Unfair Advantage - 005 - Operating Systems Of Our Lives
In the fifth episode we talk to Estonian investor and serial entrepreneur Allan Martinson. Allan Martinson is the managing and founding partner of MTVP. MTVP is one of the more well known and successful investment companies operating in the Baltic region. In the show, we discuss numerous things about the Nordic and Baltic startup scene as well as the role of accelerators. Martinson also tells us what he thinks needs to be done on the regional scale to get things working better and more effectively.
We also want to thank our first sponsor of the show: Kippt.com - it makes bookmarking and reading the web easier (and we'd like to add beautiful). It works well on your browser as well as on your mobile devices like iPad and iPhone.
Finally - you're also able to now find us in the top navigation under Unfair Advantage. You'll find all the shows there for future reference.
Oh Private Money, Where Art Thou?
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.
Would Transparency In Company Financials Increase Innovation?
A few days ago I listened to Horace Dediu's Critical Path and it got me thinking that would governments be able to increase innovation and competition through more transparency in the economy. Dediu talked about the movie business in one the more recent shows and he stated it many times that it is very hard to analyse the industry at large as they do not provide any figures on how different players are doing.
Further into the podcast, he went on to explain the findings of his study and more specifically how movies are financed as well as how the accounting works in the industry. Having listened to his findings, I completely understand why there is so little innovation and disruption taking place in the industry.
The lack of innovation was put in concrete explanation in Fred Wilson's blog post on AVC yesterday where he argues that scarcity is a bad business. He writes how he wanted to find something interesting to watch through many different legal movie services, but was unable to find anything worthwhile. In the end he had to resort to a "foreign rogue site", as he put it.
DealDash Recruiting Talent With Strong Growth And $1M Investment
Our January's recruiting partner is DealDash, a Helsinki, Finland based startup. They operate a "gamified" shopping site that we've been covering recently. Back in October we covered their growth in quite a bit of detail, but we're very happy to report that this growth has further continued and seems to continue into the future. To fuel this, they of course require the best of talent that is out there.
Currently DealDash is looking for front-end developers. If you've got your doubts about the financials of this particular startup, you need not worry.
GrabCAD Closes $4 Million Series A Financing
GrabCAD has closed a $4 million in Round A financing led by Matrix Partners. This is in addition to their seed round of $1.1 million they closed in June 2011. Other existing investors in GrabCAD participated in the round. According to Hardi Meybaum, the CEO and Co-Founder of GrabCAD, the investment will be used to improve the community and product at large.
SoundCloud Scores A $50 Million Round
Soundcloud, the Berlin-based startup founded by Swedes Alexander Ljung and Eric Wahlforss, has reportedly received a $50 million investment led by Kleiner Perkins Caufield & Byers including participation by GGV Capital. TechCrunch has estimated the round to be around $50 million, but Soundcloud did not confirm the round size in their press release about the investment.
The Zendesk Story, A Moment With Mikkel Svane
I managed to grab 20 minutes of Mikkel Svane's time in LeWeb to interview him on the evolution of Zendesk and some of the thinking they had behind building a world class company in just a few years. Zendesk isn't just your usual startup, if there really even is one. Zendesk very early decided to move its headquarters to the States after raising their second round in 2008. The company focuses in providing the very best help desk solutions online, which only aren't extremely easy to use and integrate, but also beautiful.
Preparing For A Financing Round
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.
Russia Will See Huge Opportunities For Years
I talked to Marina Treshchova, CEO of Fast Lane Ventures, a Moscow based early stage venture capital firm a few weeks back about the investment market in Russia. Fast Lane Ventures is quite a young investment company, but during their 18 months in operation they have invested in almost 1 company every month. Treshchova summed up the situation that there are so many opportunities in Russia at the moment that they have to run really fast.
Tradeshift Raises $17M At $137M Valuation From Russia
Tradeshift, originating from Denmark, has announced a $17M investment round from two Moscow based investors at a valuation of $137M , according to a recent press release. The investors in the round were ru-Net and Kite Ventures. The company stated the money will be used to speed up product development and expand into the North American market.
iZettle, Competitor To Square, Closes 8.2M Euro Investment
iZettle, a Sweden based company looking to crack the social payment problem, has closed an 8.2M euro investment from Index Ventures, Creandum and Charles Dunstone, CEO and Co-founder of The Carphone Warehouse. The round was lead by Index Ventures. iZettle's solution is very similar to that of the US leader's in this space, Square. They have an iOS app that users are able to download for free and then use that app, together with a small chip-card reader, to accept and pay for goods and services with your credit card.
