Market pulse survey: Better financing position in Finnish venture capital and private equity backed companies compared to last year

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The Finnish venture capital and private equity market pulse survey creates a snapshot of the business and financial position of Finnish start-ups and growth companies.

The recent survey conducted by Tesi, Finnish Venture Capital Association (FVCA), Business Finland Venture Capital, and Finnish Business Angels Network in February 2021 shows that companies have improved their runway since the last survey. Over one-half of the companies concerned believe they have sufficient funding for the next 12 months. There has been a marked improvement in later-stage growth companies (both growth and buyout) in particular. An average 23% (31% in the May 2020 survey) of respondent companies, however, have adequate reserves for less than six months.

Although the pandemic has also had a more polarising impact on the businesses since the last surveys, some 59% of VCs’ portfolio companies expect the pandemic to impact their growth forecasts positively or neutrally. The corresponding figure for growth and buyout investors’ portfolio companies is 54%. The impact on forecast sales growth in 2021 was negative in less than a half of respondent companies.

“Concerning the long-term development of the Finnish venture capital and private equity ecosystem, it comes as a positive sign that VC&PE backed companies have, on average, fared well amid the crisis. Another positive take is that international capital is available for promising companies in contrast to earlier economic crises,” says Tesi’s Matias Kaila, Director of Fund Investments.

Nevertheless, every other company has succeeded in raising financing since July 2020, representing an improvement in companies’ liquidity compared to the previous survey. Worth noting is that fundraising has favoured high-value companies, particularly those with venture capital backing. Companies expecting reduced sales in 2021 due to the pandemic also face greater challenges in raising financing. The value of investments is also concentrated in companies that have a longer runway than average.

”Venture capital and private equity backed companies are tomorrow’s success stories. The results of the survey show us that the best companies can cope even with the corona situation and even accelerate their growth with VC&PE investments. This creates optimism for the future among the companies,” rejoices FVCA’s Managing Director Pia Santavirta.

Lack of talent hinders growth

Roughly every other company has faced challenges in availability of talent. 5% of respondent companies face significant challenges in this respect. Venture capital-backed companies faced the greatest difficulties, in particular seed-stage tech startups. A high number (66%) of such companies see availability challenges also in the future, the corresponding figure being 18% for buyout companies. The survey results also highlight the fact that Finnish companies face more challenges in recruiting talent than foreign companies. The differences are especially noticeable in companies experiencing depressed growth caused by the pandemic.

”The availability of financing has improved significantly in recent years, even throughout the corona crisis. However, now lack of talent threatens the growth of Finnish companies as already every other company faces challenges in availability of talent,” Santavirta comments.

Angel investors’ deal flow record high

The survey results include outlooks by the Finnish Business Angels Network (FiBAN) to build a wider picture of the market. Based on their member pulse survey, the outlooks reveal that angel investors’ deal flow was record high in 2020, and they also believe to invest more in 2021 than in 2020. While in the previous pulse survey 65% of angel investors expected to invest less than the year before, this year the equivalent figure is only 6%. 71% do not consider the pandemic having a great impact on this year’s investment decisions.

Results of the market pulse survey
  • The previous surveys were conducted in April and May last year. The most recent (third) survey was conducted during the period 3.–12.2. It covered altogether 446 Finnish VC&PE backed companies, of which one-third are in the growth or buyout phase and two-thirds in the venture capital phase. The company sampling covers different fields and growth stages comprehensively and represents Finnish venture capital and private equity backed companies well.


Additional information:

Matias Kaila, Director, Funds, Tesi, +358 40 720 1324

Pia Santavirta, Managing Director, FVCA, +358 40 546 7749

Amel Gaily, Managing Director, FiBAN, +358 503 655 019


Tesi (Finnish Industry Investment Ltd) is a Finnish state-owned investment company that wants to raise Finland to the front ranks of renewing economic growth by investing in funds and directly in companies. We invest profitably and responsibly, hand-in-hand with co-investors, to create the world’s new success stories. Our investments under management total 1.6 billion euros. Ambition for ownership and success – | @TesiFII

FVCA is the industry body and public policy advocate for the venture capital and private equity industry in Finland. As the voice of the Finnish VC and PE community and the entrepreneurs they fund, it is our role to demonstrate the positive impact of the industry on the Finnish economy. FVCA – Building growth. @FVCA