Helsinki rides the Slush wave toward a booming startup future

In September 2020, Helsinki’s City Council approved plans for an expansion of the existing “Maria 01 Campus,” a former downtown hospital complex. Even before it starts spreading its acreage, the facility is already home to 120 startups and 12 venture capital funds. The campus is part-owned by the City of Helsinki and the Helsinki Enterprise Agency, but, significantly, also by Helsinki’s ‘Startup Foundation’. This is the non-profit which also owns and runs the biggest startup conference in the Nordics, Slush. Maria 01 is slated to become one of the largest, if not — possibly — the largest tech startup campus in Europe, at 70,000 square meters (or 75,3473 square feet) by 2023.

The scale of the project speaks to the confidence and ambition of the Helsinki startup ecosystem, which has grown immeasurably over the last 10-15 years.

The fact that Slush, a conference, is involved is no accident. The event is a nonprofit created by the university. This has enabled it to scale to one of Europe’s largest tech events (pre-COVID) at over 20,000 attendees. Its success has also led to traditionally conservative Finns embracing entrepreneurship. The entire city gets involved, and thousands of university students volunteer for the good of the city and the ecosystem. The collegiate nature of the Slush experience has reflected how Helsinki has grabbed the opportunities of tech with both hands.

Born of Aalto University and its student society for entrepreneurship, AaltoES, Slush originally started as a tech meetup. Indeed, I went to some of the first ones. But with the 2010’s success of local startup Rovio, creator of Angry Birds, as well as Supercell, creator of Clash of Clans, the event took off. It helped that local ecosystem players nurtured it from the beginning: Peter Vesterbacka (of Mobile Monday fame), Kai Lemmetty (of Floobs), Helene Auramo (Zipipop) and Timo Airisto, a lawyer. In 2011, Miki Kuusi became the CEO, and together with Atte Hujanen and Jenni Kääriäinen organized the event at Kaapelitehdas, with 1500 attendees. The event was staffed mainly by student volunteers from Aaltoes (Aalto Entrepreneurship Society) of Aalto University. They all egged it on from being a meetup into a full-blown conference that could attract the biggest names in tech.

Slush’s ability to attract VCs to a Northern European country in the middle of winter was impressive. The city rolled out the red carpet. That meant inbound VC exploded. According to the Finnish Venture Capital Association (FVCA), VC investment into Finland grew almost five times to €188 million between 2014 and 2018. Finland is now a European leader in terms of venture capital (says the FVCA) as a percentage of GDP, and foreign VC investments grew by 58% between 2017-18.

VC has grown leaps and bounds in the city itself. Crunchbase lists 54 venture funds of various guises in Helsinki. They include Conor Venture Partners, Inventure, VNT Management, Icebreaker.vc, Superhero Capital, Evli Growth Partners, OpenOcean, Loudspring, Norsepower Oy, Tesi, NordicNinja VC and Maki.vc.

Slush has even seen ex-employees go on to found big startups. Food delivery startup Wolt, co-founded by Miki Kuusi an early CEO of Slush, has raised $160 million. Other big startup companies from Helsinki’s ecosystem include Smartly, ZenRobotics and Blok. And let’s not forget it produced MySQL and CRF Health back in the day. In 2018, Small Giant Games, was acquired by Zynga in a deal worth up to $700 million.

Startup Genome marks out Helsinki as one of the top global ecosystems. For 2020, it valued the Helsinki startup ecosystem at $5.8 billion, with total early-stage funding of $511 million, higher than the global average for emerging ecosystems.

Helsinki has around 250 gaming enterprises and 30 of them exceed $1 million in annual sales. In 2017 Finland was the first EU country to publish a national AI strategy and the University of Helsinki created a free AI education program that saw approximately 90,000 people from 80 different countries enroll in the first four months.

Over the whole country, nearly 300,000 Finns work in tech, an enormous amount when you consider the population of Helsinki is 1.3 million.

Some startups to check out include:

Canatu (transparent conductive films and touch sensors using carbon nanomaterial): Raised $74 million.
ICEYE (developer of SAR microsatellite for earth observation applications): Raised $152 million.
Varjo (provider of head-mounted display with resolution matching a human eye): Raised $100 million.

To learn more about Finland’s startup ecosystem, we spoke to these investors:

Pirkka Palomaki, partner, Maki.vc
Jyri Engestrom, founder, Yes VC
Sakari Pihlava, partner, Vendep Capital
Pontus Stråhlman, partner, Voima Ventures
Timo Ahopelto, partner, Lifeline Ventures
Petri Lehmuskoski, partner, Gorilla Capital
Walter Masalin, Partner, NGP Capital

Pirkka Palomaki, partner, Maki.vc

What trends are you most excited about investing in, generally?
We are a generalist but are keen on deep tech and brand-driven companies both in B2C and B2B. We have been tracking closely new materials-based innovations, as well as breakthrough innovations in quantum computing. Breakthroughs happen also elsewhere and [we] have invested in B2B SaaS as well as one cloud-native massive multiplayer game company.

What’s your latest, most exciting investment?
One the latest investments is in a Swedish company called Carbon Cloud. They make it easy to discover your climate footprint and show it to the world — they can be found, for example, on the side of Oatly’s packaging. Carbon dioxide impact of consumer goods should be as visible as the nutrition values in food.

Are there startups that you wish you would see in the industry but don’t? What are some overlooked opportunities right now?
Femtech. There’s still quite little competition, but tremendous amount of work to do. Our team is keen to see more solutions on reproductive health, but also going beyond to solutions e.g., in syncing female’s personal cycle with optimal nutrition or training.

What are you looking for in your next investment, in general?
The team is always in the center and we are looking for entrepreneurs that are rewriting the future in global markets.

