The Finnish startup ecosystem has been showing plenty of promise in the last decades. Following Nokia’s decline, the country’s tech prowess has rested on the broad shoulders of the gaming scene, which produced Supercell, Europe’s first decacorn. Behind the gaming giants, a number of companies in a variety of fields are waiting to break out, but for the country to experience a Sweden-like golden era of startups, Finnish entrepreneurs need more local money and late stage maverick investors willing to take risks, coupled with a supportive government eager to facilitate the growth of startups.
Sami Lampinen, the founder and managing director of Helsinki-based Inventure, an early stage VC fund, strikes a more optimistic tone:
Comparing Finland to Israel’s early days, Timo Ahopelto, one of the main players in the Finnish ecosystem, is equally hopeful:
The comparison to Israel also reveals structural problems in the Finnish ecosystem. The two countries were competing head to head until late 1980s. Sakari Sipola, whose PhD dissertation compares Finnish and Israeli ecosystems, argues that there are serious structural problems that prevent Finnish startups from gaining international success.
And while acknowledging successes other than gaming, Dromberg believes the comparison to Israel is shaky:
Much like Ahopelto’s Lifeline Ventures and Lampinen’s Inventure, most Finnish VC’s are focused on pre-seed or early stage financing. The number of angels is also on the rise, but what is needed is a flurry of investors willing to finance global expansion.
Tekes and the role of government
While typically the best thing for the government to do is to stay out of the way, in Finland, where government is omnipresent, it can play a constructive role. The government’s investment arm Tekes is behind almost every Finnish startup.
Whether Tekes’ role in the long term is constructive, as opposed to a genuinely free market - with no external entity leveling the playing field -, is debatable, and many disagree with Tekes’ central role in financing the Finnish ecosystem.
In the Finnish context, with or without Tekes, the government has a big role to play in terms of removing hurdles and unnecessary regulations.