We all know that Finland is well known for extensive governmental support for start-ups and it is only fair considering the corporate and private income taxes in the country. It provides the necessary boost and additional investment incentives for angels and other private investors.
In 2011, Tekes Tempo launched with an idea to provide 50% non-dilutive funding to companies that would be building market-oriented services. In total the program funded 61 startups such as Kiosked, LivLiv and HeiaHeia. The total amount provided came to EUR 3.7 Million.
To consumers HeiaHeia seems like a consumer product - you see friends sharing their runs and workouts through the service, and the product feels like a social B2C product. But as we wrote last summer, HeiaHeia's business model is targeted towards companies and organizations that wish to proactively lower their healthcare and insurance costs by encouraging more active lifestyles.
For companies like HeiaHeia that have some sort of B2C angle but are doing B2B sales, Raisanen says is important to understand that is that a lot of the things that work on the B2C side doesn't apply to B2B. It's a tricky situation to be in. The service they provide is very dependent on the individual getting excited about it, but at the same time it's a B2B purchasing decision.
For our readers outside of Finland this may not be too interesting, but changes at Tekes (The Finnish Funding Agency for Technology and Innovation) can have a noticeable impact on the financing of Finnish startups. The big news is that Tekes is trimming its organization to become more agile, and right before the Christmas holidays the Tekes board came to a conclusion regarding focus areas for its board of directors.
"Tekes' new organisation has been outlined and guided by our principals of customer orientation, clear responsibilities and the organisation's ability to respond rapidly, efficiently and flexibly," states Pekka Soini, the Director General of Tekes in its blog post.
If you attended Slush this year, then you definitely have one of the Badger stickers, pictured on the left. After all, the team behind Badger gave out nearly 2 000 stickers at the event, I have one on my freezer and even my desk.
We got together with Joonas Tunturi, the CEO of Social Ark Oy which is the company that created Nextdays and Badger to discuss recruitment in start-ups. They opened shop over a year ago and thanks to getting a Tekes Tempo funding were able to quickly expand the workforce, pivot and create a pretty interesting service.
Kiosked is on a mission to turn any sort of visual or social elements into branded webshops, and with it they're on a mission to connect brands directly to consumers through any sort of media. Their service allows anyone to "kiosk" images and videos with products (or whatever content they like) by putting a flash or HTML5 wrapper around the image. When a user hovers over the content, they can find out more information about the product, or buy it right there in the image or video.
Rather than a single solution, the company sees themselves as a platform on which others can build. Their new mobile app created with help from Tekes Tempo is one example of the products that can be built off of their soon-too-be released API toolkit. The app features campaigns from brands, who are crowdsouring the best photos and images of their product in action. The Kiosked app allows users to take and upload digital content, which can be automatically or manually Kiosked into these campaigns.
Face-to-face meetings are a necessary part of the decision making process, but meetings have picked up their negative reputation for a good reason. When no one has time to prepare for a meeting, meeting-goers may not be aware of who they are in the same room with, and have trouble sticking to the meeting agenda. When the meeting is over, many times you don't really know if everyone is on the same page. On top of that, technology in the meeting room may have hurt meeting efficiency more than it has helped it; it's far too easy for colleagues to hide behind their laptop and not use the screen in front of them in productive ways.
But iPads are starting to become the weapon of choice for many corporate warriors, and Helsinki-based Punos Mobile Ltd has come up with solutions to many of these problems by developing an iPad app called Meeting Assistant. Based on their beta testing, some of the most sought-after features allow the users to keep their meetings on time, track to-dos and send notes to everyone right after.
Helsinki-based Kapu Toys has released their first title, Kapu Forest on iOS. Kapu Forest is aimed at younger folks aged 1-4+, and they're staying true to their name in the sense that they're trying to be a digital toy box, rather than a collection of games.
The company itself is the brainchild of five international creatives from the wold of digital design, development, and planning. The idea for Kapu Toys arose in 2011 when the founders noticed that their own children had discovered the use of touch-screen devices, and were mimicking their actions. After more research and discovery, they noticed that many smartphone apps didn’t succeed in providing suitable content for kids.
BeiZ game studio has secured $1 million (€800 000) from Inventure and Tekes to boost the quality and marketing of their games. The Tampere, Finland based company has produced a number of educational and multilingual titles for iOS, Android, and Kindle, with one release also available on Nintendo DSi and 3DS. In addition to creating their own games, BeiZ also works on bringing partner companies' games onto new platforms.
