Business Finland Venture Capital leaves a lasting mark and integrates into Tesi
Business Finland Venture Capital (BFVC), known in its early stages as Tekes Venture Capital, has played a crucial role in the Finnish startup ecosystem for the past decade. From the beginning, the company’s mission has been to advance the development of the venture capital market and to direct funding especially to areas where there is insufficient private risk capital. BFVC has made significant investments in funds with visionary and talented teams capable of providing startups with both capital and the necessary expertise to achieve growth.
At the turn of the year, BFVC's operations will be integrated into the state-owned investment company Tesi (Finnish Industry Investment Ltd), marking the beginning of a new era in state venture capital activities.
Ten Years of Development and Growth
Founded in 2014, BFVC has become a key player in developing Finland’s venture capital market. When BFVC started, the seed-stage investment market in Finland was very limited, about 9 million euros per year. Today, these investments have increased tenfold, and BFVC has played a significant role in supporting this growth. As an anchor investor, the company has introduced various funds focused on different investment themes, through which over 400 startup companies have received funding.
– This is an impressive achievement and has helped strengthen Finland’s position as an innovative and competitive startup environment, Marjo Ilmari, Senior Director at Business Finland, emphasizes.
BFVC’s journey as an independent entity will come to an end at the end of the year when it merges with Tesi. This integration brings new opportunities to focus state venture capital activities and create an even stronger support structure for Finnish growth companies.
Examples of BFVC's target funds include Nordic FoodtechVC, which invests in food technology companies, FOV Ventures, focusing on startups in virtual and augmented reality, and Greencode Ventures, which promotes the green transition by investing in early-stage startups utilizing digital technologies. BFVC has also innovated the market by introducing a completely new type of co-investment fund in Finland, which invests in early-stage companies together with angel investors.
Three Key Success Factors
The success of BFVC’s operations can be summarized with three key factors that have been the cornerstones of the company’s activities:
- Agile and Startup-Minded Approach
BFVC has operated with the spirit of the startup world from the beginning — goal-oriented and agile. This approach has been crucial to the company’s success and market development. High goals have led BFVC’s activities, and a particular achievement has been the company’s 2021 strategy update aiming to double the seed-stage investment market to 70 million euros. This goal, initially seen as very ambitious, has now been achieved, but of course, developing and supporting the market requires continuous work. - Skilled and Experienced Team
The company’s success is backed by an excellent team bringing together diverse expertise and strong networks. The current team has done significant work, and special thanks are due to the former long-term CEO Esko Raunio for his earlier contributions to the company. His extensive investor relationships and trust capital were crucial in BFVC’s early stages. Additionally, the composition of the company’s board has changed through different development phases, always bringing the necessary expertise and knowledge to support the company’s path. - Strong Ecosystem Development and Theme-Based Investment Funds
BFVC’s third key success factor is its strong investment in network building and an ecosystem-driven approach. The company has focused on building fund manager teams that bring strong thematic business expertise. This model has provided startups with better-targeted support, networks, and funding. BFVC has supported fund teams in developing fund projects during the process. BFVC’s anchor investments in funds have also encouraged other investors to invest in venture capital funds. Expert investment preparation and due diligence on the target have lowered the threshold for private investors to invest in a completely new fund manager's fund.
Looking to the Future
BFVC’s journey as an independent entity will come to an end at the end of the year when it merges with Tesi. This integration brings new opportunities to focus state venture capital activities and create an even stronger support structure for Finnish growth companies.
– BFVC’s operations have left a lasting mark on the startup ecosystem, thanks to the company, Business Finland, and all participating stakeholders. Tesi's investment strategy will be renewed to respond effectively and impactfully to the changing operational environment and the goals set for the company in the government program, emphasizes Tiina Ingman, Industrial Counselor at the Ministry of Economic Affairs and Employment.
Marjo Ilmari wishes to thank all those who have been involved in this journey on behalf of Business Finland.
– Together, we have done significant work in developing the Finnish innovation field, and we are confident that under Tesi’s leadership, strong investment in the area will continue in the future. Strong seed-stage funds with their networks play a significant role in the development of successful growth companies.
BFVC's core team along with representatives from various governance and board compositions.
