VersoVentures carves out spinoffs with new €50 Million fund

    A company comes down to resources, processes, and priorities (RPP), so what should larger companies do with the parts of your company that are creating value to someone, but don’t fit directly into your framework?

    There’s clear value out there for getting spinning them off. As Nokia’s platform burnt to the ground, the narrative of Finland’s revival is the number of spinoff companies that have risen from their ashes thanks to the Nokia Bridge program.

    Nokia didn’t search for any upside with their bridge program, but what if there was a good way to spin off companies, getting them off your balance sheet but still reaping the upside? With so many R&D and side businesses under major European brands’ wings, there’s plenty of value out there that can be better monetized with enough resources to let them fly on their own.

    That’s the concept behind VersoVentures‘ new €50 million fund at first closing, which will invest in businesses that are “not living up to full potential in their current environment”. The fund is targeting non-core businesses, or companies that can reuse corporate technology in new customer segments. An example would include businesses in larger M&A transactions that don’t fit the buyer’s strategy, but still has wings.

    Spinning off companies isn’t an easy task, so VersoVentures has developed their own methodology to speed up the carve-out process while reducing the costs associated with it.

    “During the past year we have contacted more than 70 technology companies in Finland and in almost all of them we have found potential targets to cost efficiently spin out smaller businesses into new independent companies”, says Anssi Kariola, Managing Partner of VersoVentures in a statement.

    The investors in the fund’s first closing are European Investment Fund (EIF), FoF Growth II, Ilmarinen Mutual Pension Insurance Company, Finnish Industry Investment Ltd and AI-Partners Ltd. VersoVentures is still talking to LPs about the next phase of fundraising, and targets a final closing with up to €75 million by mid-2015.

    ”VersoVentures has created a unique new concept in Europe, serving the very attractive market segment that is hard to penetrate for traditional venture funds. The European Investment Fund wants to ensure the capability of spin-off companies to get funding in Europe and we believe Verso Ventures has the potential to become a partner of choice for European corporates and a successful spin-off specialist venture fund”, says Tatiana Issaeva, Investment Manager in the European Investment Fund.

    man with carving knife image by shutterstock