BeiZ’s two flagship games are Lola’s Math Train and Alphabet Train. Lola’s Alphabet Train was launched in 2010 teaches letters and words to its target of three- to eight-year-olds.
A somewhat new initiative coming out of Tekes is Tekes Tempo, a program designed to put "feedback into practice" as we called it. In their own worlds, they're a market-oriented mobile services project designed to encourage growth-seeking companies to quickly reach the top of their field.
In 2011, 16 projects were funded with the average amount of funding for each project was just over EUR 43,000. Tempo is designed to cut through the bureaucracy so companies can quickly test out ideas on the market; so far the average processing time has been 33 days.
One company funded through Tekes Tempo this year has been Tellyo, a Startup Sauna Fall 2011 participant that is turning your phone into a personal remote controller that works with existing TVs. We were lucky to have Tekes suggest Tellyo for interview, the company is doing some really interesting stuff at the moment.
Clearly not every start-up makes it, and in this sponsored series for Tekes we thought it would be good to also look at a "failure story" of a company that was previously on Tekes financing. We got the chance to speak with Kai Lemmetty, previously from Floobs, about his experiences with Tekes funding.
Floobs was a live video streaming service for sports clubs and bands, allowing users to record and stream video from mobile phones and supported video cameras. The company was started in 2007 before mobile live-streaming was even on the radar, and could be somewhat compared to what Bambuser is today.
You may have caught our past stories on Ovelin, the makes of Wildchords. The hot Finnish startup grabbed €1.1 million in financing from True Ventures last February, and their guitar teaching app has gotten critical acclaim the world over.
Currently Ovelin is hiring senior game developers, coders, game designers, and is growing the company further. At the moment the company is generally looking at new platforms and new instruments, and will be releasing some new packages soon that contain well known songs, but only from the public domain. Mikko Kaipainen, co-founder of Ovelin, wasn't willing to share anything else about licensing or future plans. But last week the company threw a party in Helsinki with the IGDA to promote their game and celebrate their successful €1.1 million funding round.
Cognitive Maps Ltd. has released its first whitelabeled "corporate" version of the Hitlantis interface. The integration was made for Tekes to help visualize the projects the government agency is operating in.
The current Tekes project visualization was aided somewhat hand-on by the Cognitive Maps folks, but when the company releases their SaaS infrastructure later this year, they say the client will have a light and easy admin tool to control the inputs and outputs of the visualization. On top of that, they also have documented and fully functioning API's that can visualize many types of categorized data.
Tekes offers a wide variety of financing vehicles fitted to meet the needs of different types of companies in different points of their life cycles. Even going outside the startup sphere, Tekes supports organizations like heavy industry as well as academic and research initiatives.
But for most of our readers, there are a few plans designed to meet the needs of growing companies. Here are some details that are good to know about before going into your first meeting with Tekes. For most of you out there, the main funding vehicles offered are R&D funding, Young innovative growth enterprises, and work organization development.
Editorial note: This is a guest post by Richard von Kaufmann, co-founder of Zipipop and Chairman at Reality Creating Media. He has studied in great detail the different crowdfunding opportunities for some of their clients and we thought that it would be a great chance to understand the industry by sharing his findings with our community.
Government-based innovation funding agencies around the world have a great challenge to continually identify the innovative concepts and teams with the best chances of success. In recent times there has been growing criticism of the effectiveness of some Finnish funding mechanisms, but similar issues affect public funding agencies around the world.
It is now generally accepted that diversity in team compositions leads to better decision making, and there is growing evidence that, given the right conditions, other means of increasing the range of opinions also produces better results.
This then begs the question as to the validity of relying on just two or three staff, or at best a small committee, to make decisions on the funding applications that are submitted to national innovation funding agencies.
This article makes the case for opening up the decision-making to involve larger communities, using known crowdsourcing principles and social technologies, to improve the quality of funding decisions. It also introduces the potential benefits that could come from developing a government-backed crowdfunding platform that would make it easier for private individuals to invest in early-stage startups.
Nest New York is a new kind of a startup accelerator (can we really call it that?) in New York that helps Finnish companies establish themselves into the US market, according to Finnish Talouselämä. The setup is a combined effort by Tekes (Finnish Funding Agency for Technology and Innovation) as well as Teknologiateollisuus (The Federation of Finnish Technology Industries).
