Ovelin Grabs €1.1 Million From True Ventures
Ovelin, the creators of WildChords, has just announced it has received $1.4 (€1.1) million in seed funding from True Ventures. The Finnish company has already seen a great deal of successes for its innovative method for teaching the guitar, which provides instant feedback and gamified hooks to keep up motivation. WildChords counted 100,000 downloads in the first month of its release, and has racked up a full shelf of awards since leaving StartupSauna. With the funding Ovelin plans on strengthening their team and widening the number of platforms it is available on.
Tallinn, Riga, Vilnius, Helsinki - We Have A Problem
Allan Martinson, one of the most best known and experienced investors from Estonia (currently the founding and managing partner of MTVP), has cast concern about the amount of new accelerators and different support programs for startups. He states a valid point, that if every town and your brother has an accelerator they will fail to attract critical mass to support their functions. Martinson states that Baltics really need one big accelerator with strong financing and a strong team to make a splash in the global pond of startup activities.
There really cannot be too much discussion around this topic, and therefore we have included Allan Martinson's original statement from his public Facebook status below.
PlayMySong Receives $350,000, Launches In NYC
PlayMySong has announced it has received $350,ooo (€271,000) in funding, allowing them to open an office in New York City and continue their reach in bars and venues between both coasts of the United States. In case you haven't seen our previous coverage, PlayMySong is a social jukebox mobile app that lets patrons control the background music you hear when you're out at a bar, diner, or at a similar location where the venue owner has the PlayMySong app running on iOS device connected to the sound system.
Bownty Receives €0.5 M From SEED Capital
You may remember our coverage of the Danish Daily Deals market was provided by Bownty, a daily deals aggregator that has its finger on the pulse of the deals market in several countries across Europe. The Danish company recently announced it has received half a million euros from SEED Capital to expand its growth and its partnering program.
Klarna Receives $155 Million Financing From DST Global and General Atlantic
Klarna, the Sweden-based European e-commerce payments solution announced today that it has received $155 million in financing. This new round came from DST Global and General Atlantic, and was supported by Sequoia Capita, who invested in the company in 2010. Already today, Klarna handles over $2.5 billion worth of transactions annually for its 14.000 connected merchants in in Sweden, Norway, Denmark, Finland, Germany and the Netherlands. The company announced it will use this funding to hire more talent and expand to more regions.
Jenkatehdas Get Initial Funding
The first Finnish online rock venue, Jenkatehdas, gets funded by Tekes and two business angels: Jyrki Kontio and Topi Löppönen. The amount of angel investment was not disclosed, though it is known that Tekes invested 140,000€ project money into the start-up. The money will speed up the company's growth and help it start international expansion. Jenkatehdas host live concerts in their studio which are streamed in real-time on their website. Users need to purchase tickets (priced at about 5€) in order to watch the concerts and interact with each other and the band.
Rahoituskone Maps Finnish Funders
Good things can come out of university projects. Take for example Fredrik Teir, a student at Hanken School of Economics in Helsinki. As part of his school project he, together with a friend, wanted to learn more about funding possibilities for start-ups in Finland. Within two months they identified over 100 potential funders. To organize and make sense of the information they built Rahoituskone.fi, a search engine that helps start-ups find most suitable potential investors. The website covers both state and private funding institutions. With Rahoituskone start-ups can search for funders based on the amount of funding they are looking for, the type of investment and the kind of funding institution they seek the investment from. The engine would also show what investors would require from the start-ups in return. Rahoituskone is completely free to use.
Greylock Partners Starts Tech Fund Worth $160 Million For Europe And Israel
Looks like the technology scene in Europe is getting another backer as the prominent US VC, Greylock Partners announced a $160 Million technology fund. The funds are poised to be used for Internet technology companies in the European region as well as in Israel. The firm has been pretty a notable mention with stakes in leading internet brands like Facebook, LinkedIn and Groupon.
Yandex.Factory To Finance Startups
Russian firm, Yandex is waking up to assist startups with funding with the initiation of Yandex.Factory. Yandex.Factory is a startup investment program that will provide funding to startup projects in Russia as well as those from the International arena and this investment is by no means small.
An Experiment In Pay What You Want Pricing
Two guys named Dan Provost and Tom Gerhardt announced their second project on Kickstarter after their successful Glif-project. Glif, a simple accessory for the iPhone 4 was a huge success on the Kickstarter, a crowdfunding platform, where it raised $137 417 from 5273 backers. Their new project, the Cosmonaut, is a wide-grip stylus pen for touch screen devices.
