We have compiled data from leading sources to help you quickly grasp what Finland’s venture capital and startup scene has to offer
Did you know that Finland is one of the most innovative countries in the world? It ranks fourth on Cornell University’s Global Innovation Index, Bloomberg’s index of most innovative countries, and the World Economic Forum‘s global competitiveness report. The National Science Foundation also classified Finland as the country with the third highest R&D/GDP ratio (3.8%) in the world.
Its unique combination of high-end research, education, innovation and technology makes it stand out in the European Union and the world at large. Both the Finnish government and Nokia have contributed immensely to the fact that Finland has become one of the major tech hubs outside of Silicon Valley. They have helped both local and foreign startups grow through funding and beneficial policies, such as government incentives to foster and promote innovation. Another contributor to this success is the rich collaboration and knowledge transfer between startups and Finland’s higher education institutions and R&D centers.
Finland is widely known for the success of its gaming startups such as Rovio and Supercell, but other sectors including cleantech, health and mobile are also doing remarkably well.
This report aims to provide you with a snapshot of Finland’s startup and venture capital ecosystem. It features data from the last four years about VC and angel investments, funding rounds, startups, unicorns (billion-dollar companies), exits and more. The data in this report is based on our own research, with details about our sources at the end. We welcome you to check out this ecosystem and consider all of the opportunities it holds.
Country at a glance
|Total area||338,000 square kilometers|
|Time||UTC + 2 hours during winter, UTC + 3 hours during summer|
|Population||5.4 million; 67% live in towns or urban areas, 33% in rural areas|
|Largest cities by population (2013)||Helsinki (603,968), Espoo (256,824), Tampere (217,421), Vantaa (205,312), Oulu (190,847) and Turku (180,225)|
|Neighboring countries||Estonia, Sweden, Norway, Russia|
|Languages||Finnish 91.2%, Swedish 5.5%, Other 3.3%|
|Ethnic Makeup||Finn 93.4%, Swede 5.6%, Russian 0.5%, Estonian 0.3%, Roma 0.1%, Sami 0.1%|
|Origin of GDP||Agriculture: 2.9%, Industry: 25.1%, Services: 71.9%|
|Largest companies in Finland||Sampo, Fortum, Nokia, UPM-Kymmene, Kone, Pohjola Bank, Neste Oil, Stora Enso, Wärtsilä, Metso, Outokumpu, Kesko|
Main funding rounds above $1 million in 2014
In 2014, Finnish startups raised over $145 million. These are all the companies that raised more than $1 million:
|Company||Capital Raising (in millions of dollars)||City||Sector||Month of Last Round|
|Mendor||12.64||Espoo||Health and Wellness||July|
|BetterDoctor||10||San-Francisco (Previously Espoo)||Health and Wellness||July|
|Beddit||8.5||Espoo||Health and Wellness||September|
|Blueprint Genetics||3.9||Helsinki||Health and Wellness||September|
|Small Giant Games||3.1||Helsinki||Gaming||October|
|HeiaHeia||1.9||Helsinki||Health and Wellness||April|
Key charts to understand Finland’s startup ecosystem in 2014
June was the highest fundraising month, with $29.3 million raised. September scored second, with $26.3 million.
While gaming still comprises most high-level startups in Finland, health and wellness startups are becoming a close second.
However, investors still prefer gaming ($54.9 million) over health and wellness ($36.94 million). After health and wellness, the mobile sector also raised a significant amount of capital: $30.5 million.
Helsinki is by far the favorite hub for startups, outnumbering other cities by a factor of at least three.
However, Helsinki barely raised more money than Espoo. This could indicate that Espoo will experience a startup boom in the near future.
What VC and angel investment data reveals about the number of investments in startups in 2014
Among the various reasons Geektime decided to focus on Finland as a region of interest is that Finland has the highest number of active investors in the Nordic region, according to the Nordic Web. Though 2014 saw a drop in early stage startup investment (€206 million) from 2013 (€279 million), this was mainly due to the fact that Supercell had a €100 million funding round, as reported in a March 2015 analysis compiled by the Finnish Business Angels Network (FiBAN) and Finnish Venture Capital Association (FVCA) about Finnish tech companies in 2014.
FiBAN presented their survey data on Finnish business angel activity in 2014. With data collected from 200 angels, they concluded that in 2014, Finnish angels invested €21 million in 238 startups. This is a record amount in comparison to 2013, when angels invested €11 million in 164 startups. The total number of angel investments in 2014 was 307. In 2013 it was 234, and in 2012, just 235.
According to the survey, the amount of early-stage investments is one of the highest in Europe. FiBAN’s angels made 1.6 new investments on average in 2014, and the median angel investment was €25,000 and the average €69,000. Besides gaming, the most prominent sectors for early-stage investment were mobile (21%) and cleantech (14%). Investments in the mobile gaming sector cover almost one fifth of all the angel investments in Finland.
