Keep Calm and Wait for an Exit: Role of exit values in Finnish ecosystem

Despite Finland’s position as one of the hottest tech hubs in Europe, it looks like as Finnish ecosystem is missing out on the critical mass of good exits.

Exit value is an important factor when evaluating the health of entrepreneurial development in a country. High values signal satisfactory fund returns for local partners and guarantee a strong local VC ecosystem. However, according to Creandum’s 205 exit analysis, Sweden’s share of exit value among Nordic countries was 59%, Denmark’s 22%, Norway was at 12% and Finland accounted for just 7%.

We asked Jarkko Penttilä from Conor Ventures, Tom Henriksson from Open Ocean Capital and Timo Ahopelto from Lifeline Ventures what Finland can do to increase the number (and value) of exits. Here are some insights they shared.

Learn from the leaders. Silicon Valley is still #1, but why?

According to the Compass 2015 Global Startup Ecosystem Ranking, Silicon Valley continues to be the world’s leading innovation economy. It tops the charts for VC investments, startup company exit valuations, as well as its talent pool, entrepreneurial support and networks. Over the last 2 years, Silicon Valley captured an astounding 47% in value from all exits among the top 20 startup ecosystems.

But the real reason this particular area is at the heart of tech and innovation might surprise you. It all starts in space.

Silicon Valley’s innovative history begins in the 50’s when the Soviet Union launched Sputnik 1 – the first artificial Earth satellite. In response, the US established NASA, who needed massive technology innovation to put the first person on the moon. The most successful innovator at the time was Fairchild Semiconductor, whose products were widely used in airspace and other industries, later followed by its own employees creating spin-off startups. On the back of this trend, the area saw its first venture funding and companies like AMD, Intel and NVIDIA sprung up.

By the time the 80’s rolled around, Apple – along with a dozen other computer businesses – was actively innovating in the Silicon Valley. The hardware industry was quickly growing, followed closely by software and Internet giants like Google, Cisco and later Facebook, LinkedIn and more.

Nokia breakdown: Finnish Sputnik moment

For Finland, the Sputnik moment was the collapse of Nokia’s phone business. In 2011, Nokia contributed heavily to Finland’s ranking as one of the top 10 countries to start a business. The company laid off some 40,000 people, lost most of its talent, but at the same time boosted the Finnish ecosystem by investing up to 150,000 euros ($185,000) in its departing employees’ startups. The programme also provided training and other support services.

“When we talk about the Silicon Valley we are referring to about 60 years of development. The Finnish startup ecosystem is still quite young and that is what holds us back from hitting the charts. Our biggest exit was in 2013 when Supercell sold 51% of its shares for $1.5 billion. In essence, it was a combination of skills, talent, planning and execution + right timing and a little bit of luck,” said Timo Ahopelto from Lifelines Ventures.

Timo Ahopelto. Photo: SlushMedia/Samuli Pentti

So what makes up the Finnish ecosystem and how does it facilitate startup growth? Let’s take a look…  


At number 5 on the Global Innovation Index, Finland comes out on top in terms of talent. Plus, the Finnish education system is ranked as one of the best in the world. Working in a startup requires a new way of thinking in order to accomplish things that have never been done before. In Finland, strong collaboration and knowledge transfer between startups, universities and R&D centres is fueling this mindset.


FiBAN, a non-profit organisation for Finnish private investors is the largest and most active angel network in Europe, with over 500 members. Finland also has the highest number of active investors in the Nordic region. In 2015, Finnish early-stage startups received around 37 million euros in funding. This year, Finnish business angels invested in 271 startup companies, already 10% above last year’s total.

According to FiBAN statistics on private investments and equity, the median individual angel investment per round decreased from €25,000 to €20,000 last year. This can be viewed as a sign of a matured angel investment culture, where investors decrease risk through diversified portfolios and co-investing.


Aimed at “hacking” the early stage funding environment, accelerators prepare companies for their first investment within a short time frame by providing mentorship and training. This relatively new concept started in Boston in 2005, when Paul Graham launched a program to help business students build their first project.