This project too, has attracted immense interest in a couple of weeks. However, the more interesting part of all this is the experiment the gentlemen did with a pay what you want pricing concept. Backers of The Cosmonaut could choose whatever amount the wanted, but there were only 3000 slots available and they needed to raise $50 000 to go ahead with the project. Dan Provost recently published a blog post explaining what people pledged when they were given the freedom to choose what they wanted to pay for the product.
Rovio Raises $42 Million Round
TechCrunch just released the story that creators of Angry Birds, Rovio, has raised an astonishing $42 million round in funding. The funding has been raised from Accel Partners, Atomico Ventures as well as Felicis Ventures. The round was co-led by Accel Partners as well as Atomico Ventures. Niklas Zennström, the co-founder of Skype will be joining Rovio's board.
Lainaaja.fi - Social Lending Now In Finland
Lainaaja.fi (direct translation: "lender.fi") is slowly building traction in Finland. The service opened end of last year and it has attracted loans worth of tens of thousands of euros. The concept is simple. Anyone can apply for a loan on the site and lenders, regular individuals, can give offers based on the suggested terms the borrower is asking for. Essentially, it's a crowdsourced way to borrow money and for the lenders, it's a way to make money by borrowing with good rates. Most of the rates on the sites are between 15 and 20 percent, so relative to other "investing opportunities" out there, the return is good.
Spotify In Talks With DST About Funding?
TechCrunch has heard from their sources that apparently DST, the Russian originated investment company, is in talks with Spotify to close a large funding round. While all this is still unconfirmed, the round could be valued at $100 million. In total, the company has raised financing of over $80 million to this day. Having followed DST somewhat closely here at ArcticStartup, this would strike more of a natural continuum for DST instead of something out of the blue.
X5 Music Group Sets Its Sails For US As It Secures 7 Million Euro Funding From Northzone Venture
Going nuclear with your business, especially when it is related to a geographic expansion is a justified move especially if you are recognized as a major regional player. A similar story comes from the Stockholm based European Music company; X5 Music Group which is branching itself into the US.
The Swedish music company announced that it secured a 7 Million Euro investment from Northzone Ventures. This isn’t Northzone Venture’s first investment in a music related firm, given that they had earlier made a major investment in Spotify, a prominent Scandinavian music startup. With the current investment by NZ, the venture group has given X5 Music the necessary investments to expand beyond Europe and into the US Markets. And if X5 Music is actually able to make this, it will become the first Swedish record label in over five decades to move into the US region. With that said, X5 will be readying to start work at its New York office in early 2011.
Thinglink Raises 1M USD From Inventure And Lifeline Ventures
Thinglink, a Finnish product tagging startup based in Helsinki/Palo Alto (see our previous coverage), has just announced it has raised USD 1 million in funding from Nordic Inventure and Lifeline Ventures. The funding will be used to develop in-image product advertising network for brands, retailers and other product advertisers. The firm's reference customers include the Scandinavian media house Aller, the Finnish Broadcasting Company YLE (Wenzel’s Antique Road Show), and interior design brand Artek.
The Unsung Hero
In the stories, the hero fights for the people, faces failure and great uncertainty, and ultimately wins.
In Finland, we think he’s a fool who thinks he’s better than everyone else, disrespects the rules and is probably Finnish-Swedish.
Entrepreneurs are the same. They are opportunists and idealists. In its original French, the word means: somebody who will attempt to create something.
On one hand it’s a risky, lonely and difficult endeavor. But on the other hand, it’s thrilling, challenging and potentially offers great returns (value, jobs). I believe we Europeans, and especially in Finland, spend too much time focusing on the former and not enough on the latter.
Videoplaza Secures € 3.5 Million In Funding
We all know the Swedish startup Videoplaza has been on a roll lately with their ad serving technology for managing and monetising online video. Venture capitalist are not disagreeing: Today Videoplaza announced the completion of its €3.5 million (US$5 million) round of investment led by Creandum and Northzone.
Not surprisingly, the capital was raised to support a further commercial development and a roll-out across Europe. More specifically, the funding will enable Videoplaza to accelerate the deployment of its Monetizer ad server platform technology for managing, displaying and tracking advertising in and around publishers’ online video content into more European territories, including Germany, Spain and Italy.
