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Tuesday, July 23, 2024

Innovestor and Business Finland VC introduce €30 million co-investment fund to accelerate growth for Finnish startups

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Finland’s VC firms Innovestor and Business Finland Venture Capital introduced Finland’s inaugural co-investment fund worth €30 million, aiming to boost early-stage investments in Finnish startups by partnering with groups of angel investors. This pioneering fund enables angel investors to collaborate with the fund, managed by Innovestor, facilitating quicker and larger investments ranging from €50,000 to €300,000 in selected startups. By merging resources, this initiative not only broadens funding opportunities for emerging Finnish startups but also diversifies the Nordic investment ecosystem, targeting sustainable innovations, deep tech, and research-based projects. With Innovestor managing the fund and a strategic partnership with BFVC, the fund serves as a crucial step in bolstering Finland’s venture capital market and supporting the growth of innovative startups, aligning with the nation’s aim of fostering a more robust startup and growth company sector.

The co-investment fund makes investments together with angel investors. Groups comprising at least three angel investors propose investments to the co-investment fund, managed by Innovestor, which then evaluates these proposals and selects suitable investments. The initial investments range from €50,000 to €300,000. In the first investment round, the fund and the angel investor group invest the same amount of capital into the selected startup. These combined investments can significantly increase funding for startups, providing enhanced opportunities for creating growth at an early stage.

The co-investment fund is a pioneering venture in Finland and an excellent example of the expanding Nordic investment ecosystem. Our co-investment fund opens up novel opportunities for both startups and angel investors alike. Historically, angel investors have largely operated independently, but with the co-investment fund, they can readily engage in lucrative investment opportunities with larger sums through the fund. For startups, the combination of multiple investors enables faster funding rounds and larger investment sizes, fostering critical early-stage growth,” says Wilhelm Lindholm, CEO of Innovestor. “Especially in today’s market climate, where there is a strong demand for financing, the introduction of a novel investment approach like the co-investment fund couldn’t be more timely. This new fund enables us to greatly ease the early-stage funding landscape for emerging Finnish startups on a broad scale.”

Innovestor’s co-investment fund invests in approximately a hundred seed-stage companies in Finland. The investment strategy focuses on companies that promote green transition and sustainable development, deep tech companies, and research-based innovations originating from universities or research institutes.

“Early-stage startups and science-based companies are key in building a more sustainable world, which is important to us. With the co-investment fund, we can also bring together an increasingly diverse group of skilled angel investors to support the growth of these companies,” says Lindholm.

The co-investment fund is a result of the measures of a working group led by the Ministry of Economic Affairs and Employment of Finland, which focuses on developing the startup and growth company sector in Finland. Innovestor acts as the management company of the co-investment fund and is responsible for the portfolio management, risk management, and reporting of the co-investment fund. An experienced team from Innovestor with decades of successful early-stage investing experience has been assembled to lead the co-investment fund. The partners of the fund are Hannu Jungman, Janne Juhola, and Petri Laine.

“There are international success stories of co-investment funds, for example in the UK, and such has been long awaited also for the Finnish investment field. The co-investment fund diversifies early-stage capital financing in Finland and also supports the international competitiveness of Finnish startups. We are very pleased that we got Innovestor to manage the fund. Innovestor’s extensive expertise in particular in research-based companies and deep understanding of the needs of early-stage startups is exactly what the success of the co-investment fund requires,” says Petri Serenius, Investment Director at Business Finland Venture Capital.

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Nurcin Metingil
Nurcin Metingil
A permanent student, a passionate first reader and nowadays doing master’s degree in Publishing Management. Beside these, I am up for games! I have been playing games since I was 6. Now, I am whispering "Business. Business. Numbers. Is this working?"

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