Which areas are either oversaturated or would be too hard to compete in at this point for a new startup? What other types of products/services are you wary or concerned about?
Free-to-play games is a tough and competitive market. There will likely be new winners, but also even greater number of companies that don’t make it compared to many other industries.

How much are you focused on investing in your local ecosystem versus other startup hubs (or everywhere) in general? More than 50%? Less?
We have a global mandate, but the Nordics is our home and where we have done most of our investments.

Which industries in your city and region seem well-positioned to thrive, or not, long term? What are companies you are excited about (your portfolio or not), which founders?
There are several, but the first on the top of mind is sustainability and new materials. Spinnova is a great example providing the textile industry with the most sustainable fibre in the world, produced with minimal harm to the environment, at a reasonable cost. With the stretch and strength qualities of cotton and the insulation of lamb’s wool, it can suit apparel, footwear, accessories, [and] home textiles to name a few applications. I’m also looking forward to seeing a great ecosystem and several startups being built around quantum computing. There are already a number of promising quantum technology companies, such as the Finnish IQM that builds world-class quantum computers and Bluefors that specialize in cryogen-free dilution refrigerator systems for quantum computing.

How should investors in other cities think about the overall investment climate and opportunities in your city?
There is strong supporting ecosystem in Finland for startups, strong engineering history and great culture of getting things done.

Do you expect to see a surge in more founders coming from geographies outside major cities in the years to come, with startup hubs losing people due to the pandemic and lingering concerns, plus the attraction of remote work?
The beauty of the startup ecosystem is that is built on innovation. We will most likely see more distributed organizations in the future, but I believe the major hubs will maintain their attractiveness in the future as well.

Which industry segments that you invest in look weaker or more exposed to potential shifts in consumer and business behavior because of COVID-19? What are the opportunities startups may be able to tap into during these unprecedented times?
Travel and hospitality has naturally taken a big hit. It will take time for the industry to fully recover and I would expect innovations in the domain in the future, whether it is in virtual travel or creating confidence in worry-free travel in the future.

How has COVID-19 impacted your investment strategy? What are the biggest worries of the founders in your portfolio? What is your advice to startups in your portfolio right now?
Extending the runway has been a general rule for many and making the company stronger and more competitive when things start picking up again.

Are you seeing “green shoots” regarding revenue growth, retention or other momentum in your portfolio as they adapt to the pandemic?
Customer support agents have been strained during the pandemic. Our portfolio company Ultimate.ai has been well-positioned to scale the customer support with their virtual agents while maintaining or even improving customer experience. I’ve been super happy to see them grow and expand rapidly.

What is a moment that has given you hope in the last month or so? This can be professional, personal or a mix of the two.

Jyri Engestrom, founder, Yes VC

What trends are you most excited about investing in, generally?
No-code, climate tech, bottom-up SaaS.

What’s your latest, most exciting investment?
Running Tide.

Are there startups that you wish you would see in the industry but don’t? What are some overlooked opportunities right now?
Vertical social networks.

What are you looking for in your next investment, in general?
Founder-product fit.

Which areas are either oversaturated or would be too hard to compete in at this point for a new startup? What other types of products/services are you wary or concerned about?
Podcasting.

How much are you focused on investing in your local ecosystem versus other startup hubs (or everywhere) in general? More than 50%? Less?
Less than 50%.

How should investors in other cities think about the overall investment climate and opportunities in your city?
Helsinki has a deep pool of technical founders, and has great opportunities for outside firms

Are you seeing “green shoots” regarding revenue growth, retention or other momentum in your portfolio as they adapt to the pandemic?
Yes, we are seeing huge lift across the portfolio from the pandemic.

What is a moment that has given you hope in the last month or so? This can be professional, personal or a mix of the two.
Founders are getting better all the time.

Any other thoughts you want to share with TechCrunch readers?
Founders should try solving bigger, harder problems!

Sakari Pihlava, partner, Vendep Capital

What trends are you most excited about investing in, generally?
Our firm believes that COVID-19 has accelerated SaaS and cloud software adoption and that the changes are mostly permanent not transient. We focus on opportunities in B2B SaaS primarily and see vertical SaaS providing many great opportunities in the next few years.

What’s your latest, most exciting investment?
Brella’s story is amazing. Brella is one of those companies that timed their new product launch perfectly with COVID-19. Brella offers a hybrid event platform for both in-person events and online events. Since March they’ve created thousands of online events for event organizers that did not have online capability at the start of the year. Now in September, they have over a million happy users and 97% of the customers recommend the product. Both sales and demand (leads) are at records.

Are there startups that you wish you would see in the industry but don’t? What are some overlooked opportunities right now?
Only a small portion of the teams have women founders or co-founders. Also, most founding teams come from a single country. We strongly believe that integrating the Nordic and Baltics hubs is important and want to provide support in getting founders together and make teams stronger and more diverse. This would make sure no opportunity is overlooked.

What are you looking for in your next investment, in general?
We always look for initial revenue and a few customers. We can help with capital to hire changemakers and connect founders with others to share best practices. However, we cannot have expertise in all verticals and thus trust customer calls for validation.

Which areas are either oversaturated or would be too hard to compete in at this point for a new startup? What other types of products/services are you wary or concerned about?
Some of the segments that need the startup to be in the U.S. from day one. These are usually the most capital intensive segments in finance or retail, for example, or segments with the highest ticket enterprise sales models, i.e., SaaS startups that can only start by selling a +$100,000 ARR ticket and in most cases professional services.

How much are you focused on investing in your local ecosystem versus other startup hubs (or everywhere) in general? More than 50%? Less?
Our local ecosystem is in Finland and we focus on the Nordics and Baltics more and more. Today our split is 75/25; next year probably 50/50.

