Posts tagged:

vc

Are The European VC Fund Sizes Going Down For Good? Perhaps, But Who Cares

by Ville Vesterinen, February 2, 2010 — 4 Comments

Just recently Mårten Mickos, former CEO of MySQL, joined Index Ventures as an entrepreneur-in-residence. He also serves in a similar position with Benchmark Capital in US. We of course welcome this as a positive news for the European entrepreneurship.  But just a little earlier in January Fred Destin and the whole Atlas Ventures packed up and moved to Boston, leaving just enough staff to support to current European investments.

What is going on in Europe? Are we going to see the existing VC model literally disappear? Just last week I came back from DLD conference in Munich, Germany where I talked numerous people influential in the industry from Israel, London, New York and Zurich about the situation on the ground and most concurred that what we used to know as A-round-sized-VC-firms are becoming fewer and fewer. The smart ones are either going towards smaller deals and much more hands-on model or gravitating towards private equity sized funds (not least because of the hefty management fees) …well, or moving to Boston.

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State Of The Finnish Venture Capital

by Ville Vesterinen, January 12, 2010 — 2 Comments

The Nordics and Baltics are still very much a wild west when it comes to venture capital and building startups into real growth companies and all the way to the IPO dreamland.

All the countries have their peculiar histories when it comes to VC landscape and so does Finland. Will Cardwell, the CEO of Techopolis Ventures, wrote a very enlightening post called “Reeling in the last decade in Finnish VC” (here) on how the scene has developed in Finland what factors have influenced it.

Will starts out by saying that while there certainly are a lot of colorful stories, the thing that bothers him is the number of “success stories that got away. When assessing history track record he goes on to say that he emphasizes exits, since they are the only relevant measure of success for both growth entrepreneurial businesses or venture capital investing, and this area (exits) is precisely where Finnish companies have had the biggest challenges Cardwell’s view. By looking at the figures one can’t but agree.

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Entrepreneurial And Management Skills A Must

by Hendrik Morkel, November 26, 2009 — Leave a Comment

Picture 2Reporting live from the Lahti Cleantech Venture Day ‘09. The first impression is that there are lot of VCs around, which are looking to invest in Finland, and Scandinavia in general.

German, Dutch, and UK venture capitalists are present and willing to finance tickets between €1M up to €5M for first round investments. One VC on the panel commented that the economic crisis has created a lot of risk, which makes investing lucrative again – big risks, big pay-offs. The economic downturn has also made the cleantech sector more prominent and serious for investors. When you run out of money, it’s finally time to think!

While some governments have gone forward and created policies to support innovations in cleantech – feed-in tariffs and subsidies -the general feeling is that more needs to be done if the industry should remain attractive for investors and help start-ups to succeed in a market that, especially in the case of energy, is still dominated by a few big players.

While Finland and Scandinavia remain an interesting breeding ground for clean technologies, it’s generally agreed here that the cleantech sector is global. So while start-ups get going close to home, they realize that they need to get the money to go international quickly. VCs remarked that winners in the area have not materialized yet, or are being created right now. Both camps have one demand in common: entrepreneurial and management skills need to be present in the start-up -it’s not enough to just have a great product!

Invest Tech Finland – From Wireless Power to Social Games

by Karri Saarinen, June 11, 2009 — Leave a Comment

InvestTech FinlandEspoo Otaniemi boomed of startups and investors when Invest Tech Finland was held for the first time on last Tuesday and Wednesday. There was a real mix of companies from all round consumer web, nano, medical and material tech.

We got some taste of new startups, more seasoned companies seeking growth and some familiar faces marching forward with their plans. There were quite a few interesting companies to write about, the full list can be found here – check these out. Note that most of companies presented at the event already had some prototypes, partnerships, customers or revenues. Here is some of my picks (not in any particular order):
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SoundCloud Made The Big Dream A Reality

by Ville Vesterinen, April 17, 2009 — 2 Comments

soundcloudSoundCloud, a music and audio sharing service for artists, has been gaining momentum and rapidly growing their user base since the launch of the service last October. They have gone from 20,000 users to 100,000 users in a matter of six months.

Not only have they grown fast, they also just raised €2.5 million (roughly $3.3 million) in about 4 months. When we met SoundCloud at Le Web last December they were just starting to talk to VCs. Just last Thursday they signed the papers for the €2.5 million, which should give them a run way of roughly two years.

