Photo of Pia Santavirta
 Pia Santavirta, managing director of the Finnish Venture Capital Association (FVCA), is delighted with the growth and diversification of the venture capital space in Finland, saying it is better equipped to support the refinement of ideas into successful businesses. Image: Pääomasijoittajat ry FVCA

Finnish startups recorded nearly 30% surge in investments

Startups in Finland received almost 1.2 billion euros in investments in 2021, surpassing the previous record total by 30 per cent.

Aleksi Teivainen

27.04.2022

Finnish venture capital investors accounted for 190 million euros and foreign venture capital investors for over 550 million euros of the record-breaking yearly total, the latter representing a year-on-year increase of 305 million euros.

Foreign companies and private investors injected more than 300 million euros in startups, making up roughly a quarter of the yearly total. Foreign capital, therefore, accounted for over 70 per cent of investments in Finnish startups, highlighted Pia Santavirta, managing director of the Finnish Venture Capital Association (FVCA).

Finnish angel investors, Finnish crowdfunding campaigns and Finnish companies and other investors each contributed about 50 million euros toward the total.

Janne Holmia, board chairperson at FVCA, attributed the surge partly to the diversification of the startup ecosystem in Finland. “Previously, a major part of startups provided services for other companies, but recently the best consumer service companies have enjoyed massive growth rates. Wolt and Swappie are good examples of these types of companies.”

Wolt, a Finnish food delivery platform that was recently taken over by DoorDash, announced early last year the closing of a 530 million-US dollar funding round.

A graph of investments in Finnish startups between 2010 and 2021.

Investments in Finnish startups rose by nearly 30 per cent between 2020 and 2021, reveal data compiled by the Finnish Venture Capital Association from EDC, FiBAN, Finnvera, HBH Investor Services, Repomedia and Vigos. Image: FVCA

Another factor behind the surge is the level of ambition and development demonstrated by the venture capital sector in Finland. The amount of investments in seed-stage startups, for example, jumped by 79 per cent to 52 million euros.

“These investments create possibilities for new success stories,” said Santavirta.

Finnish venture capital investors currently manage almost two billion euros in assets after a number of successful fundraising campaigns in recent years, with six funds crossing the 100 million-euro threshold. The space has also grown to include a handful of sector-specific funds such as the food technology-focused Nordic FoodTech Venture Capital and metaverse-focused FOV Ventures.

Santavirta viewed that a larger and more diverse group of investors will “undoubtedly” be better equipped to support the next wave of startup ideas that have the potential to blossom into market-leading businesses.

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