FVCA (the Finnish Venture Capital Association) reports that during the first three quarters of 2014, there were 76 venture investments in startup companies. In 2013, the total number of venture investments in startup companies constituted 135. In 2012, it was 80.
According to ArcticStartups, the total amount of angel investments in 2013 was about €11 million, a €3 million decrease in comparison to 2012. The average angel investment was €49,000 for 8% of equity in the startup, making the average valuation of an early stage startup €612,500. Forty-seven percent of investments are done at an early stage, though not the seed stage. As the ecosystem becomes more secure, investors are increasingly inclined to invest in later rounds, as evidenced by the drop in seed stage investments from 23% in 2012 to 13% in 2013.
The Nordic Web
The Nordic Web recently reported that Finland has the highest number of active investors. See more information in their spreadsheet of active Nordic investors sortable by stage, location and vertical (available to members only). It’s also worth checking our their data on capital funding in the Nordics (2014).
Number of Finnish startups
Based on Startup100’s research, there are around 850 startups in Finland today. You can find the full list in our guide to the Finnish VC and startup ecosystem: We’ve encountered a similar number of Finnish startups.
However, different sources state much lower numbers of startups. FiBAN reported that 400 startups applied to join FiBAN this year. In 2013, it was 350 and in 2012, merely 200. This correlated with the current number of Finnish startups that Angelist shows: 391. Tekes, the Finnish Funding Agency for Innovation, states that they have helped finance 660 startups in 2014.
Startup100, a site that ranks Finnish startups monthly based on their online marketing activities and performance, told Geektime that they keep track of 850 startups at the moment. We can assume that the difference in the numbers is due to the fact that FiBAN, Angelist and Tekes all rely on data that is submitted to them by startup representatives, while we and Startup100 collect the data directly.
Geektime reviewed some of the best Finnish startups out there in this post.
Number of unicorns (billion-dollar companies): 4
Nokia ($28.1 billion), Rovio ($4 billion), Supercell ($3 billion).
Exits in 2014:
Creandum‘s research indicates that Finland had 91 exits in 2014 at the value of $6.3 billion. The Nordic Web claimed there were 15 key exits in Finland in 2014. These are the main exits we’ve identified with the help of Neil Murray from The Nordic Web.
|Applifier||Unity Technologies||March, 2014||Undisclosed|
|Nervogrid||ALSO Group||March, 2014||Undisclosed|
|ProtoGeo (Moves)||April, 2014||Undisclosed|
|One Nordic Furniture||FAB||June, 2014||Undisclosed|
|Nonstop Games||King||August, 2014||$100 million|
|Uraakmaailma||Alma Media||August, 2014||Undisclosed|
|Ubisecure||Global Sign||September, 2014||Undisclosed|
|Continuent||VM Ware||October, 2014||Undisclosed|
|GameWorks||Next Games||October, 2014||Undisclosed|
|Ajelo||Split Technologies||December, 2014||Undisclosed|
Active angels: 34
These include the following prominent investors: Aarne Sipilä, Anne Berner, Anssi Vanjoki, Ari Hyppönen , Ari Korhonen, Eero Lähteenmäki, Esther Dyson, Feodor Aminoff, Hannu Kytölä, Heikki Sundquist, Henric Suuronen, Inka Mero, Jaakko Salminen, Jari Osmala, Jari Ovaskainen, Juha Kurkinen, Jyri Engeström, Kaj Rönnlund, Kari Ollila, Kristian Segerstrale, Marko Ahtisaari, Olli-Pekka Kulmala, Pekka Vartiainen, Petri Lehmuskoski, Raimo Kuismin, Riku Asikainen, Risto Siilasmaa, Sami Etula, Sari Vaajanen, Taneli Tikka, Tarmo Pallari, Yuri Arcurs, David Gardner, and Lars Stenfeldt Hansen.
Number of VC management companies: 13
These include the following VCs: Aboa Venture, Aura Capital, Butterfly Ventures, Canelco Capital, Conor Venture Partners, Dasos Capital Oy, EQT Partners Oy, Finnvera, Helmet Business Mentors Oy, Inventure, Tekes Venture Capital, Vendep Startup Fund, and MHS Capital.
Number of accelerators and incubators: 19
These include the following accelerators and incubators: Aaltoes, AppCampus, Boost Turku / Startup Farm, Cleantech Invest (Vigo), East Wings (Vigo), Gorilla Ventures (Vigo), Helsinki Ventures (Vigo), KopiCatch (Vigo), Lifeline Ventures (Vigo), Nestholma Imaging Startup Accelarator (NISP1314), YLE Media Startup (Nestholma), NewCo Factory, Newentures (Vigo), Royal Majestics (Vigo), Demola Program (Sanoma), Startup Sauna, Vendep (Vigo), Veturi Venture Accelerator (Vigo), and Frontier.
You can get an inside look into the minds of Finland’s top movers and shakers here.
Edited by Laura Rosbrow
Feature Image Credit: Olga Smirnova / Shutterstock