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.
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Sauma Technologies, the developer and publisher of browser-based Massively Multiplayer Online Games (MMOG), secures EUR 500,000 (USD 685,000) funding from Finnish state agencies Tekes and Finnvera, as well as the Nordic Game Program.
Sauma CEO Andreas von Koskull says “We are very proud of having secured seed funding for our game platform and our first self-published game “Hours of War”, a war simulation strategy MMO game, despite the global finance crisis [...]”
Securing funding is not a minor task in anysituation, but it’s good to remember that the liquidity crisis hardly affects Tekes or Finnvera, which are both government run institutions with annual budgets that do not follow the market sentiments. If anything they would’ve probably been designed to act as counter cyclical stabilizers if the sructure would’ve allowed it. When you find a private investor for yourself it is relatively easy to get VeraVenture funding, which is operating under Finnvera. And once you get that deal sealed, you’re good to go talk to Tekes who will normally double your money with their support. And it seems that Nordic Ministers for Culture, representing Denmark, Finland, Iceland, Norway and Sweden, are financially behind the Nordic Game Platform.
Having said that, securing funding is always a major feat for a startup and we want to congratulate the great people at Sauma for pulling this off. The game that the funding was granted for, Hours of War, MMO, a social network and a rich-media gaming experience, played through the Web browser, will be introduced in early Q1. During 2009 the Sauma team plans to expand the mass-niche war strategy franchise “Hours of War” to other platforms, as well as to develop other game franchises with a focus on a more casual audience.
The business models for the games vary but include free-to-play, monthly subscription, pay per play, micro-transactions as well as advertising revenue models, depending on the game and game audience. The browser-based MMO game industry is growing rapidly, combining a rich gaming experience with social networks. According to Sauma the massively multiplayer online games market in large is currently standing at EUR 1.6 billion.
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.
Biovakka Suomi Oy 
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