The companies currently accepted into the accelerator are PlayMySong, Campalyst, Stream Republic, Wantlet, MobileBrainBank and Kiosked.
Editor's Note: This series of posts is sponsored by Tekes and produced in co-operation with ArcticStartup to share experiences from startups about their funding experiences.
From offhand comments in forum comments, hackathons, and local tech events, I'm sure many first-time Finnish entrepreneurs have some pre-formed negative-leaning opinion about how the Tekes bureaucracy works. Without getting into a discussion on how society should support entrepreneurship, realistically there has to be some sort of balance between bureaucracy and free government money. With too much bureaucracy, the system can kill entrepreneurs time and crush innovation. But if the system is too loose, you then have "entrepreneurs" buying fishing boats for their summer cabin.
Where is Tekes on this scale and how should you mangage it? To get to the bottom of the bureaucracy, we talked to Joonas Pekkanen, who's been part of a few Tekes projects. He's currently the CFO of Flockified, who are gearing up to release a full-fledged version of their group buying service. Their teaser page proudly states, "WE'RE BUILDING THE BEST DAMN GROUP PLANNING AND GROUP DECISION MAKING TOOL EVER," which we'll cover more on later in the post, but first, here's our interview with him:
Editorial note: This is a guest post by Jaakko Salminen. More information on him towards the end of the post.
One of the generally accepted wisdoms of the Finnish startup and growth company environment is shortage of private money. Startups run to Tekes for funding supposedly due to lack of available private early investments, and growth companies get sold very early when there is no VC money available. Easily available public funding is often cited as the dragon eating away any lucrative investment opportunities, and the vicious circle is ready.
Or is private money simply being directed elsewhere? In fact some very interesting sources for additional private money could be made available, if we take a forward-looking attitude.
Before applying for Tekes financing, you need to know how Tekes' money can be used. When you apply for financing, you will meet with your Tekes representative to come up with your own spending plan, which will dictate what you're allowed to spend Tekes' money on. It's been described by the entrepreneurs I've talked to as a flexible enough system as long as you confirm new expenses not included in your plan with your Tekes representative before spending any money. Last month, Elina Arpponen gave an example of not including travel costs in her original plan, but luckily she was able to re-allocate expenses with just an email to her representative.
As mentioned earlier in this series, Tekes doesn't give you money upfront to spend. Tekes reimburses entrepreneurs' receipts that stick to the funding plan laid out with their Tekes representative. But generally speaking, Tekes money can be used for any costs associated to research, development, and innovation activities. These include costs like:
Our coverage of Liilak about a month ago provides a good picture of the idea crowdsourcing service, but after talking to CEO Jarkko Jokirinta as part of a series of posts on behalf of Tekes, we learned more about the next layer they're placing on top of that service. "We aim to be the de facto link between people and businesses all around the world," says Jokirinta. "When anyone has a praise or an idea about a product they use every day or business they somehow are in connection with, all they need to do is open Liilak and share their thoughts."
In this way, they're moving towards more of a combination of Twitter, Foursquare, and a feedback system. Through each other's praises and by following other people and their suggestions Liilak allows people to learn what is buzzing. "We empower the crowd to think of better ways of doing things and create enough buzz to get the Businesses to listen."
Editors note: “Road To Exit: Start-up’s First Year” is a practical blog series addressing the most common legal questions and problems that a startup company and its management faces during their first year of operation. The series is sponsored by Attorneys at Law Borenius Ltd.
So you have the company up and running and your team is working hard on the service/product. In most cases, you soon start looking for funding beyond the usual friends, family and fools department. Building up an investment ready company affects pretty much everything you do in your company. You build up networks, polish your website and pitch your idea in the social media and various real life events (luckily, plenty of such opportunities are nowadays available). Here are some insights to financing round preparations from the legal perspective.
For the first of a series of posts we're doing in cooperation with Tekes Tempo, I had the opportunity to talk with Rami Korhonen of Playmysong about his financing through Tekes. If you're unfamiliar with Tekes Tempo, you may find a past article we did helpful as some background. In general, Tempo's goal is to quickly test products out on the market by providing financing as quickly as possible-- their aim is to provide financing within one month of a startup's application. The program's goal not necessarily to develop a finished product, but rather to gain more knowledge of markets and users.