Which industries in your city and region seem well-positioned to thrive, or not, long term? What are companies you are excited about (your portfolio or not), which founders?
Our region, the Nordics and Baltics has great engineers and an increasing number of serial entrepreneurs. We are always excited to see a team with serial entrepreneurs go at a new opportunity with all the experience and lessons from their previous venture. One of our companies, Leadfeeder, is a great example.

How should investors in other cities think about the overall investment climate and opportunities in your city?
We talk to investors in London, Berlin and Amsterdam regularly about the startups in Helsinki. I think they are all very impressed [that] Helsinki [is in] the top five hub in Europe for startups. The number of large Series A rounds in 2020 proves that all investors are actively looking at financing opportunities and teams here. Three of those have been our companies.

Do you expect to see a surge in more founders coming from geographies outside major cities in the years to come, with startup hubs losing people due to the pandemic and lingering concerns, plus the attraction of remote work?
I doubt COVID-19 can slow hubs down. I do believe that new founder teams will be more diverse when adopting a fully remote approach. The hubs will be selected in most cases to setup the legal entities as they have the financing and support required available. Helsinki is building Maria 01 into the largest startup hub and it has great infrastructure for any founding team.

Which industry segments that you invest in look weaker or more exposed to potential shifts in consumer and business behavior because of COVID-19? What are the opportunities startups may be able to tap into during these unprecedented times?
We would not invest into travel, hospitality or mobility segments right now. However, in my personal opinion it’s only business travel that has been permanently changed, the rest is still out there for grabs after this timeout. You have to look long term when starting your business. I would follow your passion, skills and the opportunities available to you when setting up my company. The entrepreneurs should aim at building great businesses long term not grabbing short-term opportunities.

How has COVID-19 impacted your investment strategy? What are the biggest worries of the founders in your portfolio? What is your advice to startups in your portfolio right now?
Our founders are more cautious with cash and hiring. The biggest worry is how does COVID-19 effect my customer and how can I make sure my product adds value to her business right now. We have no general advice right now, the last six months were sufficient for most to adopt to the present climate.

Are you seeing “green shoots” regarding revenue growth, retention or other momentum in your portfolio as they adapt to the pandemic?

Many of our companies launched new products and new pricing plans during COVID-19. We do see positive effects from these. However, we only have six months of cohorts in 20 companies so nothing portfolio-wide or industry-wide we can really build on yet.

What is a moment that has given you hope in the last month or so? This can be professional, personal or a mix of the two.
The sales results from summer months June to August confirmed what we hoped. Solid sales in our portfolio with very few exceptions and even new all-time sales records for some.

Any other thoughts you want to share with TechCrunch readers?
Helsinki is a great place to setup your next venture and raise capital from. If you are in the Nordics or Baltics and look for pre-A financing for a SaaS company email any one of us at Vendep Capital.

Pontus Stråhlman, partner, Voima Ventures

What trends are you most excited about investing in, generally?
We are a deep tech investor, investing only in Nordic and Baltic deep tech companies. We define deep tech as companies that have science-based innovations, and our sweet spot is in university spinoffs.

What’s your latest, most exciting investment?
The latest investment that I have personally overseen is in organ-on-a-chip manufacturer, Finnadvance Oy, which is a spinoff from the University of Oulu in Finland. Organ-on-a-chip devices have the possibility to revolutionise drug development and personalised medicine. At the same time, Finnadvance’s devices will significantly reduce the use of animal testing in drug research, simply because organ-on-a-chip devices give pharma companies the possibility to test drugs in discovery with real human organs, outperforming animal tests in accuracy and reliability. From a personal perspective, making animal testing obsolete is also a social advancement that I’m very excited about.

Are there startups that you wish you would see in the industry but don’t? What are some overlooked opportunities right now?
COVID-19 is so pressing in today’s societies that it takes away focus from health or environmental issues that will become pressing in the following decades. There’s an old saying that generals always prepare for the last war. Startups helping societies deal with issues such as antibiotic resistance or novel protein sources to feed a growing population, should be given more resources, as these are huge problems that will become very pressing in a decades time.

What are you looking for in your next investment, in general?
Voima Ventures is not an impact fund. As such, we have the freedom to invest in any startup defined as deep tech. However, we do think that deep technology is such that it has an impact on global ESG goals. A startup with a clear opportunity to impact some of the UN’s sustainability goals will have a good supporting trend from consumer behaviour and governmental support in the coming decade. Therefore, I feel that startups with an impact on ESG goals are very interesting at the moment.

Which areas are either oversaturated or would be too hard to compete in at this point for a new startup? What other types of products/services are you wary or concerned about?

It’s very difficult to find completely blue ocean spaces at the moment. However, our investment thesis is that a startup with a good IP portfolio can have a competitive advantage and thus create a niche for itself where it has a good possibility to grow into a large business. Technological advances are being discovered in almost any field.

How much are you focused on investing in your local ecosystem versus other startup hubs (or everywhere) in general? More than 50%? Less?
Our first fund was tied to a single research center (VTT Technical Research Centre of Finland) and our second fund that we launched in 2019 will make the majority of its investments in Finland. We are, however, actively looking into investments from all the Nordic and Baltic countries. I don’t necessarily consider Helsinki as a single startup hub — it is so connected with the rest of Finland and the Baltics and Sweden. So the majority of our investments from our second fund will go outside of Helsinki.

Which industries in your city and region seem well-positioned to thrive, or not, long term? What are companies you are excited about (your portfolio or not), which founders?
I believe that we have excellent health tech and other life sciences startups coming out from Finland. There’s a strong presence of healthcare technology companies in Finland, which grows talent and know-how that can be utilised in startups. Mahmudul Hasan, CEO of MVision AI Oy, is a fantastic example of a passionate entrepreneur with a cause to fight cancer. Finns have always had a fairly functional approach to food, which in my view places us in a good position to invent new products or services in the food tech sector. Pasi Vainikka of Solar Foods is a great example of a visionary scientist who is on a mission to make food production environmentally sustainable. Miki Kuusi of Wolt has grown his startup from an idea to an extremely fast-growing international service.