Endomondo Raises $2.3M And Reaches 5M Downloads
Endomondo, the company developing a mobile sports tracker application by the same name, has announced its $2.3 million financing round from Denmark based SEED Capital. Endomondo was launched in September 2008. The company's mobile app has gained substantial traction since February, when we reported it reached a previous significant milestone of 2 million downloads.
Anil Hansjee Joins Creandum
Anil Hansjee, former head of Corporate Development at Google EMEA, joins Creandum the Sweden based Nordic VC firm as an investment advisor. Creandum also recently announced the hiring of Hjalmar Winbladh as a Venture Partner. The team continues its growth in knowledge, but also in the breadth of its networks.
“As Creandum seeks to build the leading venture firm in the Nordics, we strive to build a network of leading individuals to work with. These individuals should have superior deal flow, company building and investment experience, and international network. Anil ticks all these boxes. Needless to say we are thrilled to work with Anil to build global businesses.” says Johan Brenner, Creandum General Partner.
Multitouch Closes 2 Million Euro Investment
The Finnish manufacturer and designer of touch based large screens, Multitouch, has secured a 2 million euro investment from the Finnish Industry Investment and Veritas Pension Insurance. The investment will be used to speed up the company's sales and marketing efforts including their international operations. Previous investors, founders and seed fund Vera will continue as owners in the company as well.
The company was founded in 2007 and has received a good start ever since. Earlier this year we covered the company as it designed the Twitter wall for CES. According to the press release, Multitouch has currently clients in 40 countries.
Grow VC Turns Free
Grow VC (or Grow Venture Community) is a community-based platform that helps start-ups acquire the initial funding either through crowd-sourcing or through direct investments from venture capitalists or business angels. As of today, Grow VC scrapped their membership fee and opened their network for free for anyone. Members of the community that would like to invest into listed start-ups can purchase a micro investment membership and invest all the credits they bought. The monthly plans are $20, $50 and $150. No commission is charged from direct investments by professional investors either. Grow VC also recently released an iPhone app to help their members keep updated on the go.
Growth Companies Accounted For Half Of Employment Effect In Finland Between 2006-2009
As our partnership with Nexit Ventures is coming to an end, so are the items we'll be covering. In the second last item we're covering - we'll focus on the importance of startups in an ecosystem, such as Finland in this case with recently published data. The importance of growth companies to an ecosystem is mostly known by the entrepreneurs running these companies. They see the potential that so many others fail to see. The data in this post should strike as interesting to many, to say the least.
VC Per Capita: Finland $46, Sweden $45 (US $72, Europe $7)
Last week we published a post on venture capital per capita. In those figures, Europe was shown in a light not too respectable. Where as Israel received a whopping $142 of venture capital per capita, Europe was at mere $7. Last week some other interesting statistics came out regarding Finland's investment amounts for this year. Mikko Suonenlahti, in a Kauppalehti article, forecasts Finland to receive some 175 million euro of investments this year. If you divide this by the 5.37 million people Finland has, it turns out to some $46 per capita, only this year. Naturally we wanted to find out what the figure is for Sweden and it's pretty close: $45 per capita (overall investments 2.67 billion SEK and a population of 9.35 million people).
Mobile Computing Revolution
Mobile computing is said to be the third step in the evolution away from smartphones, according to a recent report by Morgan Keegan. We got our hands on this as part of our partnership with Nexit Ventures, who know this stuff by hard and have realised the potential there is in the market place. Mobile computing is thought to be the next step after the mobile investment theme, which succeeded the smartphone investment theme. Why is this significant then for investors and entrepreneurs alike?
Flockler, Hitlantis Victorious In Tallinn Pitch Competition
We organized an elevator pitch competition the other week as part of the International Technology Law Association's Fourth Annual Baltic Conference. It was the third year in a row we have thrown the pitch competition. This year we had five companies (introduced below) taking part. Flockler emerged as the winner, and the runner-up position was grabbed by Hitlantis by Cognitive Maps Ltd.
