Halfway through November, Helsinki’s Kaapelitehdas cultural centre will be bursting at the seams with enthusiastic entrepreneurs and financiers looking for promising companies. This year, 5 000 participants are expected to take part in this event, dubbed Slush.
Slush exemplifies the growing interest in startups. It is by no means just a Finnish phenomenon, because half of the more than one thousand companies that have signed up for Slush are foreign. Further proof of the growing interest is the increase in venture capital investments in Finnish companies this year.
Finland is turning into the startup hub of the North, amassing the most interesting companies, the best talent and the most successful investors.
There are a number of reasons for this. University students have become excited about growth companies. The best example of this is Aalto University, born out of a merger of the Helsinki School of Economics, the Helsinki University of Technology and the University of Art and Design Helsinki. In Finland, strong engineering expertise has been paired with user-orientation. Examples of this mindset are the successful game companies Rovio, Supercell and Fingersoft.
Even adversity can be turned into an advantage. The havoc brought on by the Finnish economy has released into the markets a great number of experts with international business experience.
The rise of Finnish startup companies has also been influenced by the State’s innovation financier, Tekes, which bears the investment risks together with startup entrepreneurs and investors.
Finland is not quite ready yet, however. An important aspect of a startup hub like Silicon Valley is that investors and entrepreneurs can, if they need to, pull away from the companies through a corporate merger or acquisition or by going public. In Finland, going public has been very minimal, and industry has acquired very few Finnish startups. That is why the only way of pulling away from a company is to sell to a foreign buyer.
In addition to an active startup field, Finland needs more dialogue between fledgling companies and Finnish industry. The dialogue could lead to new creative growth for industry through co-operation with startups or through acquisitions. At the same time, the Helsinki Stock Exchange needs new listed companies.