How should investors in other cities think about the overall investment climate and opportunities in your city?
The overall economic situation was very good in Finland before COVID-19 hit us. Any investor should of course analyse how the climate has affected startups. The city of Helsinki has pledged to expand the biggest startup hub, Maria 01, into one of Europe’s largest startup hubs. Also government support for startups seems quite strong. Therefore, Helsinki as a startup hub could become even more important post-COVID-19.

Do you expect to see a surge in more founders coming from geographies outside major cities in the years to come, with startup hubs losing people due to the pandemic and lingering concerns, plus the attraction of remote work?
Finland as a whole has faired quite well in the COVID-19 pandemic, relative to many other places. Let’s not kid ourselves, the financial effects of the pandemic will hurt all sectors of the economy, including startups. However, from a relative standpoint, the Helsinki startup hub could be one of the startup hubs that will come relatively stronger out of this crisis.

Which industry segments that you invest in look weaker or more exposed to potential shifts in consumer and business behavior because of COVID-19? What are the opportunities startups may be able to tap into during these unprecedented times?
Any B-to-B startup with long product development cycles need to prepare for a slowdown in corporate R&D spending. Startups need to up their game and have their products faster out on the market. At the same time, a slowdown in corporate R&D will give startups exciting opportunities once the pandemic is over and economic recovery starts.

How has COVID-19 impacted your investment strategy? What are the biggest worries of the founders in your portfolio? What is your advice to startups in your portfolio right now?
The main impact is that we are looking to give startups longer runways when we invest. Good companies will always get funded, but there will be increased risks in follow on rounds. Therefore, any smart startup would make sure that they have enough time to achieve clear milestones before a next funding round will be imminent.

Are you seeing “green shoots” regarding revenue growth, retention or other momentum in your portfolio as they adapt to the pandemic?
Many SaaS companies, both B2B and B2C, have seen strong revenue growth due to the lockdowns and the remote work.

What is a moment that has given you hope in the last month or so? This can be professional, personal or a mix of the two.
Business as usual will one day continue. I don’t think there ever was a moment of despair. Finland has endured times of economic hardship due to the fall of Nokia and the IT bubble. Every day we are working for a better future, and every day is therefore a moment that gives me hope for a better future.

Timo Ahopelto, partner, Lifeline Ventures

What trends are you most excited about investing in, generally?
The shift toward (a) the truly world-changing startups that address our sustainability challenges and (b) deep tech where we at Lifeline have invested a decade before it has became as sexy as today.

What’s your latest, most exciting investment?
Solar Foods.

Are there startups that you wish you would see in the industry but don’t? What are some overlooked opportunities right now?
Still, a lot of investors don’t touch deep tech that is perceived to be too risky, to take too much time and to require too much money. This is like mobile games in 2009/2010 when people (except Lifeline) did not invest as they were perceived too risky and arbitrary. We see this as our main opportunity again with the experience that we have gathered over the past 10 years in this field.

What are you looking for in your next investment, in general?
Global category leadership potential.

Which areas are either oversaturated or would be too hard to compete in at this point for a new startup? What other types of products/services are you wary or concerned about?
SaaS.

How much are you focused on investing in your local ecosystem versus other startup hubs (or everywhere) in general? More than 50%? Less?
We focus on early-stage (angel, seed) investments in Finland for 80% of our investments.

How should investors in other cities think about the overall investment climate and opportunities in your city?
Helsinki will be the hotbed for the next wave of sustainability and deep tech startups like it has been for mobile games during the past decade. This new wave so well fits the Finns who have been pouring money into basic research from biomaterials to electronics. We are seeing this happening with the startups like Sulapac, ICEYE, Dispelix, Varjo and others.

Do you expect to see a surge in more founders coming from geographies outside major cities in the years to come, with startup hubs losing people due to the pandemic and lingering concerns, plus the attraction of remote work?
Helsinki is truly well-positioned to capture this influx from the more densely populated countries and hubs. We are already seeing this with a lot of Finns moving in from the Valley.

Which industry segments that you invest in look weaker or more exposed to potential shifts in consumer and business behavior because of COVID-19? What are the opportunities startups may be able to tap into during these unprecedented times?
Our current analysis: The impact depends more on an individual company than an industry. Some teams manage their companies better and tune into this new situation. Of our companies, 25% are worse, 25% are better and 50% are unchanged. Of course, there are startups that e.g., serve restaurants, and they are self-evidently impacted.

How has COVID-19 impacted your investment strategy? What are the biggest worries of the founders in your portfolio? What is your advice to startups in your portfolio right now?
Cash. We make sure that our companies have cash for longer than usual runways. Also, great teams don’t take challenges as excuses but utilize them.

Are you seeing “green shoots” regarding revenue growth, retention or other momentum in your portfolio as they adapt to the pandemic?
Yes. Many companies took their time to fix operational fundamentals in April/May, and now with the easing-out lockdown, are having a strong foundation to dash forward.

What is a moment that has given you hope in the last month or so? This can be professional, personal or a mix of the two.
Helsinki-based startups raising more large funding rounds (€20-€100 million) more than ever. My hypothesis is that the ecosystem here is moving to the next phase. Also, I am excited how Slush has renewed itself into the pandemic times.

Any other thoughts you want to share with TechCrunch readers?
Keep on reading this great publication. ;)

Petri Lehmuskoski, partner, Gorilla Capital

What trends are you most excited about investing in, generally?
We invest in founders building real businesses.

What’s your latest, most exciting investment?
PodMe Ab and MOST Digital Oy.

What are you looking for in your next investment, in general?
Team’s capability to build real business.

