3.10.2024

Tesi’s Interim Review 1.1.–30.6.2023 – Strong result delivered

Tesi (Finnish Industry Investment Ltd) achieved a positive result in the first half of 2024, driven by rising valuations, particularly in the early-stage venture capital market. However, the operating environment remains challenging, with fundraising and follow-on financing for both VC & PE funds and startups and growth companies still significantly below peak levels.

Tesi’s IFRS result for the half-year period was EUR 71 million. During the review period, Tesi made direct investments in Finnish startups and growth companies, as well as commitments to VC & PE funds, totaling EUR 50 million. This included five fund commitments amounting to EUR 35 million and 14 direct investments totaling EUR 15 million. Direct investments consisted of one initial and 13 follow-on investments.

The market remains challenging for both VC & PE funds as well as startup and growth companies. Fundraising has slowed, with some funds falling short of their target sizes. Financing in the startup and growth company market has also slowed.

“Tesi operates on market terms and profitably over the long term. Although our half-year result was positive, fundraising conditions are very difficult for both funds and direct investments, and adaptability is required,” says Pia Santavirta, CEO of Tesi.

In spring 2024, the Finnish government proposed an EUR 300 million recapitalization for Tesi for the period of 2025–2027. As part of Tesi’s updated investment strategy, its industrial policy role will be strengthened. The recapitalization will enable larger-scale direct investments and a significant shift in Tesi’s role and operations.

“The Finnish government aims to promote and improve the conditions for economic growth in a challenging market environment. Tesi is one of the state’s most effective tools to enhance the supply of private capital in the market. Together with private investors, we can build solutions to drive growth in and renewal of the economy,” Santavirta continues.

Key Figures H1 2024 (H1 2023 in brackets):

Investments and commitments: EUR 50 million (108)
- Commitments in VC & PE funds: EUR 35 million (83), 5 funds (4)
- Direct investments: EUR 15 million (25), 14 companies (24)
  - 1 initial investment (4)
  - 13 follow-on investments (19) including 2 from corona-specific special investment programmes
Exits from companies: 10 (3)
Tesi’s result: EUR 71 million (-36)
International capital into Finnish companies from Tesi’s investor partners: EUR 73 million (73)
New capital raised by Tesi’s Finnish portfolio funds: EUR 216 million (406)
Assets under management as of 30 June 2024: EUR 2.6 billion (2.5)
- 121 fund commitments (118), including 5 fund-of-funds (5), and 114 direct investments (130)
- 2 fund commitments and 52 direct investments (52) made from special COVID-19 investment programs for initial investments.

Additional information:

Pia Santavirta, CEO
pia.santavirta@tesi.fi
+358 40 546 7749

Susanna Aaltonen, Communications Director
susanna.aaltonen@tesi.fi
+358 40 593 4221

A fix on 3 Oct 2024 at 8.25 am: H1 2023 figure for new capital raised by Finnish funds