Neo Technology Secures Seed Funding To Lead NoSQL Movement
I probably shouldn't be this ecxited, but I am. Swedish Neo Technology, developer of Neo4j, an open source graph database, has secured $2.5 million in seed funding to boost Neo4j’s presence in the emerging NonSQL movement market space.
I just received a happy call from Emil Eifrem, CEO Neo Technology, at the moment in US to talk about semantic web, NonSQL movement and the next step in Neo Technology's life.
Here’s how to get funding from Tekes
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.
Mobile Payment Solutions Developer Accumulate Lands VC Funding
Accumulate, a Swedish mobile payment and security solution provider, received an investment from The Sixth Swedish National Pension Fund (The Sixth AP Fund; Sjätte AP-fonden). The Sixth AP fund is the so called Swedish state fund for long-term risk capital, investing in small and medium-sized growth companies. http://www.apfond6.se/en/Accumulate, a Swedish mobile payment and security solution provider, has received an investment from The Sixth Swedish National Pension Fund (The Sixth AP Fund; Sjätte AP-fonden). The Sixth AP fund is the so called Swedish state fund for longterm risk capital, investing in small and medium-sized growth companies. The size of the investment has not been disclosed.
Mobile Startup QAim's CEO On Landing Round A Funding
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.)
Tweehouse Scores 350 000 Euro From Tekes
Tweehouse, a 6 months old Finnish MMO gaming startup that was spun from Valve, has received 3500 000 euro from who else than Tekes, Finnish Funding Agency for Technology and Innovation.
Tweehouse got the grant to assist in the ongoing development of TrunkTech, an end-to-end technology platform designed to develope games in co-operation with a U.S. based games publisher. With the grant Tweehouse team will be able to grow its current size of nine developers and designers in Finland and additional marketers and producers in Los Angeles, CA. They just got their first game out, Eco-Rangers. A good start, even though according to the team it's only a mere poke at the market compared to what's in the plans: The Eco-Rangers was mainly a marketing campaign for Taco Bell in the US, whereas TrunkTech will be published as SaaS (’Software as a Service’) later in 2009 and used as the core engine in buiding of many more massively multi-player applications or even in virtual worlds.
The startup has a rather unusual business model. I quote myself here from the previous post on the company:
Tweehouse will target purely US market in the beginning. For this Snap TV is an ideal partner [for Tweehouse] to handle the Sales and PR and leave the game development and pipeline management to the Helsinki office. Snap TV prides itself for having a dedicated sales force that calls on all classes of retail and ships products to over 20,000 storefronts across the United States and Canada, thus enabling quick access to market when the product is ready....
The business model will build on the end-to-end solution. The service covers everything from design, development and marketing all the way to running the platform and moderation of the games themselves. In essence Tweehouse is aiming to build and sell solid gaming platforms to their customers. In addition to a fixed price element, the company also aims to always build an upside to the products they sell. This could mean for example a revenue share model that will be a percentage of each game sold.
As Paavo Perttula of Tweehouse notes, Finnish success in gaming is partly due to the long tradition stemming from the very active demo scene of the 80's. Along with the demo scene, the Finnish goverment has had an active role contributing to the success as well. In 2007, the Finnish technology fund (Tekes) gave in excess of 6M euros in government grants to gaming initiatives, whereas the combined figure for the whole of the EU was 21M euros. This time it was Tweehouse's turn to give the international expansion a try, and based on the progress so far they are on schedule. Congratulations to the team and good luck!
Adobe and Nokia Fund New Cross-Platform Flash Concepts
At GSMA Mobile World Congress last week, Adobe and Nokia announced Open Screen Project fund aimed for helping developers create new applications and services for mobile, desktop and consumer electronics devices using Adobe's Flash Platform. The initial size of the fund is $10 million.
All developers can now submit concepts for new applications. The focus areas are not that limited; you can enter with apps on entertainment, business, social networking, productivity, gaming, travel, multimedia, health, finance, weather, sports, news, education, etc... The requirements are that the applications are based on the Adobe Flash Platform, will run on Nokia devices, and will work on multiple screens, including mobile, desktop and consumer electronics devices. The review criteria focuses on the innovativeness of the concept, appeal of the UI, robustness the application or planned implementation, and how well the application exploits the capabilities and features of Nokia devices, Adobe Flash (including Flash Lite) and Adobe AIR. It is stated in the fund's FAQ that of special interest are connected applications leveraging core Nokia device capabilities such as camera, location/GPS, and user contacts. The concepts will be reviewed by "mobile and desktop application and services experts" at Adobe and Nokia. Accepted concepts will receive 25% of the agreed financing upfront and 75% upon project completion.
