Editor's Note: The last paragraph has been changed to reflect that the €994 million is not in fact the value of exits. It is the total number of investments that have exited, the exit value is likely to be higher.
The Finnish Business Angel Network (FiBAN) and Finland’s Venture Capital Association (FVCA) released their collected statistical data on investments made into early stage growth companies in 2013 by private investors and VC companies.
Fonecta, the Finnish directories business that was founded in 2002, is known to be the largest acquierer in Finland. With a turnover of around 190 million euro, they understood that the directories business is not exactly a growing industry so M&A became a core strategy in keeping up with market developments. So as a result, in the past ten years, they have purchased over 70 companies from various industries.
The Imprimatur Capital Technology Venture Fund located in Latvia has recently announced an investment in headphones software start-up Sonarworks. The investment of €600,000 in the startup makes it their fifth such outing since launching in mid 2010. So what makes headphone software worth of investing in?
Sonarworks have developed digital sound correction software which they say allows speakers to sound much more like how the artists intend by listening to the output and adjusting the sound to get the best quality possible out of their devices. It's cool technology that can get a lot more out of your cheap speakers.
Editor's note: The trip to Prague was paid for by Wayra CEE, but the information and thoughts herein are my own.
Seeing how the startup culture works in other countries is always interesting, we often compare the ArcticStartup region to USA or the UK but what about our neighbours? We write about Estonia, Latvia and Lithuania, who are a part of the CEE, but we rarely have the opportunity to take a look at the whole region.
When we were doing our Baltic investment overview last year, it was actually quite difficult to find investments into Latvian startups. Recently, however things have been picking up speed with investments into Froont, Fastr & Ask.fm.
One thing that many startup founders do not think about are the legal costs of closing a seed round. Why is this significant? Because it can end-up being a much higher proportion of the deal than you can imagine. For instance we wrote earlier about Dexplora, a company where the legal costs of the round were higher than the total cost of producing the app and the system. Not surprisingly then, the co-founder of Dexplora (now Brisk.io), Hampus Jakobsson is one of the investors in DealCircle, a company that is aiming to solve this very problem.
One of the key issues with equity crowdfunding is the unpredictability of an exit. Sure, you can probably ten fold your money once in a while, but how long will that take? Five, ten years? Now if you are investing the Invesdor minimum of EUR 20, then you will get EUR 200 back with a ten fold exit. Is it worth to wait the ten years to get your 180 EUR? For a lot of people - probably not.
Mojn is a Copenhagen based startup that is focusing on sending out e-commerce and business e-mails that are highly personalized. So it is kinda like Mailchimp, but focuses on a more specific sector as well as on a higher degree of personalization.
If you have been keeping up to date, then you might be guessing that this upcoming year is going to be big for the region. Look at it this way, a while back investments were a little scarce and we were happy when we got to write about them, at the moment it looks like there is one almost every day and there were three in a row just yesterday.
The investor activity is also suggestive of good times ahead. At the close of last year, Creandum, Atomico, Vision+ & Northzone all closed new funds. Gorilla Acceleration Fund was also launched just a few weeks back and today Vendep Startup Fund is announcing a EUR 5 Million fund to be invested into 15 to 20 Finnish startups over the course of four years.
Editor's note: this is a sponsored post by UK Trade and Investment
Whenever somebody asks me why Nordic/Baltic startups are performing so well, one of the main arguments tends to be the fact that they simply have no other choice. Coming from relatively small home markets, they simply have got to think global from day one. If you are in Finland for instance, you can probably conquer your home niche market in a matter of months if not weeks. This, forces companies to think about expansion early on and hence global success too.
Helsinki-based Sayduck announces it has raised a €350,000 seed investment from IncubAsia Ventures, Arteel Ventures, as well as angel investors from the Nordic countries, the US, and Slovenia. The company has been growing steadily since we first covered them, by getting into European accelerator Seedcamp, as well as growing from a team from three to a team of 15 involved people from around the globe.
Looking at 2013, it is probably fair to say that the two hottest areas in Northern Europe at the moment are Gaming and Health. Perhaps the two are almost opposites of the spectrum and as much as I love gaming, I can't help to think how important are startups that can measure success in lives saved as opposed to money made. Unfortunately they do not get as much hype as many other companies and often escape the radar.
For example there is Mendor, a company focusing on one very specific target market - people with Diabetes. When it comes to diabetes, it is extremely important to know your glucose levels (blood sugar) and track daily changes in order to manage the disease. Missing measurements can mean not doing the insulin injection at the right time which can have severe consequences on one's life. To tackle the problem, most people use blood glucose meters.