Which areas are either oversaturated or would be too hard to compete in at this point for a new startup? What other types of products/services are you wary or concerned about?
AI, games.

How much are you focused on investing in your local ecosystem versus other startup hubs (or everywhere) in general? More than 50%? Less?
85% in our local ecosystem.

How should investors in other cities think about the overall investment climate and opportunities in your city?
Extremely vibrant and promising environment.

How has COVID-19 impacted your investment strategy?
Not at all.

Are you seeing “green shoots” regarding revenue growth, retention or other momentum in your portfolio as they adapt to the pandemic?
Yes, a number of companies are benefitting from demand changes.

Juha Ruohonen, partner, Superhero Capital

What trends are you most excited about investing in, generally?
Insight-driven superheroes.

What’s your latest, most exciting investment?
Ziticity.com.

Are there startups that you wish you would see in the industry but don’t? What are some overlooked opportunities right now?
More startups solving real-life, serious problems instead of developing more poop emojis.

What are you looking for in your next investment, in general?
Superhero team that has the market insight and ability to execute.

Which areas are either oversaturated or would be too hard to compete in at this point for a new startup? What other types of products/services are you wary or concerned about?
AI has received a lot of funding but still open to how the market will shape up.

How much are you focused on investing in your local ecosystem versus other startup hubs (or everywhere) in general? More than 50%? Less?
We only invest in Finland and the Baltics. More than 50% Finland.

How should investors in other cities think about the overall investment climate and opportunities in your city?
Helsinki is pretty vibrant and attracts growing amounts of funding all the time.

Are you seeing “green shoots” regarding revenue growth, retention or other momentum in your portfolio as they adapt to the pandemic?
Quite rarely but some.

What is a moment that has given you hope in the last month or so? This can be professional, personal or a mix of the two.
The ability of entrepreneurs to adapt to the changed market conditions. I just wish the politicians would have at least a fraction of that.

Any other thoughts you want to share with TechCrunch readers?
Helsinki tech scene is [more] than Slush. Check it out.

Marko Kyyrönen, partner, Sparkmind.vc

What trends are you most excited about investing in, generally?
Edech.

What’s your latest, most exciting investment?
Playvation Ltd.

What are you looking for in your next investment, in general?
Global scalability.

How much are you focused on investing in your local ecosystem versus other startup hubs (or everywhere) in general? More than 50%? Less?
33% or more.

Which industries in your city and region seem well-positioned to thrive, or not, long term? What are companies you are excited about (your portfolio or not), which founders?
Edtech.

How should investors in other cities think about the overall investment climate and opportunities in your city?
Improving.

Veera Pietikäinen, Associate, Voima Ventures

What trends are you most excited about investing in, generally?
Environment, healthcare, clean energy.

What’s your latest, most exciting investment?
Monidor, a developer of remote infusion therapy solution that decreases the workload of doctors and nurses while increasing patient safety. Truly helpful during this pandemic.

Are there startups that you wish you would see in the industry but don’t? What are some overlooked opportunities right now?
My personal thoughts: Unrelated to COVID-19, a lot of unused potential in femtech. I believe this is partially due to the lacking research around the female bodies in general, but hopefully this issue will get more attention when the medical therapies and preventative healthcare is becoming more and more personalized.

What are you looking for in your next investment, in general?
As a deep tech fund, we are always looking for the next great innovations that have huge potential in solving any of the major global problems around SDGs.

Which areas are either oversaturated or would be too hard to compete in at this point for a new startup? What other types of products/services are you wary or concerned about?
There is a lot of competition now in different verticals related to medical testing, such as testing technologies, analysis SW and data handling. It is getting harder to come up with an idea that would be good enough to compete against existing firms, and the demand for some technologies might plunge in a few years. It is also a good idea to be wary on any product that has a direct or implicit statement on what the “new norm” is going to be, since we can’t compare this event to anything that has happened before.

How much are you focused on investing in your local ecosystem versus other startup hubs (or everywhere) in general? More than 50%? Less?
More than 50% outside Helsinki.

Which industries in your city and region seem well-positioned to thrive, or not, long term? What are companies you are excited about (your portfolio or not), which founders?
In Helsinki or the Greater Helsinki metropolitan area, there is a clear advantage in new material and energy technologies, especially around Aalto University. In Finland generally, there is a lot of world-leading knowledge in optics and imaging.

How should investors in other cities think about the overall investment climate and opportunities in your city?
I think that there is a significant gap in deep tech investors, especially in early stage so there is a lot of room to play. We witness a lot of great ideas that have potential to become great companies, even during this pandemic. Also, researchers are always very purpose oriented, and during a global crisis like this there is clearly a spike in the amount of researchers who want to bring their innovation to the public.

Which industry segments that you invest in look weaker or more exposed to potential shifts in consumer and business behavior because of COVID-19? What are the opportunities startups may be able to tap into during these unprecedented times?
Automotive industry and consumer electronics seems to have more volatility in their economic state, so there is a possibility to squeeze into markets that have previously been dominated by larger, older firms if the new entrant can provide increased efficiency or cost savings.

How has COVID-19 impacted your investment strategy? What are the biggest worries of the founders in your portfolio? What is your advice to startups in your portfolio right now?
We take COVID-19 related matters into consideration before our investments, such as possible effect on go-to-market plans. The biggest worries are usually around successfully conducting pilots in other countries, if there are traveling restrictions. My advice to our portfolio companies is to stay positive and to try to make the pandemic the reason for their successful founder story.

Are you seeing “green shoots” regarding revenue growth, retention or other momentum in your portfolio as they adapt to the pandemic?
Mostly not, but in some firms there is more demand due to the changes from the COVID-19 situation.

