30.8.2024

Tesi’s latest Impact Review: Profitable investment has generated growth capital for companies for some thirty years now

The new Impact Review reveals Tesi’s (Finnish Industry Investment) economic handprint that is manifested every year in almost 560 Finnish companies in which Tesi is an owner through its investments – either directly or indirectly via portfolio funds. These companies together annually generate combined net sales of EUR 12 billion and 70,000 jobs. In 2023, Finland’s aggregated tax receipts from these companies amounted to EUR 1.4 billion.

Tesi invests long-term: in our almost thirty years of operating, Tesi has invested in altogether 216 venture capital and private equity funds and 332 companies. Our investment operations have been profitable: Tesi has succeeded in doubling the capital it received from the Finnish state.

Tesi’s economic impact is multifaceted, but a common denominator is faster growth than peer companies. The figures show that relative growth in the net sales, exports and number of jobs in companies that Tesi owns or co-owns has been distinctly faster than the national average. The weaker economic outlook in 2023, however, negatively impacted net sales growth and the number of jobs also in our portfolio companies.

Every year Tesi reviews its economic handprint, as well its environmental performance, social responsibility and governance (ESG status), as a part of its Impact Review.

“Our strength is in leveraging private capital: a fairly small investment of state money generates significant volumes of growth capital. We co-invest on equal terms with private investors, and our comprehensive investment process enhances the credibility of investment projects,” explains Tesi’s CEO Pia Santavirta.

Looking at Tesi’s portfolio over the last five years, target funds have raised nine times the amount invested by Tesi, while startup and growth companies have raised three times the amount invested by Tesi. Although growth financing was successfully secured despite the weak economy, Santavirta believes that there should be more companies growing to a larger size and that their financing should be raised in Finland.

“We’re now aiming at speeding up economic growth. Finland needs new industrial-scale and more hi-tech companies globally renowned for their expertise, as well as larger Finnish venture capital and private equity funds to power their growth. It’s vital that our best companies are better anchored to Finland by Finnish capital. That will also generate prosperity for the whole country,” adds Santavirta.

Positive development in carbon footprint calculations by Tesi’s investees

Tesi monitors annual progress in the sustainability status of the Finnish startups and growth companies in which it is an owner, either directly or indirectly through funds. The review is based on the voluntary reporting template of Invest Europe, the European VC & PE association, and it examined the presence, in principle or in process, of 21 E-, S- and G-related activities.

One focus of Tesi in 2023 was to increase the use of GHG monitoring amongst the portfolio companies. Positive results are clearly visible: the number of companies calculating GHG emissions has increased by almost fifteen percentage points. Although these emissions are monitored more actively than earlier, however, only one-third of companies performing the calculations have set an emissions reduction target.

The principles of good governance are also more widely adopted now: over one-half of respondent companies have an established responsibility policy.

Tesi’s Impact Review supplements the responsibility reporting that is a part of our Annual Report and illustrates in more detail the indirect impacts of our operations on Finnish society. The Impact Review is published in early autumn because some of the data needed for the review is only available after publication of the Annual Report. The figures in this review are taken from the audited 2023 financial statements, the results of a corporate survey conducted in spring 2024, and our in-house data modelling. Tesi’s Impact Review surveys the 560 or so Finnish startups and growth companies in which Tesi is directly or indirectly an owner.