors that believe in and understand the consumer Internet. Just recently we wrote about the state of the Finnish venture capital and the picture was quite clear: We need more entrepreneurs that have succeeded in the consumer internet to share their experience, inspire(!) and invest in the young guns who want to reach for the stars, but don't have much more than a boat load of energy to start with. Jyri, along with Petteri, are clearly on the right path.
In the Arctic latitudes we have a condition that most others closer to the equator don't know of, its called Seasonal Affective Disorder (SAD), or winter depression for the rest of us. It is mainly due to the lack of sun light we get in these latitudes during the winter time. According to the all knowing Wikipedia in Northern Europe 2% of the population suffer from winter depression and roughly 10% feel slightly down beat during the dark winter months. I personally only need a bit more sleep during the winter time, but I'm pretty hyper anyway, so perhaps a bad proxy. That said, Wikipedia also tells us that Symptoms of SAD may consist of: difficulty waking up in the morning, tendency to oversleep as well as to overeat, and especially a craving for carbohydrates. Other symptoms include a lack of energy, difficulty concentrating on completing tasks, and withdrawal from friends, family, and social activities. Some might think one is just describing the average Finn.
I got a call from Kai Lemmetty, one of the co-founders of Floobs, that they are filing for bankruptcy either today or tomorrow. Not a very pleasant call to get by any means, as they've been one of the most passionate guys in the ecosystem and been doing a lot of good for the startup scene itself by helping out with organising and live streaming events. The simple reason behind the bankruptcy is that their sales did not ramp up quickly enough to support their current burn rate.
Massively multiplayer online games and Wii Sports are so last season, it seems. Uplause is a new Finnish gaming startup with quite an interesting a concept -- “Crowd Games” or Massively Multiplayer Crowd Playing Game (MMCPG) as the firm calls them. Uplause’s crowd games are developed for large events, where the audience can collectively participate in playing the interactive mini-games, real time, on location. See a quick overview of the concept in the video below.
The Future Just Arrived - Grey Area Is Developing A New Kind Of Mobile Gaming Genre From The Ground Up
Grey Area, a small startup operating in stealth mode, is gearing up to change the cityscape for everybody. I get back to how they are going to do this later in the post, but the story of how this startup came to be is equally interesting.
I first met the guys back in OpenCoffee Helsinki what must be more than a year ago. I remember Mikko Hämäläinen telling me how they were exploring possibilities to set up a company with two of his friends, Andreas Karlsson and Teemu Tuulari, from Ericsson. All three had started at Ericsson in 2003-2004 and met when they were put in the small team with the task of developing an Ericsson network node.
The Finnish Casual Continent aims to challenge the leading MMOGs with its new Crown of Byzantus browser based game. Speaking of leading MMOGs, one can mention Travia, OGame and Seafight which together have some 60 million registered users. All these games are directly playable from the browser and require no installation to the local computer. While the average revenue per user generated is only 1.5 euros, it is still approximately a 90 million euro market.
Kuneri has launched a limited Alpha of Mobile Joomla! as a way to easily mobilize websites made with Joomla!, a popular and extremely extensible open source content management system. Joomla! has a huge developer community and maybe some 30 million websites created using it, including quite a few corporate and high traffic sites.
Kuneri Mobile Joomla! allows out-of-the-box mobilization of Joomla! websites within minutes. The admin interface of Mobile Joomla! allows one to determine the mobile site outlook and optimization methods even handset by handset. One can for example have a higher end graphics and layout for iPhone and smartphones, and more basic site for feature phones.
The Nordics and Baltics are still very much a wild west when it comes to venture capital and building startups into real growth companies and all the way to the IPO dreamland.
All the countries have their peculiar histories when it comes to VC landscape and so does Finland. Will Cardwell, the CEO of Techopolis Ventures, wrote a very enlightening post called "Reeling in the last decade in Finnish VC" (here) on how the scene has developed in Finland what factors have influenced it.
Will starts out by saying that while there certainly are a lot of colorful stories, the thing that bothers him is the number of “success stories that got away. When assessing history track record he goes on to say that he emphasizes exits, since they are the only relevant measure of success for both growth entrepreneurial businesses or venture capital investing, and this area (exits) is precisely where Finnish companies have had the biggest challenges Cardwell's view. By looking at the figures one can't but agree.