Seinäjoki based startup Jakamo has successfully closed a recent investment round today, with €700 000 in raised funds. Major contributions came from Prohoc, a privately owned Finnish multi-disciplinary company who provides project and business related engineering, consultation and documentation services. The raised funds will be used to strengthen and expand Jakamo's sales and marketing departments, as well as product upgrading.
The Finnish gaming success is not just about the casual games from the likes of Rovio and Supercell. There are other gaming companies that deserve the attention, especially if they also have an added benefit of being education.
For instance there is Beiz, who have created the Lola Panda brand and several games to go with it. The company focuses on pre-kindergarden and elementary school kids, creating games that would aim at providing entertainment and education in one go. The most popular of those is Lola’s Math Train, where you try to drive a train to a party and solve math problems along the way.
Finland’s Visedo Oy have raised €4 million in new investment from Finnish Industry Investment and the company’s existing owners Power Fund II and Sinituote to accelerate their growth into international markets.
As reported by E24 news, the Estonian government plans to create a fund of funds with a total size of EUR 80 million with an aim to invest into startups. The government is set to choose fund managers for the endeavor, and invest EUR 60 million, while the other part should come from private investors.
The total amount will depend on the amount of private investment that this initiative can gather. The fund of funds will be created using the Kredex financial institution, and according to Andrus Treieri, the director of Kredex, the size of the individual funds will depend on the contribution of private investors.
Swedish outfit DoReMIR seem to like keeping the description of what they do quite vague by saying they develop “music intelligence technology”, now intelligent technology immediately gets me thinking of Skynet but intelligent music? I imagine that’s going to lead to ‘The Sound of Music’ suddenly turning and launching an attack on our hearing. Then there’s the boast that they “enables users to more easily than ever before capture and digitize their musical creativity”, now that just sounds like they enable recording onto a digital 8-track or similar, how would you make that easier?
Well it turns out what they actually do is pretty cool, and interesting enough that they’ve just raised $1 million to do more of it.
Helsinki based startup, Smarp, is on the rise. With major client companies in Finland and the UK, Smarp's social business tools and services, and especially their SmarpShare - Service, have been in high demand.
It's a sweet idea actually. According to their researches, more than half of employees feel like they could publish company related content into their personal social media, such as LinkendIn, if only they were encouraged to do so from the highs of the chain-of-command. That's where Smarp steps in, in the form of a game of some sort.
Last week came the announcement that Innovation Norway had appointed Alliance Venture Spring in Oslo and ProVenture Management in Trondheim to manage two new national seed funds. Each of the funds will be about 500 million Norwegian Krone, which works out at a little over €60M each, with a 50-50 split between private investors and the government.
While the ProVenture Management fund is targeted at the oil & gas industry Alliance Venture Spring has been tasked to manage the money that will foster new IT successes. Although the fund is based in Oslo it will have a nationwide reach. In other words small businesses located in other parts of the country will be able to benefit from the investment fund as well as those based in the capital.
It is fair to say that Wi-Fi has changed the world. In fact we have become so spoiled by it that people are now getting stressed out if they do not have Wi-Fi on airplanes.
Oh and when it fails, it gets even worse. That dropped Skype call or a bad network connection at an event can make us really anxious. Now imagine if that Skype call was actually important, life or death kind of important. This is what happens everyday in Hospitals, where they increasingly rely on technology. You would be surprised to find out that nowadays even some IV pumps are “online”. Nurses and doctors use tablets to communicate with each other and their patients. Some hospitals have emergency buttons operating through Wi-Fi and in others nurses have voice-over-ip devices connected to it. So in that kind of environment - you can not afford any networking errors. In fact, it becomes mission, and life, critical.
We've covered Tartu-based Weekdone winning the annual Estonian design awards, but apparently the company isn't just all looks; they just beat out the 400 other hopefuls in the region to win Slush's massive startup pitching competition.
For those of you who haven't seen our past coverage, or didn't see them up on stage at Slush, Weekdone provides a productivity and task completion solution for the web and iOS that gives managers the ability to see an overview of what they're teams are working on, and how they're competing their tasks. It's gorgeous and powerful, especially if you're using the PPP reporting paradigm, focusing on Progress, Plans, and Problems.
Tech giant Google has made a €450 million investment into their datacenter in eastern coastal city of Hamina, Finland.
