Finland Enters The Corporate Venture Capital Game

Investing in the 3rd most innovative country? Who would want to miss out on an opportunity like that? It seems like CVCs surely wouldn’t, as Finland attracts more and more corporate venture capital – international and domestic.

Why invest in Finland? Let’s find out.

Corporate Venturing on the rise

Global Corporate Venturing data shows that in the past five years, the number of corporates investing in startups either directly or indirectly has doubled while the value of these deals grew by 6.7 times, which is about 110 billion dollars worth of deals. This means that CVCs are inevitable for startups or scaleups to consider as long-term partners and investors – and this is a relationship worth entering wisely.

As CVC globally peaks, Finland is also becoming a part of the game: after steady years of growth, 2018 was the breakthrough year of CVC for Helsinki Business Hub, helping international investors to find business opportunities in Finland. And this growth is set to continue in 2019.

“Investors are now discovering Finland. Even though investments from CVCs are on the rise, there is still plenty of room, excellent opportunities are still left there. Finland is not a crowded space yet, investors have just started to turn towards us. Things are getting overheated in the US and some parts of Europe, but here there is still a chance for cherrypicking, some investors are able to carefully select the startups that match their interests the best.” says Jukka Jokinen, Senior Venture Advisor, Helsinki Business Hub.

“In the past couple of years, 100+ CVC investors from Europe, the US, Japan or China have shown significant interest to invest in Finnish startups The investors we are in touch with are very excited about the fact that we can provide handpicked deal flow from Finland.” Tian Yu, Venture Advisor, Helsinki Business Hub adds. “I find how James Mawson from Global Corporate Venturing put it, accurate: ‘Finland is ready to take its rightful place in the innovation capital ecosystem with domestic joining international investors’  – this really is what’s happening now.”

Diverse opportunities meet high value-add

Finland’s unique ecosystem offers diverse technologies and exceptionally supportive environment for innovation: Finland is among the top R&D spenders in terms of GDP (2.757% in 2017 according to OECD Data) and ranks number one in IPRI Score.

“From hardware to deep tech, cutting edge technologies can be found here. In addition, for corporate ventures eyeing Finland there are also lots of syndication options as there is rising activity from local players to deploy capital. There are lots of seed stage investors to partner with, and the strategic value brought by corporates is highly appreciated. Many Finnish scaleups prefer to have CVCs as strategic investors to VC investment, they see the value-add that comes with a partnership like that.” – says Jukka Jokinen.

Connecting corporate venture with the right companies

“It is not yet that self-evident for corporates to come to Finland, and we are working on changing that. The good thing is that CVCs are already attending local events, they show interest.  There are many good examples, such as a very recent investment made by Innogy Innovation Hub into Skenario Labs.” – says Tian Yu.

Helsinki Business Hub is actively facilitating matchmaking between international corporate investors and growth companies from Finland.

“We want to get to know the corporate VCs personally, to know if they are in an active investment period, if they have mandate to invest in the Nordics, if they are able to deploy capital – we don’t want to waste anyone’s time. To make sure we can facilitate quality deals, we have to know their strategy, what kind of investments do they make, and finally, but less and less importantly if they want to syndicate with local investors. This way, we can provide valuable deal flow.” – Jukka Jokinen says.

Corporate investors are mostly looking for companies operating on a very specific field, close to their own core business or to compliment it in the process of business renewal. And in Finland, they can most possibly find what they are looking for. “The three key areas that we are promoting among our partners right now are ICT, Cleantech and Digital Health – if they are looking at investing in these areas, we will  most likely find good investment targets for them” – specifies Tian Yu.

What is the next natural step to enhance activity? R&D centers to be set up in Finland by corporate venture capitals, so they can actively start investing in the ecosystem. “We already see some first signs of that” – say Tian Yu and Jukka Jokinen.

Get to know more about CVC investments

To venture further afield, join us on 5-6 June in Helsinki at Arctic15, where quality networking is guaranteed. A track is dedicated to Corporate Venturing in partnership with Helsinki Business Hub, aiming to identify the key trends and give insight on the state of today and the possibilities of tomorrow – globally and in Finland.

Among other related topics, the program will cover a global view on corporate venturing, go into the possible collaborations between CVC and VC and will showcase recent CVC investments in Finland with Topi Tiihonen, CEO of Skenario Labs. Panel discussions will answer any questions you may have about why you should consider CVC investment, what models are working and how it will impact your business.

James Mawson of Mawsonia, the company behind Global Corporate Venturing, Pratima Ayagari of Cisco and Tobias Jahn, BMW i Ventures are joining us as speakers.

You can get your tickets here.