The independent Finnish Internet is in a pretty sad condition when looking at the number of quality destinations let alone ones with significant traffic. There are two categories of websites that prosper however: Fashion blogs and knitting blogs (cooking, we believe, is also coming fast). Now a group of people have figured out that the former can also be a quite lucrative business if you collect all the eyeballs under one roof. Indiedays is exactly a destination like that. It's a portal and a platform for Finnish fashion blogs with 21 independent fashion bloggers and 19 fashion blogs.
The blogs have been ported from their old domains and now run on the Indiedays platform which is essentially a Wordpress blog. The company will place brand advertising on the portal landing page as well as to the individual blogs and is very likely going to sell their own advertising. The niche can be profitable and one of the easiest to monetize, but there are clear limits how big such a business can be in Finland. The 19 top Finnish fashion blogs will pull altogether roughly 100K unique weekly visitors, which is a clearly a very valuable audience for any fashion or beauty brand but won't scale into a business which for example Weblog Inc. had and what AOL is currently busy building. The best performing individual blogs currently have 20K to 30K weekly unique visitors.
Rightware is really a spin-off from Futuremark that was just founded at the end of 2009. At the same time the company announced the deal with Futuremark, they announced a closing of a €3m investment from Inventure and Nexit Ventures.
With the funding, Rightware will accelerate development and marketing of Kanzi. Kanzi is a taylor made solution specifically for mobile phones and automotive applications as well as Futuremark’s established device performance measurement products and services for mobile and embedded industries. Kanzi enables manufacturers of mobile phones and automotive display & infotainment systems to create richer and more intuitive user interfaces in radically less time than it takes with conventional tools and methods.
It's great time to take the first step with your New Year's resolution to exercise more, before you give up and forget it like you did last year. At least I did. Moozement, a Finnish startup offering a simplified training log for sharing your activities with friends, has rebranded itself and become HeiaHeia (see my previous interview with one of the founders here). "Heia! Heia!", pronounced similarly to "Hey ya, Hey ya", is a Norwegian sports chant.
The company states that the key driver for the development of the service has been to create a sports service which anybody could use with her or his friends - not just the devotees of a particular sport or the users of certain technical gear or the fans of a given brand.
The founders, Ivan Kuznetsov and Olli Oksanen, are both ex-Nokiates who took the infamous 'package' when Nokia started offering it to its employees to slim down the organization. HeiaHeia is one of the first startups that emerge from stealth mode, which has its roots in the Nokia package. I know there's other startups coming with a similar origin. I have even heard some people say that with the package, Nokia has done more to the Finnish startup scene than Tekes. I'm not sure about that, but it has certainly given a possibility for many people with long careers in Nokia of a runway of a year to year and a half to play around with their ideas before the reality hits and they need to start thinking about salary.
Today The Finnish Software Entrepreneurs Association issued a press release (here in Finnish) demanding tax exemption for Finnish startups. Jaakko Salminen, head of the Association, argues that the current Finnish tax legislation is not fair for startups in comparison to the BigCo. To fix this the Association proposes that those startups that fund their operations from their own profits and are owned by the entrepreneurs themselves should be exempted from the corporate income tax. This of course means that those startups are profitable. Further, the tax legislation should promote all the measures that lead to M&A activity that increases the size of the company. The Finnish Software Entrepreneurs Association also go on to argue that such measures push up the employment figures and increase the tax revenue in the long run.
Currently the heaviest burden from the Finnish taxation is felt by the early stage startups that don't use debt leverage as much as BigCo, are owned by the entrepreneurs themselves and fund their day to day straight from the accrued revenues. Salminen goes on to argue that being exempted from corporate income tax would incentivise exactly these types of companies to leave the money in the company to fuel the growth, instead of taking out every last penny through dividends.
We concur, but can't see how this helps the pre-revenue stage companies that are not profitable, which is the type of startup where the need for tax, or any break, is the biggest. Profitable and promising startups should not have trouble getting investors interested in the. Conversely, even the promising, but riskier pre-revenue ones do.