It also seems that SoundCloud is all the rage at  The Next Web Conference and one of the hottest startups present based on the number of interviews co-founder Alex Ljung is doing. I talked to Alex at the venue about SoundCloud and the experience so far. He told me about the process of raising venture capital in the current economy, what they want to do with the money and how it all got started with SoundCloud sometime in 2006 in Stockholm, Sweden. Continue reading »

Imbera Ramping Up Production – NorthZone Led $15 Million Round

by Ville Vesterinen, April 15, 2009 — 2 Comments

imberaChip-packaging company Imbera Electronics announced that it raised $15 million from NorthZone Ventures, Index Ventures and Conor Venture Partners. NorthZone led the round. Imbera is the developer of patented Integrated Module Board technology for 3-D semiconductor packaging

Previously Imbera had raised $2 million in a first institutional round and just under $1 million in seed money before that.chips

The newly raised money will go to kick start a new high-volume manufacturing operation in Sangsong-ri, South Korea, and to continue Imbera’s embedded technology evolution through its R&D activities located in Espoo, Finland.

According to VentureBeat Risto Touminen, Imbera’s chief technology officer, had worked on the technology as a student at the Helsinki University of Technology since 1999.

You can read more about Imbera’s chip packaging technology at VentureBeat here.

It’s good to see a Nordic VC’s Nordic VCs active, when the Venture Capital industry in Silicon Valley is coughing.

Dedication And Leadership In Startups

by Ville Vesterinen, April 10, 2009 — 4 Comments

teamWhen thinking about investing in a very early stage startup where the technology or the market has not been proven yet, the focus shifts to the team. Naturally there needs to be a big enough theoretical market, the technology needs to work and product needs to make sense even if only to those few individuals, namely the team and the investors (think Twitter). But when the idea is only a very rough proto or just a concept, the team will make all the difference. Team is always important, but in early stage startups it’s hugely important.

I talked to a prominent VC over a dinner this week and he told me that despite all the attempts it is very hard to determine what are the key success factors for a startup ie. which startups make it and which won’t. But one thing where there was a correlation (not necessarily causation, but correlation) was whether the entrepreneur had previsous successful starups under her belt. So not just startups, but successful ones that he followed through with regardless of whether the idea evolved as they went forward. This might sound obvious, but it is interesting still that this is the only factor that can be shown to correlate with the success of a venture. What this comes to prove is that early stage venture capital is people business. Having said that, it does not mean that you need to be a succesful serial entrepreneur to be pull it off. If the entrepreneur doesn’t have a historical track record, and most people don’t, there are other indicators to look at.

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MicroFundr – Not Just Yet

by Ville Vesterinen, April 2, 2009 — 4 Comments

microfundrYesterday we announced news that a joint group of European blogs, including us, The Next Web, TechCrunch Europe and TechCrunch France were setting up an investment fund MicroFundr™ to invest up to €14,000 Euros (USD $18,500) in Micro blogging start-ups and uses Twitter for funding process.

Some of you called us out on it, and some bought the story right up. Truth to be told it was the mother of all April Fools scams, but the point remains: The VC industry could do with some innovative new models. Even if having a smaller fund means smaller management fees.

Not only that, we also love to co-operate with the great people at The Next Web and at TechCrunch.

Back to the scam. We orchestrated the scam with Boris and the rest of The Next Web, without whom could not have done it. David from The Next Web opened up an Twitter account, whipped up graphics and the ball was rolling. Altogether we got 121 Twitter follower and numerous retweets. The full gory story is at The Next Web.

We apologize to those startups for raising false hopes, but at the same time hope that Angels and early stage funds will take note and look at Twitter not only as a bygone investment opportunity, but also a useful for tool for their trade.

MicroFundr, First Pan-European VC Fund, Will Use Twitter For Funding Process

by Ville Vesterinen, April 1, 2009 — 7 Comments

microfundr1Small Change Venture Capital is launching MicroFundr which will invest up to €14,000 Euros (USD $18,500) in Micro blogging start-ups and uses Twitter for funding process.

The Invest Fund raised just under €14 million (USD $18m) from a group of small banks and informal investors. A joint group of European blogs, including ArcticStartup(that’s us!), The Next Web, TechCrunch Europe and TechCrunch France are happy to announce the launch of the MicroFundr investment fund aimed at European small, mini and micro start-ups. We are honored to be part of such a high quality group of European blogs.