What is a moment that has given you hope in the last month or so? This can be professional, personal or a mix of the two.
I think there is always more room to change yourself and your inner goals when there is a crisis, so in a way I believe this whole thing is going to change our lives for the better. I believe that tough times only make people put things into perspective and something new and better is born from there.

Any other thoughts you want to share with TechCrunch readers?
Stay healthy and support your local businesses!

Riku Asikainen, Evli Growth Partners

What trends are you most excited about investing in, generally?
Sustainable growth, sector agnostic.

What’s your latest, most exciting investment?
Refurbed, Klevu and TIER.

Are there startups that you wish you would see in the industry but don’t? What are some overlooked opportunities right now?
Europe is still lacking and is behind on B2C service at-large. Big consumer play is still lead by American (or Chinese).

What are you looking for in your next investment, in general?
Product-driven sustainable growth.

Which areas are either oversaturated or would be too hard to compete in at this point for a new startup? What other types of products/services are you wary or concerned about?
Fintech as a sector seems hyped but I have been wrong on this for a long time. Gaming/mobile games is as tough as ever.

How much are you focused on investing in your local ecosystem versus other startup hubs (or everywhere) in general? More than 50%? Less?
We obviously try to cover 100% of the home market, but coming from a small market ourselves forces us to have a much broader look. We are currently looking at all of beer-drinking Europe: Finland, Baltics, Nordics, DACH. Wine or vodka is left for others. Currently 75% outside Finland.

Which industries in your city and region seem well-positioned to thrive, or not, long term? What are companies you are excited about (your portfolio or not), which founders?
Finns and Balts will continue to surprise the world of tech with their personal and atypical approach to world problems. That is driven with the characteristics of the region. Well-educated but scarce population (limited amount of talent but best are absolutely the best in class). Not big enough home markets (global markets from the outset). Access to mainly local limited capital (efficiency on burn versus growth).

How should investors in other cities think about the overall investment climate and opportunities in your city?
First of all, talent is everywhere. There is no one city that will dictate, even SV has lost its monopoly on ideas and venture capital. So you should give all of the companies a chance on their merits not on their background. Having said that, we would always like to invest with local investors for added local support and knowledge. Helsinki is a great investment opportunity for foreign funds because it is very accessible, transparent and will help you to diversify your portfolio through innovations that are often unique and specific to the region.

Do you expect to see a surge in more founders coming from geographies outside major cities in the years to come, with startup hubs losing people due to the pandemic and lingering concerns, plus the attraction of remote work?
This pandemic will leave marks and speed up certain remote work and meeting processes but we feel that many of them would have had happened anyways. Remote teams have been the modus operandi for most of the international VC teams in Europe already pre-corona.

Which industry segments that you invest in look weaker or more exposed to potential shifts in consumer and business behavior because of COVID-19? What are the opportunities startups may be able to tap into during these unprecedented times?
Obvious losers are travel and physical-meeting-related businesses, heavy cash burn businesses with limited options to rebalance spending and companies that lacked traction already pre-corona. Deep tech companies might have more talent available, and funding permitting, could justify longer time to market. Software is still a king and great companies are getting better even faster.

How has COVID-19 impacted your investment strategy? What are the biggest worries of the founders in your portfolio? What is your advice to startups in your portfolio right now?
To us not a big change, we have always liked sales growth, cash flow and actively manageable burn rates. My advice today is that competitions are won enduring and advancing during the tough times. Never miss a crisis to disrupt.

Are you seeing “green shoots” regarding revenue growth, retention or other momentum in your portfolio as they adapt to the pandemic?
E-commerce has been booming in many forms so all e-com related has advanced nicely.

What is a moment that has given you hope in the last month or so? This can be professional, personal or a mix of the two.
It was great to see that a nation can still unite and come together in times of trouble.

Any other thoughts you want to share with TechCrunch readers?
COVID-19 will have historical relevance but it will pass, maybe even in the next 6-12 months to come. Unfortunately it will not be the last pandemic we will face, what are our lessons for COVID-2X?

Walter Masalin, NGP Capital

What trends are you most excited about investing in, generally?
Truly groundbreaking innovation is in NGP Capital’s DNA. Our limited partners, Nokia and Bell Labs, invented the technologies that are at the heart of today’s connected world. Today, they create next-generation 5G solutions for the Internet of Things and are fostering the change that we see around us. That’s why NGP Capital are natural partners for entrepreneurs, who seek to continue to invent and scale the next wave of innovations, in which data either enables or disrupts industries. Some of our current focus areas include:

Mobility, transportation and logistics.
Cybersecurity, customer experience in the telecom vertical.
Future of Work/Deskless — 5G enabling more connected workers.
Commercial IoT — Connected devices proliferating with 5G.
Industry 4.0 — NDAC/factory teams engaged.

What’s your latest, most exciting investment?
Shippeo — a French company who are digitizing the supply chain and bringing real-time transportation visibility to road and ocean logistics. Shippeo is certainly one to watch.

Are there startups that you wish you would see in the industry but don’t? What are some overlooked opportunities right now?
Not really. We track companies across the world, using an AI algorithm that we have built ourselves, so we rarely miss an unsurfaced opportunity. Which investments we then pursue or can invest in, is a different thing. Our AI is called Q and it keeps track of more than 700,000 companies worldwide, while measuring around 300 growth indicators for each company. Having said that, we would hope to see more entrepreneurs attacking large, fundamental problems in industry-specific contexts. Too many entrepreneurs are building “yet another tool” for marketing optimization or doing other niche solutions where the market size is limited.

What are you looking for in your next investment, in general?
A great team is by far the most important factor we look for, regardless of stage and industry. We also look at a bunch of other factors, but number one is always the team. An A team can execute on plan B, but a B team cannot execute on an A plan. Another important factor is the market opportunity.