Steam Republic, a Finnish startup in the mobile space, is focusing on digital fan oriented marketing. They are big in mobile and want to enable bands to control the relationship with their own fans and consequentially make money through that.
Steam Republic was previously called Backstage Alliance. The company has participated and won several competitions under both names. Latest is the Appsfire App Star Awards where they were a finalist (see video below). They have also landed their first international agreement with EMI record label (UK) and are pushing out their first international pilot with You Me At Six already at the end of this week if all goes as planned.
Kauppalehti reports on some fascinating results from research conducted by Balance Consulting on the effects of growth companies in the Finnish economy. While I realise this data is very Finland centric and might not be of that much interest to others - I am sure these results will resonate in similar manner in other countries. We wrote about this in 2008 as well and it seems that the data, some one and a half years later is still very valid. The study was conducted by looking at companies whose revenue is above 1,7 million euros annually and belong to the Balance Consulting corporate databse. While the database is very thorough, it does leave a lot of the younger startups out.
Netcycler, a Finnish startup, wants to get us to recycle all the pretty things we own but don't need anymore. After talking to the founders they are also keen evangelize their own version of cradle to cradle thinking and want to make more than just money, even though that is part of the plan as well.
The service itself is still in closed alpha (we have invites though, see more about those below), although to me it's a full blown Beta and working just fine. You can put your stuff for people to see, include a photo, description and all the usual stuff. In addition to this there's quite a nifty way to find what you'd like to get in exchange: You can also create a Wish, where you tell the service what you'd like to get in return. After you have done this, it will automatically offer you that, if someone is willing to exchange such a product.
I talked with John Liljelund, the CEO of AW-Energy in Lahti, Finland a few weeks ago in the Cleantech Venture Forum. He discussed various aspects in how the company was founded and where they are at the moment with their product. Not only is the story behind the company very interesting, but he goes through in detail the different stages of investment the company has received including his own march to become the CEO of the company. AW-Energy develops a product called Waveroller which harnesses energy from the energy of the waves.
The Nordic countries, and especially Finland, have been strong in graphical software development. This has partially been reflected in the relatively large and successful gaming industry. Another area where this expertise has now had positive network externalities is the animation and movie industry in the form of 3D. For those unfamiliar with 3D movies, Wikipedia defines the technology as the process of including the illusion of depth perception. There's an interesting Finnish player in this area that has attracted quite a bit of international interest in the recent months.
Yesterday we reported that a big name team has come out with a new startup called Sofanatics. The team consists of Toni Laturi, CEO (former Valve managing director), Asmo Halinen (Apaja co-founder) as well as Sami Kuusela and Peter Nyman, a familiar face in Finnish television as he hosts one of the most known Saturday night shows Uutisvuoto.
We have gathered some further information and believe Sofanatics is a service focusing on sociel viewing. Wikipedia describes a social viewing service as a practice revolving around the ability for multiple users to aggregate from multiple sources and view online videos together in a synchronized viewing experience. Typically the experience also involves some form of instant messaging or communication to facilitate discussion pertaining to the common viewing experience. This would fit our earlier prediction of 'something with video, football and doing all this is a social manner.'
Remember Zipiko? The service with a "quick and effortless way to see what your friends are doing and a way to invite them to your chosen venue whether it’s it a local cafe or your own place for drinks, lunch or whatever you fancy."
Unfortunately the company that developed Zipiko, namely Zipipop, put the product development on ice already last June and moved on to service the growing Finnish enterprise customer base that is completely and utterly lost with social media wave that has hit the organizations. To scale their operations Zipipop, lead by its energetic CEO Helene Auramo, has teamed up with the former Managing Director of Accenture's Finnish and Nordic offices.
Richard von Kaufmann of Zipipop states in the company blog the following:
Tuxera is a Finnish software startup specialized in file system interoperability software. The firm has developed Windows-interoperable file system drivers for NTFS and exFAT, allowing device manufacturers who use Linux or other non-Windows platforms to still provide plug and play access to the files from Windows or Mac computers. It claims to be the only company currently providing such system drivers to device manufacturers who use Linux or other non-Windows platform.