The company has announced the current datacenter is to triple in size. This means it will provide work for over 800 Finnish engineers and construction workers, as well as being a motor to reinvigorate the sleepy industrial region surrounding it.
Since around 2007 there has been a huge outburst of accelerators around the world, especially so in Europe. Yet, since the whole concept is fairly new, there are a lot of questions surrounding the practice. Are accelerators successful? Will it be easier to raise money after an accelerator? How much value can an accelerator program add to your company?
These and many other questions, are difficult to answer. Especially so, when there is very little data available on them. Sure there is some public data, that accelerators must submit, but it is very hard to get a hold of real hard-core statistics. Unless of course an accelerator comes up to you and passes on all of their “books” to you. This is what Accelerace from Denmark basically did and there is a lot to learn from what was inside.
The bleed of talent from Nokia continues to be a sad testament of a company that has fallen on hard times recently, but Nokia’s loss has been the startup scene’s gain. We continue to see exciting new companies pop up as they reveal the interesting things they have been working on. In this case it’s a company spun-off from Nokia and founded just around a year ago (give or take a few weeks) in November 2012. Based in Finland and with only 13 employees they might sound small but they believe their product could end up having a big impact in its intended market.
So what exactly do they do? That is a tough one, unless you understand the intricacies of MySQL, relationship databases and forks. Not the ones you eat with, but the software development kind. Basically MariaDB is an independent copy of MySQL (fork) that was started by ex-MySQL execs over concerns that Oracle, who acquired MySQL, might take unexpected directions with the development.
MariaDB was started by Monty Program AB from Sweden but they later merged with SkySQL in April 2013, and by doing so - reunited the key members of the original MySQL AB team.
We have spoken about this issue before, but many modern start-ups are "solving a problem" that does not really need to be solved, so when we see entrepreneurs that try to tackle a real-life problem we tend to take notice.
Take NurseBuddy, a company trying to make the lives of nurses, old people and their relatives - easier. They might not have the most scalable business in the world, but they are making a change and they way the are doing it is a lesson to all other startups out there.
The CEO, Simo Hännikkälä is known for spending a lot of time on the road with Nurses, when they are visiting their patients. That way the company stays close to their users and knows exactly what they want and need.
It's going to be interesting to see how Autobutler grows after picking up $5 million from Creandum to fuel international expansion. The Copenhagen-based company allows car owners to receive competing offers from mechanics rather than getting in a heated discussion with your mechanic that the guy down the street will fix your transmission for €300 less. You could argue that this takes the sport out of getting your car fixed, but by making mechanics compete on prices, consumers should win.
￼“Our goal is the same today as when we started: To be the best tool for car owners ￼to easily find high quality mechanic for the lowest price. Part of this vision is to build ￼the best software for car mechanics to service their customers” says Christian Legêne, co-Founder and Partner at Autobutler￼.
When startups or VC's recruit a new team member, it is normally not newsworthy per say. However when the news has profound implications for the region, such as the time when Max Niederhofer joined Sunstone Capital, this is definitely something to write about.
We were just told that a similar move was made by Chris Barchak, who will be joining the Finland based based Conor VC as a Partner. Barchak was previously a Principal at Fidelity Growth Partners Europe in London and an associate at Index Ventures. Both of them have very respectable portfolios. FGPE has investments in Alibaba, and the Swedish Neo Technology while Index Ventures invested in Facebook, Skype, MySQL and more recently they led €100 million round into Supercell.
There aren't too many Swedish startups you can say this about, but Bambuser changed and was changed by the Arab Spring. At launch, the mobile-to-live-video concept was pitched as a way to share your kid's soccer game with the grandparents in real time, but as more and more activists and citizen journalists started using Bambuser to record the world around them, the Stockholm-based company became a crowdsourced media platform for newsworthy events.
Late last week the AP announces it has bought a stake in Bambuser, the Stockholm-based mobile streaming video service. The numbers involved with the deal were not announced, but AP’s director of global video news, Sandy MacIntyre, will join Bambuser’s board as a non-executive director.
Oslo's mobile authentication firm Encap has announced a major new investment from the ProVenture seed fund. The exact amount hasn't been disclosed, but rumours circling the web put the figure around the $2 million mark.
It's the second major investment in Encap from a Norwegian backer, adding to earlier money from Alliance Ventures. Norwegian startups tend to look abroad for funding rather than rely on the small domestic VC scene, so today's news is a welcome change.