Finnish VCs raised well in 2023 as startups struggled

Funding for startups in Finland dropped by half last year, new data shows, though venture capital firms had few problems raising for their funds.

VC hesitancy is not the only reason that startups struggled to raise; angel and corporate investments also saw a decline in the midst of the funding ‘drought’ that permeated Europe and the US throughout 2023. There was a notable disparity between foreign entities willing to fund Finnish startups and domestic investors: investors from outside Finland decreased by 58% compared to the previous year whereas for domestic investors the decrease was only 17%.

Finnish venture capital funds managed to maintain fundraising levels close to records in 2023, raising a total of €507 million in new capital for funds. For example, Lifeline Ventures announced Finland's largest venture capital fund last year, totalling €150 million. In addition, Voima Ventures, IPR.VC, Gorilla Capital, and 3TS announced their new funds in 2023. 

Several new players also entered the market as Greencode Ventures, Kvanted, and Failup Ventures published their first funds.

The investment companies of wealthy Finnish families, e.g. family offices, have become increasingly active as fund investors. In 2023, family offices contributed €167 million to the funds raised, marking a significant increase compared to previous years.

Jussi Sainiemi, Chair of FVCA’s Venture Capital Committee, commented on the figures:

"Finland has laid a solid foundation for financing domestic startups through years of concerted effort, which has been crucial in light of the significant decrease in foreign capital. In response to the tightening market, startups have also taken proactive measures to enhance capital efficiency.”

Image: Tapio Haaja on Unsplash