We are also excited about the new innovative way a startup can submit its application – via Twitter! As this was presented ot us it only made sense, since the best startups can communicate all they need to only in a few slides anyway, so why not to use something that helps the startups to be consice. We reiterate what Dick Vogels, VP for Small Change Venture Capital, based in Amsterdam, Netherlands, says:

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Event Roundup – Seedcamp, Barcamp And ArcticEvening Coming Up

by Ville Vesterinen, March 27, 2009 — 1 Comment

There’s couple of interesting events well worth visiting coming up.

barcamp helsinkiFirst one, BarCamp is happening on 4th April in central Helsinki, Finland. Since it’s BarCamp anything is possible. Come along, propose a session, and if there is interest from someone else, then you are up. So prepare things in advance! Un-conference does not mean un-prepared. Sessions can be any format; discussion, Presentation, demo, workshop, the limiting factor is time (and can you make it interesting!). Read more here.

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XIHA Raises Chinese VC Funding

by Miikka Kukkosuo, November 26, 2008 — 3 Comments

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.

Is Blyk Done Being A Startup?

by Ville Vesterinen, November 20, 2008 — Leave a Comment

Just as Blyk, an ad-funded, youth-oriented mobile virtual network operator, announced their partnership with Aito, they come and announce that they have closed a significant funding round of 40 million euros ($50.4 million) from their existing investors, which include Goldman Sachs, IFIC and Sofinnova Partners. Considerign the current economic climate this achievement is that much more significant.

But by following the news one can’t but wonder whether Blyk is a startup anymore at all. MocoNews.net, a news site covering the business of mobile content, reports that just as Blyk took in the investment it also announced lay offs.

Here’s a quote from Pekka Ala-Pietilä, Blyk CEO, on MocoNews.net:

[...]we are experiencing tougher times and unpredictable times ahead of us, and we like everyone else are feeling the impact, so we have to be well prepared and to do things differently internally. We are working more smartly, and we have to cut the number of people. But I can’t disclose that number.

So on one hand you have the 40 million euro that just came in and on the other you have a group of people whose services are not needed anymore at Blyk.

As said times are tough for those who try to raise financing. VC funds don’t just give out money, but the firms need to work hard to get it in and commit to certain conditions. Add to that the fact that one of the investors that is part of the 40m euro round is the infamous Goldman Sachs who is known to be cut throat in everything they do, and you start to see why Blyk partly adjusted their strategy (new partnerships with operators), and especially why the people who were there for the  startup stage need to go. The firm is not a startup anymore, but a full blown company that needs professional management, not some quirky founder DNA. At least this is how the investors see it and after all they are calling the shots when one decides to take that route.

We all grow up, even startups. Regardless, ArticStartup congratulates Blyk by pulling this off when most companies are busy telling each other how they should stop thinking about growing and start thinking about surviving.

Here’s what a Finnish serial entrepreneur and dealmake Taneli Tikka makes of the news.

Supponor gets EUR 6M in Series A funding

by Miikka Kukkosuo, September 2, 2008 — Leave a Comment

Supponor Ltd, a Finnish novel digital advertising technology provider founded in 2001, has raised 6 million euros in Series A funding. Supponor offers “digital billboard replacement” (DBR) solutions using a unique technology for real-time replacement of digital billboard ads, Supponor DBRLive. The ads are stated to appear as real as those seen on location, offering non-invasive and unintrusive new way of advertising. Live sports broadcasts are the main target for the company.

The investment round was led by a Nordic early stage venture capital firm Northzone Ventures, and a Finnish early stage technology venture capital firm Conor Venture Partners, in addition to an unnamed existing investor. The investment will be used to “leverage the business opportunities that Supponor DBRLive brings to digital advertising agencies and television right holders”. Supponor is aiming to launch DBRLive in Europe and the United States, the world’s leading markets in sports advertising.”

The investment is really big in the Finnish scale, and tells the opportunity the company is able to tackle is seen as very lucrative one so the company and investors want to move extremely fast to take on the international markets. The message to potential customers and partners brand owners, event organisers, and broadcasters is indeed very clear: Supponor promises more money, increased possibilities for segmentation and measurability, and dynamic cost-efficient content management.