In Finland, Founder Institute lists 16 seed accelerators. Startups can find accelerators that suit their specific needs; for example, NewCo and Startup Sauna welcome innovative startups, while Vertical Accelerator and xEdu focus on health and education.


Corporate venture activity in Finland is constantly on the rise, according to Helsinki Business Hub Investor Services.

While Finland doesn’t have true giants like Facebook or Apple to support local tech, corporations like Nokia and Microsoft contribute to the startup ecosystem in many ways, including driving local acquisitions. The new Microsoft Flux, for example, helps startups by offering work-spaces and giving access to free networks, tech devices, and coaches. Companies like Tieto, Zalando and Futurice get their hands on young talent by sponsoring hackathons and organising networking events.

Venture Capital

In 2015, VCs invested 96 million euros in startups, the highest GDP investment ratio in Europe. Plus, according to the Finnish Venture Capital Association (FCVA), Finnish companies received the most early-stage venture capital investments across Europe when compared to the size of the national economy. 

“Exits do happen in Finland, it’s just their monetary value is not high enough. We didn’t have mega exits except for Supercell, and that affects our position when it comes to statistics,” said Tom Henriksson from Open Ocean Capital.

In fact, VC/PE firms exited 99 Finnish companies in 2015.

“When talking about great exits, people tend to think rare B2C unicorns. Not many talks about enterprise SW or more in general B2B, but the number of exits on that front is actually quite promising,” says Jarkko Penttilä from Conor.


In Finland, entrepreneurs have plenty of public funding at their disposal like Tekes, Sitra, Finpro, Finnvera, and EU-wide projects like Horizon 2020.

For example Tekes, a publicly funded organisation is playing a big role as a billion seed fund that invests in startups and R&D projects, with involvement in about 60% of all innovation startups. Supercell and Rovio both raised funding from Tekes at the initial stage. In addition, the country’s tax system is favourable when it comes to acquisitions, while immigration policies attract foreign entrepreneurs and talent.


The Finnish startup community is getting stronger with events like Slush and Arctic15. Both open doors to the Nordic ecosystem for regional and global startups and investors. They spring community into action and make sure that people get to know each other and ultimately, close deals. Often, startup events constitute the “good luck” element, providing a great opportunity to meet the right investors, learn from business advisers and international experts, find talent, talk to other startups and simply get noticed.


Stay Calm – Success is Right Around the Corner

High public and private investments in R&D, strong linkages between universities and industries, together with an excellent education and training system drive the country on well-paved entrepreneurial path. All we need is to develop global, scalable and valuable businesses, build strong relationships with customers, partners and international partners, plus have some patience. A journey from starting the business to making an exit takes years of work, but that’s the way to get more big winners and show better results in the future.

All things considered, it’s safe to say that the Finnish startup ecosystem is getting stronger each year. In Q1 2016, there were 34 tech exits in the Nordics totalling  $1.27 billion; 7 of these were in Finland. Nordic countries also rank high in terms of scale-ups, at the same level as the UK, Germany and France put together. According to the SEP Monitor Report, Finland ranks second with 126 scale-ups among the Nordic countries.

We are on the right path – companies are able to raise bigger rounds. Wolt raised $11 million earlier this year, Enevo received $15 million, and Kiosked raised $30 million in Series B funding. Plus, the amount of external funding to Finnish companies has grown in the last few years. To me, those are clearly good signs of a growing ecosystem,” concludes Timo Ahopelto, Lifelines Ventures. Helsinki Business Hub Investor Service confirms that prominent foreign VCs are to invest in Finnish companies with an increasing pace.

Indeed, the latest funding data from research firm Funderbeam reveals that Finnish startups raised the most capital in the Northern Europe in the third quarter, leaving behind the usual market leaders from Sweden, and other Nordic countries.

Finnish firms raised a total of 73 million euros in the July-September quarter, boosted by European Investment Bank loans to Enevo, Frosmo and others. Plus, online analytics firm Verto raised a $16.1 million Series B round led by newly-founded EQT Ventures, Conor Venture Partners, Open Ocean Capital, Vision+, Finnish Industry Investment, and additional angel investors participating.

Helsinki Business Hub Investor Talks introduces Finnish investment scene. To get on their radar, contact HBH Investor Services.