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Investing in growth

Finnish Industry Investment Ltd.
Finnish Industry Investment plays an important part in Finland’s innovation system by giving dynamic growth companies access to the financing they need to expand internationally.

Investing in growth companies, both directly and through venture capital and private equity funds, is central to the contribution that Finnish Industry Investment (FII) makes to helping stimulate Finnish industry, promote the development and deployment of new technology, and create new jobs.

FII’s investment focus is on growth and international expansion, together with mergers & acquisitions and restructuring; and its key principle is to work hand-in-hand with private investors – from Finland and abroad – to share the risks involved while boosting the availability of funding, investment expertise, and networking opportunities.

FII pays special attention to areas with significant growth potential that typically suffer from limited access to private capital, such as high-risk technology companies and the mining sector.

A specialist in developing, manufacturing, and supplying oil spill recovery equipment and services, Lamor maintains a global presence to ensure that it can deploy its expertise rapidly and effectively wherever and whenever a spill occurs. FII has been an investor since 2012.

FII always aims to make a return on its investments, in the same way as private investors do, and believes that companies backed by venture capital tend to grow faster, create more jobs, expand internationally more rapidly, and attract more-experienced board members than other companies. As a government-owned investment company, objectives linked to economic and social impact also play a key role in FII’s mission – and are reflected in a greater emphasis on areas such as job creation, strengthening selected industries, and fostering growth in specific fields than is typical of conventional venture capitalists.

Partnering up with international venture capitalists

Young growth companies are entering the international arena at a much earlier stage in their development today than even just a decade ago, and need to be able to operate effectively in the international marketplace much earlier as well. Venture capital investments are also more international today, and Finnish venture capital investors now typically see the Nordic region as their ‘home market’ rather than just Finland alone.

Reflecting these trends, FII has gradually stepped up its investments in international venture capital and private equity funds, as a means of increasing these funds’ investments in Finnish growth companies. An increasing number of FII’s co-investors also come from abroad today.

FII is keen to draw the attention of international venture capital funds to Finnish growth companies and the opportunities they offer. In addition to leveraging new sources of funding, this can help give Finnish companies access to valuable contacts and expertise, while introducing international investors to world-class technology and know-how.

FII also channels international venture capital to Finland by introducing Finnish companies to foreign financiers through the annual Enterprise Finland Venture Forum, for example.

Endomines has been increasingly active in exploring and developing gold deposits in Finland over the last few years, and opened the Pampalo gold mine in 2011. FII has been an investor since 2003.

Focusing on cleantech and mining

Cleantech is one of today’s fastest-growing sectors and offers extensive and growing global business opportunities. It is also an area in which Finnish technology and know-how have a lot to offer – in fields such as energy efficiency, renewable energy, and environmental expertise.

FII has been an active investor in the cleantech sector for more than 10 years and has invested in businesses involved in renewable energy, smart grids, and environmental technology, amongst others. More than a dozen Finnish cleantech companies to date have received investments from FII, from start-ups to publicly listed companies – and FII expects cleantech to remain a focus area for its investments into the future.

FII has also been an active investor in the Finnish mining sector for a similar period of time, helping develop exploration projects into operational mines. Investments began in the early 2000s, when metal prices began moving upwards after a lengthy decline and Finnish ore reserves began attracting increasing international attention. Since then, FII has invested some €40 million in eight mining companies operating in Finland, with projects that have attracted financing totalling more than €1.3 billion to Finland.

Given the massive and still largely underexplored potential of Finland’s bedrock, FII is currently running a €30 million investment programme specifically dedicated to mining cluster needs. Investments are made according to the same principles employed for FII’s overall portfolio: in cooperation with and on the same terms as private investors, Finnish or foreign, and with a clear focus on operations in Finland.

  • Finnish Industry Investment (FII) is a government-owned venture capital and private equity company
  • FII invests in private equity funds and directly in growth companies
  • Focus on rapid growth, international expansion, M&A financing, and industry restructuring
  • FII’s capital under management currently stands at €700 million.
> Anna Kilpeläinen
(Published in HighTech Finland 2013)