I've been longing for a service like Last.fm, but for movies, for quite some time already. To my surprise, I had an e-mail waiting in my inbox last week regarding such a service. It's called Filmgator and it's still in beta, but the service works in the way you'd expect it to. FilmGator is a Finnish startup, based in Helsinki. The service aims to answer the question: "What are people watching?"
Sulake, the company behind the popular Habbo Hotel, a virtual world for teenagers with 14,600,000 montly unique visitors, has come out with a new service, Bobba Bar. Bobba Bar is virtual bar where, according to Sulake, you can meet and make friends. And it's not just any virtual bar, it's a virtual bar for 18-year-olds and over, so teenagers stay away.
Clearly, Sulake is going for a new market segment after conquering such a big chunk of the teen market with Habbo Hotel. I'm just not sure if big people will jump on the virtual world in the same way as teenagers have. I'm already realizing I spend way too much time in Facebook for no reason. Compared to wasting time in Facebook, Bobba takes a lot more effort is you plan to waste time there as well and I honestly just don't have any. After all, I have a Twitter to attend to.
Now, in all seriousness, I'm sure there are people who find Bobba to be for them, but I just don't think the number will ever get even close to the ballpark where Habbo Hotel plays in. That said, it might just well be that Sulake is just experimenting without any more expectations than I do regarding Bobba Bar, and if I'd be Sulake I would probably try it out as well given the success of casual games among adults. Sulake also touts the possibility to data people in the virtual bar, but its bit of a stretch to go there just to hit girls. Also, not surprisingly, in the near future Sulake plans to provide virtual content purchases inside Bobba Bar, so the business model is clearly there as well.
Eat.fi, a Finnish website that focuses on restaurant search and reviews, finally rolls out its business model after building the high quality site and community for three years. The company, quite predictably, has chosen to let the restaurant owners advertise their lunch time specials and other offers.
Even though you could argue that is has taken way too long for the founder Tina Aspiala to monetize the site, it might have been worth the wait. Eat.fi is one of the only Finnish sites that I use regularly when checking out new restaurants and especially while making lunch and dinner meetings. To get an idea of the popularity of the site, Eat.fi iPhone app topped the Finnish App Store and boasts currently about 12,000 downloads (and 2,000 Ovi Store downloads).
ThirdPresence, a product being created by the Finnish Ubipart, is a SaaS platform solution for distributing media on mobile phones. They were also present in the Nordic Venture Forum earlier this week and they did well, they received the best presentation award that will allow them to present at the European Venture Summit in Dusseldorf. What makes ThirdPresence an interesting service is that they've managed to really clearly simplify their offering and tackle one thing very well - the technology to distribute media to mobile devices.
As promised last week, we have opened up ticket sales for our Helsinki event. Please find the sign-up form below for registering to the event. Also, please remember that if you are unable to make it to the event, please don't sign up. We have a limited amount of seats available and would like to get everyone on board.
We'll be continuing our tour of the ArcticEvenings around the Nordics and Baltics with our next event being held in Helsinki, Finland. Our event will be themed software growth businesses. We'll be hosting a fabolous panel for you on the 27th of October. It will have some young, but extremely successful local startups from the software sector.
Finland made headlines yesterday with a news item that many media sites and bloggers echoed on; the government approved a law to make the 1Mbps internet connection a legal right for everyone in the country. I read many of the stories around the web and believe that there is a large misconception on what this actually means. Almost everyone is referring to the fact that Finland has taken a great step forward as it will be wiring the entire country for everyone. To disappoint you, this won't be the case. There is a twist in the text that states the true meaning of the law: it's a legal right to have a 1 Mpbs connection, but it isn't stated that it will be free.
I talked to Sami Kuivasaari, one of the people behind a Finnish spin-off startup Advant Games, a little while back about their company and the way they see the money gaming market. Advant Games is a young spin-off company from a joint research project between the Tampere University of Technology, Tekes (the Finnish Funding Agency for Technology and Innovation) as well as Veikkaus (the money gaming monopoly of Finland). I titled this post explicitly as successfully, because in 2008 just 2 years after their founding Advant Games turned over close to 400k€ with a 20% profit margin.
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.