Which areas are either oversaturated or would be too hard to compete in at this point for a new startup? What other types of products/services are you wary or concerned about?
We look for companies that are solving problems in a new way and that have the opportunity to lead in their segment. Typically, this requires having proprietary insights and deep domain expertise about a given industry. Without that, it’s hard to compete. I also think it will be hard to scale hardware-driven businesses that are dependent on a physical supply chain that require regular inspections. We consider the environmental impact more carefully with any new business or industry than we may have in the past. Businesses with negative impacts on the environment will be under closer scrutiny going forward.

How much are you focused on investing in your local ecosystem versus other startup hubs (or everywhere) in general? More than 50%? Less?
Much less! Because we are pan-European, we go to where the opportunity is; Berlin, Paris, Stockholm and Israel, regardless of where our offices are. Although networks are very important, residing in the locations where you invest is not, because Europe has such a diverse talent pool across the continent. Alongside our European teams in Helsinki and Geneva, NGP Capital has offices in San Francisco and Beijing, so we work as one, globally engaged team — before we invest, during diligence, through closing and all the way to the exit.

Which industries in your city and region seem well-positioned to thrive, or not, long term? What are companies you are excited about (your portfolio or not), which founders?
Traditionally mobile gaming has been very strong in Helsinki. Now we see that digital health companies coming from Finland are well-positioned to succeed because of the strong local talent and the world-class medical research happening in Finland. There is a broad range of companies growing here currently aside from digital health as well, but I don’t see another clear cluster (aside from digital health). The top 10 fastest-growing companies in Finland currently, according to our AI (Q), are: Swappie, Supermetrics, Logmore, Reactored, Oura, Ultimate, Sooma, Mobidiag, Sensible 4 and Valtavalo.

What are companies you are excited about (your portfolio or not), which founders?
Voice AI will become an important user interface and we are seeing many promising companies in that space, particularly in Finland, like Speechly. However, there are many other exciting voice AI startups in Europe, like Speechmatics (U.K.), Rasa (Germany), Cognigy (Germany), Mindsay (France). NGP Capital has just invested in Observe.ai in the USA too. There is no doubt that AI will proliferate in customer experience. We are also excited about the digitization of the transportation sector, including logistics and the supply chain. We are paying close attention to first-mile/last-mile solutions and personal mobility, like Deliveroo, Moovit and Lime. Another point of interest for us are European cybersecurity companies.

How should investors in other cities think about the overall investment climate and opportunities in your city?
Investors should be excited about the maturing, developing and improving Finnish tech ecosystem. There are a lot more investors now, more companies and a tremendous talent pool comparing to just a few years back. The Helsinki startup campus, Maria 01, is set to become the largest startup campus in Europe with new funding from the city of Helsinki. Investors should look at Helsinki, and particularly startups like Wolt, Swappie, Aiven and Supermetrics. Larger recent exits in Finland include Blueprint Genetics and Smartly.

Do you expect to see a surge in more founders coming from geographies outside major cities in the years to come, with startup hubs losing people due to the pandemic and lingering concerns, plus the attraction of remote work?
Yes. Remote work will lead to a larger scatter of startups in terms of location. Especially for pure digital plays. I firmly believe that innovation can happen everywhere. The proliferation of modern tools, among other factors, are enabling this shift. Investment activity did not slow down much in Q1 and Q2 this year, but I suspect that we will only start to see the results of the lockdown in Q3 and Q4. Because founders and investors have not been able to meet as much as they did in Q1 and Q2.

Which industry segments that you invest in look weaker or more exposed to potential shifts in consumer and business behavior because of COVID-19? What are the opportunities startups may be able to tap into during these unprecedented times?
Smart mobility, in general, has taken a real hit. Although it is likely to be temporary, it may filter out many of the weaker companies in the space. Obviously, consumer travel has also been hit hard, but I believe it will bounce back post-pandemic, although it may look different. I think startups can tap opportunities in these areas now: Future-of-work, collaboration tools, digital health and remote everything.

How has COVID-19 impacted your investment strategy? What are the biggest worries of the founders in your portfolio? What is your advice to startups in your portfolio right now?
It has not affected our strategy, but we have been focusing a lot on portfolio management and we have temporarily slowed down investment pace.

What are the biggest worries of the founders in your portfolio?
Three main areas are worrying the founders I have talked to. The first is how to manage and motivate employees and retain their teams. How company culture is managed now will undoubtedly determine the long-term success of their businesses in the future. The second is fundraising. What are the real, long-term impacts of not being able to meet potential new investors due to travel restrictions? How should I organize my next funding round? The third is around customers and demand. When and how will customers return, and when will the markets pick up again and what will demand look like?

What is your advice to startups in your portfolio right now?
Stay resilient. Companies are realizing that doing the right thing now is the ultimate customer retention strategy. Stay focused on the consumer, continue to invest in your product, carry out scenario planning and try to balance optimism with realism.

Are you seeing “green shoots” regarding revenue growth, retention or other momentum in your portfolio as they adapt to the pandemic?
Our companies in digital health and edtech have seen tremendous demand due to the current situation (Babbel, Clue and Lifesum to name a few examples from our portfolio).

What is a moment that has given you hope in the last month or so? This can be professional, personal or a mix of the two.
It has been an unprecedented year for everyone. In certain sectors we have seen strong rebound, which is encouraging. Many companies were able to transition to remote working models quickly and the way both people and companies have adapted has been encouraging to see. I have also been overwhelmed by the strength and resilience of the team here at NGP Capital and our portfolio company founders.

Any other thoughts you want to share with TechCrunch readers?
Our Helsinki team is based in the Maria 01 startup campus and it’s just remarkable to see how the ecosystem is developing. The talent pool is simply incredible. There is a reason why we chose to build our global AI development and marketing out of Helsinki. My message to the TechCrunch readers is: Look out for Helsinki!

