Northzone Ventures announced the first close of € 90 million of a new fund, Northzone VI. Targeting € 150 million, the fund will invest in fast growing Euro tech companies. Prominent Nordic and International institutional investors participated in the first close.
This was not only significant because we certainly don’t have too much venture capital in the Nordics, but also because this will mean that some of the better venture capital firms are bullish enough to look outside for new investments instead of just trying help navigate their current portfolio companies through the rough economy. I’m happy that the Finnish Industry Investment, whose Advisory Council I sit at, invested a total of € 7.5m in the new fund (consider this as my disclosure). This shows that the institutional players believe in the asset class despite the lack of an IPO market. I agree that I might read this news as a bigger positive sign than most, given how bad the European let alone Nordic venture capital situation is, but what it highlights is that the best startups will always find the money when they need it regardless of geography or economy. For the real pirates now is always the right time to start a company.
Norwegian Investinor is already into the cleantech industry through investments in electric car-maker Think and Metallkraft (which is another cleantech fast-grower doing recycling in the solar industry). They opened their bank account before the holidays, investing 6.3 million euro in Innotech Solar, making it one of the bigger cleantech investments during the year. Innotech Solar was founded by people from within the solar industry, who saw a market opportunity in the solar cells that where not used due to low efficiency. Innotech Solar buys these cells and has the technology and production capacity to upgrade them, making them profitable. It is recycling and reuse in an industry where access to raw material has been crucial. The company was established in spring 2008, has grown to 42 employees, and already has sales offices in Germany and China. The company has previously managed to attract VC money from two of the most active cleantech investors in the Nordics – Northzone Ventures and Sustainable Technologies Fund.
This is one of those issues that is always topical and never gets a clear answer. Why do we comparatively suck so bad at building companies in Europe and especially here in the arctic latitudes vis-a-vis our cousins in the US. In the age of the Internet and ‘born global’ it has to be more than the size of the home market. Now, I’m not saying things have to be that way, nor am I saying that things are not changing. They are and we, but to what extent and what is it exactly that we need to change?
Here’s a video of a group of prominent European and US entrepreneurs arguing around the topic. The one just below is from this year’s LeWeb and the one below that from 2008 (when we took the Sauna Truck to France with a group of Finnish startups). Both videos are insightful, but even more than that they are entertaining. Make sure not to miss these.
The third video is Mårten Mickos‘ brilliant talk about entrepreneurship in general and entrepreneurship in Finland in particular from last night at Aalto Entrepreneurs Society gathering. The talk is a must see for every single entrepreneur regardless of the continent they are building their startup in, but it also sheds light into the cultural challenges that are in the way of building world’s biggest anything. Continue reading »
I had a chat in LeWeb with Joi Ito of Neoteny. He is also the CEO of Creative Commons and on board of numerous companies and non profits. Joi, like other investors in LeWeb, are still investing despite the downturn but like he said – it’s easier to make out the better companies from the noise in times of economic crisis. He also has some tips for Nordic and Baltic companies, so do have a look.
i2m – Ideas to market, a UK based research firm, has released some very interesting figures in terms of startup financing, according to Sun Startup Essential Blogs. They have researched some 800 entrepreneurs and small business owners over a variety of areas.
The key findings of the financial research has shown that about 40% of startups seek under 10,000 GBP to become profitable while 30% seek between 10,000 and 100,000 GBP to become profitable. Only about 15% of startups seek more than 100,000 GBP to become profitable.
In the findings, Permjot Valia, a business angel and member of the British Business Angel Association describes that the engine of Britain’s entrepreneurial industry is friends and family. If you take this thinking to the Nordics, I’d say the results would be tilted towards the 100k€ mark.
This of course raises questions of other sorts – are we really able to bootstrap up here? Do we take the financial status for granted and regard that something as of a given right even in a startup? Provocative questions to ask, but what are your thoughts – which category would you reckon would be the largest in your home country?
The recent weeks’ downturn in the global economy has dramatically tightened the availability of funding for companies, not only startups but large companies alike. The downturn that started from the US with the uncovering off the sub-prime “fraud” has echoed its effects to all corners of the world as connections between financing houses begin to unravel.
Sequioa Capital, one of the most famous startup financing houses in the US, has held a secret meeting earlier this week. A slideshow from the meeting has fled to the public unraveling the contents of the meeting – short and long term scenarios for the world economy. The contents of the document are not very positive. If the name of the presentation is “RIP – Good times”, I think it says all.
I’ve also heard while discussing with Nordic entrepreneurs that the financing market has, also in Europe, tightened dramatically. This of course means that those seeking funding rounds form the public will face tougher times in years.
I’m expecting we’ll see a huge rise in applications to the government institutions that support and finance entrepreneurs as the private markets tighten. It is natural for entrepreneurs to seek financing at all costs, as it is their only way to survive if they do not have a positive cashflow. This however, in my opinion and even at the cost of receiving a ton of hate mail, does not give the institutions any right to loosen their funding – just to support the companies and keep people employed.
This may seem harsh, but the Nordic startup scene is still very small in terms of employment and thus does not pose a great threat to the GDP. Times like these serve as natural ways to bring about healthy change to the markets with companies that are truly innovative and have a chance of becoming profitable in the near future (ie. are already showing healthy amounts of revenue).
One must also remember that even in difficult times, it is usually the strongest that survive – creating more value in the long run to the individuals as well as economies they serve.
Timo Paloheimo has listed a good bunch of Finnish web startups in The Next Web using various sources, including his own blog Startupbin and ArcticStartup. He’s also categorized them quite extensively under different subgroups, including e.g. social networking, e-commerce, business tools, and mobile. The list is likely nowhere complete, though, and there have been some additions already in the comments section in Startupbin.
We at ArcticStartup recognize there isn’t any good way of easily getting comprehensive information about the startups in Finland, or in other Nordic and Baltic countries for that matter, at the moment. That’s why we have been working on Nordic and Baltic wide ‘CrunchBase’, which should come out very soon. Our hope is that a common startup directory will benefit everybody in the industry. Stay tuned, we’ll reveal more soon!
Northzone Ventures announced the first close of € 90 million of a new fund, Northzone VI. Targeting € 150 million, the fund will invest in fast growing Euro tech companies. Prominent Nordic and International institutional investors participated in the first close.
This is one of those issues that is always topical and never gets a clear answer. Why do we comparatively suck so bad at building companies in Europe and especially here in the arctic latitudes vis-a-vis our cousins in the US. In the age of the Internet and ‘born global’ it has to be more than the size of the home market. Now, I’m not saying things have to be that way, nor am I saying that things are not changing. They are and we, but to what extent and what is it exactly that we need to change?
i2m – Ideas to market, a UK based research firm, has released some very interesting figures in terms of startup financing, according to 
The recent weeks’ downturn in the global economy has dramatically tightened the availability of funding for companies, not only startups but large companies alike. The downturn that started from the US with the uncovering off the sub-prime “fraud” has echoed its effects to all corners of the world as connections between financing houses begin to unravel.
Arch Red Oy
Lumi Group Oy
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