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Finnish wind turbine manufacturer WinWind raised €120 million in September 2008. Lassi Noponen, Chairman of WinWind at that time, agreed to share his experience building a successful investment strategy from the initial seed round to a successful exit.

During the early 90’s, Lassi worked for Neste Plc in various legal,technology and M&A positions and (with an MBA from London Business School)as VP and Group Controller at Neste. In the late 90’s he left Neste for investment banking and joined Evli Corporate Finance as a partner.

The story starts in the early 2000’s, when Lassi was co-founder and CEO at Proventia, a cleantech venture fund. Proventia made the first investment (of € 1 million) in WinWind’s first round. Later on, Lassi negotiated the later rounds with the Finnish pension fund Varma and Finnish Industry Investment. In 2006, Lassi managed the rounds with the Indian Siva Ventures as the Chairman of WinWind. Finally, he managed a €120 million round with Masdar of Abu Dhabi in 2008. 

How was WinWind’s financing strategy different to the other wind companies?

The development of large infrastructure technology such as wind turbines does not actually fit startups well. Time cycles are so long and the capital needs so large. WinWind has been venture funded for almost ten years now: it managed to break the essential entry barrier by selling the first pilot turbines for paying customers. In addition, the other key issue was to have an energy company (PVO) as a strategic shareholder enabling cash flow and vital references from the start.

How does the investment culture differ between Asia and North Europe?

One strategic decision in WinWind’s breakthrough was leapfrogging the technology to Indian markets via major and original Indian shareholders. An Indian presence and a global story backed by a major Indian owner was needed to get global investors interested in WinWind. India has a huge domestic market and growing export industry: major Indian players such as Siva Ventures think on a very large scale. They had much bigger plans for WinWind than we could have imagined a few years earlier. In my view, the defining characteristics of Indian investment culture are the ability to think big with a limitless availability of human resources.

What would be your tips to help a (cleantech) start up raise finance?

Do your homework with investment pitches. Investors have millions of investment options but you only have the one thing to sell.

First, choose the right market. Like for instance, the wind turbine technology market is maturing today and the global consolidation process is ongoing. However, there are still opportunities for sub-technologies offering a less competitive and less capital intensive business model for technology development. All renewable energy comes from the sun and will come from the sun ever more directly over time. The most interesting business opportunities are therefore not in the generation but in the storage, transportation and saving of energy as well an in the interphase between generation and use of energy.

Second, the fast will eat slow. Raise enough capital to allow technology development and market penetration in the shortest possible time frame – even at the expense of dilution.

Thirdly, try to come up with a business model that allows debt leverage as early as possible.

In your personal opinion, has the economic crisis set back cleantech?

The recession carries the risk of a regulatory shift toward cleantech slowing down – examples can been seen in the forest industry’s demand for exemption from electricity tax. However, it does not look like this is happening on a major global scale and cleantech may well be one of the biggest drivers of economic recovery when it really starts. On the other hand the whole notion of cleantech will vaporize over time as any good science will capture the need to be environmentally friendly.

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