But back to Rami and Playmysong. We've covered PlaymySong in the past, but if you haven't heard about them, Playmysong is a social jukebox app that lets you control the background music you hear when you're out at a bar, diner, or similar location. The new version of their iPhone app released last week shows your Facebook photo in the upcoming playlist, and allows you also host your own social stereo on your iPhone.
Tekes, the Finnish Funding Agency for Technology and Innovation, has launched a new financing program to support growth companies developing mobile services and applications - Tempo. Having followed Tekes for quite some time and knowing how they operate, one could easily argue that Tempo is a sign of the organisation changing tracks fundamentally and putting most of its feedback into practice. I'll go through a few examples below.
First and foremost, "as agility and customer development are essential in mobile service development, companies must be able to launch a minimum viable product to find out whether there is a customer need for it". This comes in fact from the Tempo pitch itself. They're promoting MVPs as a way to find out if there is demand for services the companies are offering.
Editor's note: This is a cross-post from the Steve Blank visits Finland -website. His visit and the awesome agenda for the week is made possible with the help of AaltoES, Tekes, Sitra, Teknologiateollisuus and others. Original text by Kalpana Shah.
Steve Blank is that rare combination of successful entrepreneur and inspiring teacher who’s also an insightful writer. His writings define, explain and predict trends that are sweeping the entrepreneurial world. Customer Development, Agile Development, the Lean Startup, The Four Steps to the Epiphany, Business Model Generation are all terms for methodologies that can actually help startups get on in life.
Vigo accelerators in Finland are planning to start building funds to further improve their possibilities in helping with startups. This has been approved by a Tekes news release (in Finnish) and in a panel discussion last week regarding Vigo accelerators. Vigo accelerators are a new form of government effort to enable growth and development of startups into the right direction with the help of serial entrepreneurs (running the accelerators).
I might sound a bit too judgmental and far fetched when it comes to putting Sofanatics as being one of the most interesting startups from Finland. Primarily because it brings all football fanatics onto one platform that has the potential to be the buzzing stadium within a browser. Do I make sense?
Last week we covered how Finnish tax payers were forced to give publicly listed companies more than 40 million euros through Tekes. The argument from Tekes' side is that these larger companies are important drivers of innovation and projects. The President of Tekes Veli-Pekka Saarnivaara has stated that this year, growth companies were the focus of their financing. In 2010 Tekes approved more than 100 million euros in funding for younger companies, less than 6 years old. This is exactly the direction we should see the financing go - or even better, tie it completely to private funding.
The news broke out today that Applifier has closed $2M in seed funding. The investors include MHS Capital, PROfounders Capital, Tekes, Lifeline Ventures, and angel investors Jyri Engeström, David Gardner and Lars Stenfeldt Hansen. The terms of the investment were not disclosed. Applifier is also announcing today that they have expanded their ad network into the web gaming space - where pain points are similar to that of Facebook; the market is fragmented, user acquisition costs are high and its becoming expensive to get users. We talked to Jussi Laakkonen about the expansion and they see huge opportunities in the space.
Tekes, the Finnish Funding Agency for Technology and Innovation, published its figures for 2010 a few days ago. In the figures are listed all the companies who received government funding, aka tax payer money, to grow their businesses. All in all, there were over 2200 companies who received funding of more than 380 million euros.
The sad part of the equation is that Finnish tax payers funded publicly listed companies with more than 40 million euros last year. This is money, the companies should budget from their own assets or turn to the markets for more financing. For comparison, the Vigo accelerator programme received 42 million euros of funding for its full tenure of three years.
While Finland has been one of the countries publicly to be noted for its gracious innovation support systems, many have wondered how all these investments and expenditures can be afforded. The simple truth is - we can't. The private Research Institute Of The Finnish Economy, Etla, has published a set of essays from the sharpest economists Finland has, that demand drastic changes to the way innovation is currently financed. While it is the lifeline of startups and growth companies, I'd argue many if not almost all would agree.
Futureful is a Finnish, research based startup that is developing a predictive discovery engine. In essence, they want to help you discover more interesting content on the internet, based on your behaviour and liking. The company was founded by Marko Anderson and Jarno Koponen and they pitch themselves as "imagine if Hunch and Flipboard bootstrapped a lovechild."