Open Screen Project is an industry initiative led by Adobe, aiming to provide consumers richer, more interactive, and more consistent user experience for web content and standalone applications on televisions, set-top boxes, mobile devices and other consumer devices. Adobe has gathered over 20 members aboard so far, including the top 5 mobile phone manufacturers, Intel, Qualcomm, and Verizon. The vision of Open Screen Project is to "Enable consumers to engage with rich Internet experiences seamlessly across any device, anywhere." The key is to establish a consistent runtime environment across different platforms and environments, by reducing the fragmentation of devices, operating systems, and browsers.
So far Flash has a wide reach, considering numerous operating systems and devices, and and existing community of over million developers. Adobe is no doubt trying very hard to make Flash the de facto standard of mobile and the new converging web devices as well. Sun Microsystems is challenging Adobe in the runtime race by the introduction of JavaFX framework, which is boasted to provide simplicity and ease of design similar to Flash, but with much more extensive scripting features. Sun is also targeting e.g. IPTV and set top box manufacturers among others with JavaFX. In terms of installed base Flash has gotten a lot of head, though, with stated close to 40 percent of all new mobile devices shipped with Flash Lite in 2008. Adobe also just released Flash Lite Distributable player for over-the-air distribution of Flash Lite applications.
Conformiq Closes 3 Million Euro in Funding, Goes After Global Markets
Despite the economical climate and the horde of naysayers, a Finnish based software company, Comformiq secures 3 million euros in investment round lead by Nexit Ventures Oy. Funding mainly comes from Suomen Teollisuussijoitus Oy(‘Finland’s industry investment Ltd’) and unclosed group of US angel investors.
According to their press release, with this new funding, Comformiq plans to transfer its business executives to US, but retain the product development in Espoo, Finland. Apparently they are also getting a new CEO, A .K. Kalekos, and former CEO, Antti Huima, will step down to CTO.
Conformiq focuses in model-based testing tools, with their main product Conformiq Qtronic. The real innovation with this product is that usually you would need to write tests, but Conformiq Qtronic generates and executes tests itself based on the design model. A recent study(pdf warning) suggested that Test-Driven Development(TDD) takes 15-35% longer but leads to 40-90% fewer bugs. Conformiq says that they can decrease development time by speeding up the test design by 20-fold.
It’s great to see yet another funded software company that breaks free from the arctic blizzard. As myself, I see the software industry as a something what we arctic dwellers could really excel in global scale. Hopefully more great people and funding find this sector.
Social Music Marketplace gogoyoko Raises ISK 100 Million
Despite of the downturn and bad overall economical situation in Iceland, the new social music service gogoyoko (see our previous intro) has secured 100 million Iceland Kronur (slightly more modest in euros: EUR 0,69M; USD 0,89M) in funding from Icelandic The New Venture Business Fund (90 %) and private investor Vilhjalmur Thorsteinsson (10 %).
The purpose of the funding was not disclosed, but in the company's newsletter it is stated that the firm has been growing steadily and just moved to a bigger office. gogoyoko is still looking for more people and prepares for increasing international marketing activities this year. gogoyoko has gotten advice and steering for the fundraising and product development process from Norwegian "New Media Innovation House” Ignitas that also has taken an equity stake in gogoyoko. Ignitas has been previously involved in selling Norway's #2 social network Biip.no to media enterprise Egmont/Nettavisen.
gogoyoko provides artists and other music right holders a social marketplace allowing them to sell music directly to consumers worldwide without middlemen. The service is currently running in closed beta, planned to be publicly opened in April. gogoyoko's service is promised to include interesting features like a custom music player embedable to any site through which the users can stream (ad-funded) tracks and albums for free. The player is also supposed to include a music store interface. On gogoyoko's portal, artists can create their personal sites, write news, blog entries, upload discography, pictures, videos, and enter gig information to gogoyoko's global map.
The firm's updated intro video:
XIHA Raises Chinese VC Funding
XIHA is a Finnish startup developing XIHA Life, a multilingual social media platform and an online community targeted at people living outside their home country, and the multilingual people around the world. XIHA invites users of any language, but adjusts the user experience to each user so that they only see automatically the content they understand. Despite the current economic climate, XIHA has raised a significant amount of risk capital from a Chinese VC.
