Funding for Finnish startups fell by half last year, although venture capital firms had little trouble raising money, new data shows.
VC hesitation isn’t the only reason startups have trouble raising money. Angel and corporate investment also declined amid a funding “drought” that spread across Europe and the United States throughout 2023. There was a significant gap between foreign companies and domestic investors willing to fund Finnish start-ups, with 58 fewer investors coming from outside Finland. % year-on-year, while the decline for domestic investors was only 17%.
Finnish venture capital funds managed to maintain near-record funding levels in 2023, raising a total of €507 million in new capital into the fund. For example, Lifeline Ventures last year announced Finland’s largest venture capital fund with a total of €150 million. Additionally, Voima Ventures, IPR.VC, Gorilla Capital, and 3TS announced new funds for his 2023.
Several new players have also entered the market as Greencode Ventures, Kvanted and Failup Ventures have issued their first funds.
Investment companies of wealthy Finnish families, such as family offices, are becoming increasingly active as fund investors. In 2023, the family office contributed his 167 million euros to raised funds, recording a significant increase compared to the previous year.
Jussi SainiemiChairman of FVCA’s Venture Capital Committee, commented on the figures:
“Through concerted efforts over the years, Finland has built a solid foundation for financing domestic start-ups, which is crucial given the significant decline in foreign capital in the market. In response to the squeeze, startups are also taking proactive steps to increase capital efficiency.”
Image: Tapio Harja on Unsplash