Walter Masalin, Partner, NGP Capital

What trends are you most excited about investing in, generally?
Truly groundbreaking innovation is in NGP Capital’s DNA. Our limited partners, Nokia and Bell Labs, invented the technologies that are at the heart of today’s connected world. Today, they create next generation 5G solutions for the internet of things and are fostering the change that we see around us. That’s why NGP Capital are natural partners for entrepreneurs, who seek to continue to invent and scale the next wave of innovations, in which data either enables or disrupts industries. Some of our current focus areas include:

● Mobility, transportation and logistics
● Cybersecurity, Customer experience in the telecom vertical
● Future of Work / Deskless –5G enabling more connected workers
● Commercial IoT –Connected devices proliferating with 5G
● Industry 4.0 –NDAC/Factory teams engaged

What’s your latest, most exciting investment?
Shippeo – a French company, who are digitizing the supply chain and bringing real-time transportation visibility road and ocean logistics. Shippeo is certainly one to watch.

Are there startups that you wish you would see in the industry but don’t? What are some overlooked opportunities right now?
Not really, we track companies across the world, using an AI algorithm that we have built ourselves, so we rarely miss an unsurfaced opportunity. Which investments we then pursue or can invest in, is a different thing. Our AI is called Q and it keeps track of more than 700,000 companies worldwide while measuring around 300 growth indicators for each company. Having said that, we would hope to see more entrepreneurs attacking large, fundamental problems in industry-specific contexts. Too many entrepreneurs are building ‘yet another tool’ for marketing optimization or doing other niche solutions where the market size is limited.

How much are you focused on investing in your local ecosystem versus other startup hubs (or everywhere) in general? More than 50%? Less?
Much less! Because we are pan-European so we go to where the opportunity is; Berlin, Paris, Stockholm and Israel, regardless of where our offices are. Although networks are very important, residing in the locations where you invest is not, because Europe has such a diverse talent pool across the continent. Alongside, our European teams in Helsinki and Geneva, NGP Capital has offices in San Francisco and Beijing, so we work as one, globally engaged team – before we invest, during diligence, through closing and all the way to the exit.

Which industries in your city and region seem well-positioned to thrive, or not long-term? What are companies you are excited about (your portfolio or not), which founders?
Traditionally mobile gaming has been very strong in Helsinki. Now we see that Digital Health companies coming from Finland are well positioned to succeed because of the strong local talent and the world class medical research happening in Finland. There is a broad range of companies growing here currently aside from Digital Health as well, but I don’t see another clear cluster (aside from Digital Health). The top ten fastest growing companies in Finland currently, according to our AI (Q), are: Swappie, Supermetrics, Logmore, Reactored, Oura, Ultimate, Sooma, Mobidiag, Sensible 4 and Valtavalo.

What are companies you are excited about (your portfolio or not), which founders?
Voice AI will become an important user interface and we are seeing many promising companies in that space, particularly in Finland, like Speechly. However, there are many other exciting Voice AI start-ups in Europe, like Speechmatics (UK), Rasa (DE), Cognigy (DE), Mindsay (FR). NGP Capital has just invested in Observe.ai in the USA too. There is no doubt that AI will proliferate in customer experience. We are also excited about the digitization of the transportation sector, including logistics and the supply chain. We are paying close attention to first-mile/last-mile solutions and personal mobility, like Deliveroo, Moovit and Lime. Another point of interest for us are European cyber security companies.

How should investors in other cities think about the overall investment climate and opportunities in your city?
Investors should be excited about the maturing, developing, and improving Finnish tech ecosystem. There are a lot more investors now, more companies and a tremendous talent pool comparing to just a few years back. The Helsinki startup campus, Maria01, is set to become the largest startup campus in Europe with new funding from the City of Helsinki. Investors should look at Helsinki, and particularly start-ups like: Wolt, Swappie, Aiven and Supermetrics. Larger recent exits in Finland include Blueprint Genetics and Smartly.

Do you expect to see a surge in more founders coming from geographies outside major cities in the years to come, with startup hubs losing people due to the pandemic and lingering concerns, plus the attraction of remote work?
Yes. Remote work will lead to larger scatter of startups in terms of location. Especially for pure digital plays. I firmly believe that innovation can happen everywhere. The proliferation of modern tools, among other factors, are enabling this shift. Investment activity did not slow down much in Q1 and Q2 this year, but I suspect that we will only start to see the results of the lockdown in Q3 and Q4. Because founders and investors have not been able to meet as much as they did in Q1 and Q2.

Which industry segments that you invest in look weaker or more exposed to potential shifts in consumer and business behavior because of COVID-19? What are the opportunities startups may be able to tap into during these unprecedented times?
Smart mobility, in general, has taken a real hit. Although it is likely to be temporary, it may filter out many of the weaker companies in the space. Obviously, consumer travel has also been hit hard, but I believe it will bounce back post pandemic, although it may look different. I think startups can tap opportunities in these areas now: Future-of-work, collaboration tools, digital health and remote everything.

How has COVID-19 impacted your investment strategy? What are the biggest worries of the founders in your portfolio? What is your advice to startups in your portfolio right now?
It has not affected our strategy, but we have been focusing a lot on portfolio management and we have temporarily slowed down investment pace.

Are you seeing “green shoots” regarding revenue growth, retention or other momentum in your portfolio as they adapt to the pandemic?
Our companies in Digital Health and EdTech have seen tremendous demand due to the current situation (Babbel, Clue and Lifesum to name a few examples from our portfolio).

Any other thoughts you want to share with TechCrunch readers?
Our Helsinki team is based in the Maria01 startup campus and it’s just remarkable to see how the ecosystem is developing. The talent pool is simply incredible. There is a reason why we chose to build our global AI development and marketing out of Helsinki. My message to the TechCrunch readers is: Look out for Helsinki!