Jani comments it's hard to find risk capital in Finland to support global growth. According to Jani the Finnish VC's thought the risk was too big. Out of the international VC's Jani thought Chinese were the best, as they have both money and vision.
The amount of investment was not disclosed. However, the amount is rather significant, as the founder and CTO Jani Penttinen says with it the company will open offices in the US, Switzerland, and China, and will hire ten more people, developers and business roles, to achieve 24h global operations. Another ten will be hired later depending on the economical climate. There is also more money coming if certain growth targets will be hit. XIHA has strong Chinese roots due to Jani working in the country, and Jani's spouse Sun Xiaowen being Chinese. "Xiha" means 'fun' or 'happy' in Mandarin Chinese, and also 'Hip-Hop' in Cantonese.
As of now, XIHA is still losing money, but the goal is to get to profitability by the end of the year. So far the main income source has been downloadable games, but XIHA is planning to expand to other digital products as well. Below is a quick interview with Jani Penttinen from Slush Helsinki.
Jalbum raises $3.2M in Series B funding
Jalbum Ab, Sweden based community for online photosharing, announced yesterday that they have closed a second round of investment with Nordic Venture Partners. This new deal brings the total raised capital up to 23 million SEK (approx $3.2M). In addition, the company’s board of directors named serial entrepreneur Andreas Sjölund as the new Chief Executive Officer of the company.
Sjölund is formerly known as co-creator of Skype and one of the first employees of KaZaA. Founder and former CEO David Ekholm will stay with the company and continue as a CTO.
Jalbum offers a mix of photo album software and social photo sharing. What separates Jalbum from other services like Flickr is that they have executable cross-platform client. Client enables the user to do basic photo editing, organizing and uploading photos. With the tool you can also design own or use some user created pre-existing skins for your album. Another appealing aspect is that you can publish your album where ever you like, not only on Jalbum.net.
Even though the downloadable clients have been regarded as somewhat painful practice, apparently it has worked for Jalbum. The client is now downloaded over two thousand times a day and over 24 million albums have been published with the software.
Funding and Training for Finnish and European Companies
Tekes, the Finnish Funding Agency for Technology and Innovation, offers Finnish companies possibility to take part in the UCLA Global Access Program once again this year. In the program MBA students of UCLA will make an international business plan for the companies as their final thesis, focusing on analysis and action plan for entering specific international markets. The program was ranked last year as the best of its kind in the US, and the bar for both participating companies and students is high. There have been yearly around 10 Finnish companies participating in GAP, including e.g. one of the fastest grown firms Openbit and Cidercone.
Eurostars is an European funding and support program specifically dedicated to creating competitive SMEs that will be leaders in their own sector. The program tries to ignite international collaborative research and innovation projects by easing access to support and funding for growth companies. The program is initiated by EUREKA, pan-European intergovernmental network founded to enhance competitiveness of European businesses. Eurostars offers 400 million euros of R&D funding to SME companies over a six year period. Tekes funds the Finnish participants with 5M euros per year. The next deadline for electronic submission of applications is November 21st 2008. See instructions from Tekes.
Gaming and interactive media companies can also apply for funding of 10,000-100,000 euros for producing product demos and prototypes in the Media 2007 program. The program is aimed at companies developing on and off-line interactive works. Eligible are interactive works for the computer, internet, mobile phone, games console (including handheld), and digital television, that present a substantial degree interactivity, narrative, and innovation. Companies that submit an application must have completed a previous interactive work, or an animation of at least 24 minutes, and prove that the work has been commercially distributed between January 1st 2006 and the date of submission of their application. The next deadline for applying is November 17th.
Funding to get more difficult?
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 :)
Best of April Fool's
There were some very good April Fool's jokes to be found all around the internet yesterday.
Here's a few ones we found.
- Virgle - Virgin and Google, a 100 year plan to take over Mars.
- Google Docs - Build your own airplane.
- Arctic Startup - to be honest, not really funded just yet. It was simply too tempting not to post it after I got the idea. However, it wasn't all that outrageous as Vierityspalkki fell for it as well as som commenters(sorry!). Is there a blog in Finland that has received proper funding yet?
- Google's Future Search - search the web of tomorrow.
Which ones did you find?