The winners and the other finalists (not in any particular order):
Flirtic Raises Funding From Almaz Capital
The news today and this week seem to be all about Estonia and for a great reason too! Flirtic, another Estonain company is flying high - they have raised funding from Almaz Capital, a Russian VC firm. Flirtic is a new approach to online dating. It borrows a lot from social networks in terms of usability, but puts all this into an online dating context.
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.
ASI Makes Its First Exit From Russia
Ambient Sound Investments, ASI, has made its first exit from Russia according to Quintura. ASI has sold its stake in SaaS-based inventory management software provider LogneX (Moy Sklad). Interestingly enough, LogneX was also ASI's first investment in Russia. ASI sold its stake to 1C, which is a Russian based ERP service provider.
Open Ocean Capital Closes Fund Three Worth 40M Euro
Open Ocean Capital, founded by some of the individuals that invested into MySQL before it was later sold to Sun MIcrosystems, has raised its third fund - Fund Three. The amount was reached in the first closing. Open Ocean Capital looks to use the funds to invest into startups in "Europe and beyond", pretty much meaning there is no geographical restrictions on those who can apply.
Reminder: Elevator Pitch Competition For Nordic & Baltic Startups – Apply Now
As announced earlier, we're organizing an Elevator Pitch Competition for all startups and growth companies in the Baltic and Nordic countries on June 3rd in Tallinn. The applications are due tonight May 12th at 8:00 PM EET.
We'll have a pan-Nordic/Baltic VC jury, so this is a perfect opportunity to put yourself on the radar and get valuable feedback on your pitch from an experienced jury. We also have great prizes for the winners, and of course coverage on ArcticStartup.
Pitch And Win - Announcing Elevator Pitch Competition For Nordic And Baltic Startups
For the third time, we are organizing an Elevator Pitch Competition for all startups and growth companies in the Baltic and Nordic countries. The competition will be held in Tallinn on June 3rd at the International Technology Law Association's IV Tallinn Conference.
Whether or not you're interested in applying to the pitch competition, check out the conference agenda (pdf) which features this year a keynote address by Toomas Hendrik Ilves, President of Estonia, and topics like marketing and branding, early stage financing, and landing the first customers. The conference is free to attend, but space is limited and registration is needed.
Game Fundings And Acquisitions $1.89B In 2010
Venturebeat has a story out on 2010 and how game fundings and acquisitions developed compared to 2009. Growth was spectacular and in terms of percentages, the size of the fundings and acquisitions rose by 130% compared to 2009. Thus in 2009 the overall size of the market in these terms was $819 million. The data is provided by IHS and is said to cover international markets. According to IHS, the numbers cover funding and acquisitions activity in all areas of gaming except mobile gaming.
Did Supercell Just Receive Funding?
Back in February we covered a new Finnish gaming startup called Supercell. It was founded by Mikko Kodisoja, one of the gaming gurus in the Finnish gaming industry. Supercell also received a significant amount of funding from London Venture Partners' Phil Harrison (ex-Sony global studio director), David Gardner, (ex-EA COO, one of the early investors into Playfish), David Lau-Kee, Paul Heydon, Initial Capital LP (fund founded by serial entrepreneurs) as well as Jari Ovaskainen (ex-Iobox CEO). However, Petteri Koponen, one of the founders and early stage investors in Lifeline Ventures tweeted something interesting before and during the weekend.
Vigo Accelerators To Start Building Funds
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).
Venture Capital In Finland In 2010
In our previous story with Nexit Ventures we talked about how 2010 was a good year for venture capital in the US. This time, we're digging into the state of the venture capital industry in Finland. I again, turned to Artturi Tarjanne for some research data on the situation. Overall in Finland, 97 million euro worth of venture capital investments were made. This is little over 4% increase from 2009 when 93 million euros worth of VC investments saw day light.
New $60M Fund For European Startups Emerges In Britain
Big news coming out from Britain. Passion Capital, a new investment company has just announced that they've closed a $60 million fund from both private investors as well as the UK government. Private investors put in $20 million and the British government upped the ante with a $40 million. Passion Capital features three partners, Stefan Glaenzer, Eileen Burbidge and Robert Dighero. The trio is among the most high profile angel investors in Europe.
