technopolis online annual report 2009

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Technopolis OnlineAnnual Report 2009

2TECHNOPOLIS PLC April 7, 2023

Finnish Venture Capital Market 2009• 60% decline in the

Euro value of investments* (From €255 million in 2008 to €101 million in 2009)

• 30% decline in number of investments (59 in 2009 compare to 85 during 2008)

2008 2009 - €

50,000,000 €

100,000,000 €

150,000,000 €

200,000,000 €

250,000,000 €

300,000,000 €

0

20

40

60

80

100

120

€ #

*Without megadeals of WinWind and Blyk in 2008 (€160m) the value of investments actually rose in 2009

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Finnish Venture Capital Market 2009• There was a very large reduction of

international investments in 2009 (5 vs. 12 deals)

• The average size of the investments (excluding the megadeals) increased significantly, reflecting domestic investors making larger investments to substitute for the lack of international capital.

• In Euro terms, the most popular industries in 2009 were nanotechnology and software, compared to mobile technologies and software in 2009TECHNOPOLIS PLC April 7, 2023

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Investments by Industry

• The most popular industries in 2009 were nanotechnology and software

• A significant increase in the value of investments made into nanotechnology, driven largely by the Heptagon investment (1164%),

• A major decline in value of mobile industry investments (-72%), and

• A threefold increase in number of investments in life science industry while the value of investments declined.

TECHNOPOLIS PLC April 7, 2023

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Investments by Industry cont’d


- €

5,000,000 €

10,000,000 €

15,000,000 €

20,000,000 €

25,000,000 €

30,000,000 €

35,000,000 €

40,000,000 €

0

5

10

15

20

25

30

€ #

- €

5,000,000 €

10,000,000 €

15,000,000 €

20,000,000 €

25,000,000 €

30,000,000 €

35,000,000 €

40,000,000 €

0

5

10

15

20

25

302008

€ #

2009

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Average Round Size by Industry

• Biggest gainer in average round size by industry was nanotech led by Heptagon and Silecs investments, which saw an increase of 1164

• Cleantech (210%), hardware and semiconductors (267%), industrials (216%) and life sciences (106%) industries witnessed increases

• Mobile (-60%) and software (-25%) industries declined

TECHNOPOLIS PLC April 7, 2023Cle

antech

Hardware

...

Indust

rial

Life S

ci...

Mobile

Nano

Software

- €

2,000,000 €

4,000,000 €

6,000,000 €

8,000,000 € 2008 2009

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Investment Stages and Industry Comparison• In 2009, second round investments were

clearly larger than in 2008• Only the mobile and life science industries

didn’t have bigger second rounds in 2009 that in 2008

• The only industries that received later stage investments were the life sciences and nano industry

• There were no fourth round investments in 2009.


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Investment Stages and Industry Comparison


- €

5,000,000 €

10,000,000 €

15,000,000 €

20,000,000 €

25,000,000 €

30,000,000 €

35,000,000 € 2009

Third Second

First Seed

0 $

5,000,000 $

10,000,000 $

15,000,000 $

20,000,000 $

25,000,000 $

30,000,000 $

35,000,000 $2008

Fourth Second

First Seed

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Investments by Investor Type and Origin• Number of domestic investments slumping as

much as 49%, while the invested Euros remained approximately at the prior year’s level

• Amount of inbound international investments in 2009 decreased significantly - five clear international VC deals during 2009 compared to twelve international deals in 2008

• In Euros the market suffered even more: in 2009 Finnish companies raised nearly 80% less international growth capital


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Investments by Investor Type


Domestic International Angel - €

20,000,000 € 40,000,000 € 60,000,000 € 80,000,000 €

100,000,000 € 120,000,000 € 140,000,000 € 160,000,000 € 180,000,000 € 200,000,000 €

0

10

20

30

40

50

60

70

80

2009 (M€ / #)

€ #

Domestic International Angel - €

20,000,000 € 40,000,000 € 60,000,000 € 80,000,000 €

100,000,000 € 120,000,000 € 140,000,000 € 160,000,000 € 180,000,000 € 200,000,000 €

0

10

20

30

40

50

60

70

80

2008 (M€ / #)

€ #

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Invested Euro by investor type


Domestic Angel International - $

20,000,000 $ 40,000,000 $ 60,000,000 $ 80,000,000 $

100,000,000 $ 120,000,000 $ 140,000,000 $ 160,000,000 $ 180,000,000 $ 200,000,000 $

2008 2009

Millions

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Number of investments by investor type


Domestic Angel International0

10

20

30

40

50

60

70

2008 2009

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• The Helsinki Metropolitan Area received much more investment than the rest of the country compared to 2008

Geographical distribution


HMA63 %

Rest of Finland37 %

Number of Deals 2009

HMA45 %

Rest of Finland55 %

Number of Deals 2008

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Geographical distribution

• In value terms, the difference was even bigger


HMA37 %

Rest of Finland63 %

Value of Investments 2008 (€)

HMA72 %

Rest of Finland28 %

Value of Investments 2009 (€)

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Stage distribution

• Early stage companies attracted a clear majority (78%) of the number of investments in 2009

• Later stage investments instead were bigger in terms of Euros (62% of all invested Euros)

• The biggest change from the prior year was the shift of invested Euros more towards early stage companies


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Stage distribution – Number of deals


Seed34 %

First44 %

Second19 %

Third3 %

2009

Seed46 %

First42 %

Second9 %

Fourth1 %

2008

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Stage distribution – Euro invested


Seed10 %

First29 %

Second53 %

Third9 %

2009

Seed5 %

First23 %

Second22 %

Third47 %

Fourth3 %

2008

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Investment activity by quarter

• Over the course of 2009, the number of investments declined overall relative to 2008’s figures until hitting rock bottom in Q3’09 with only 11 investments made

• The only quarter where the Euro sum of investments made was larger than during its ’08 counterpart was Q1’09 with €33.9 million invested

• Q4’09 saw a slight elevation in investment activity by number of investments made


Q1'08 Q2'08 Q3'08 Q4'08 Q1'09 Q2'09 Q3'09 Q4'09 - €

10,000,000 € 20,000,000 € 30,000,000 € 40,000,000 € 50,000,000 € 60,000,000 €

051015202530

€ #

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Average Investment by Quarter

• While the number of investments made in 2009 declined from the previous year’s figures, the average size of investments grew in Q1’09 and Q2’09

• If WinWind’s €120 million investment is excluded, Q3’09 was also higher than Q3’08

• Excluding Blyk’s round in Q4’09, also Q4’09 would have a higher average round size than its counterpart


Q1'08 Q2'08 Q3'08 Q4'08 Q1'09 Q2'09 Q3'09 Q4'09 - €

500,000 €

1,000,000 €

1,500,000 €

2,000,000 €

2,500,000 €

3,000,000 €

0

5

10

15

20

25

30€ #

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Quarterly Investments by Industry• The distribution of investments temporally

over 2009 has been rather erratic within industries

• Q1’09 was active in all industries except in hardware & semiconductors

• Q3’09 was especially good for nanotechnology industry with Heptagon closing its second round with €15 million

• In Q4’09 the cleantech, hardware & semiconductors, and software industries received funding quite evenly


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Quarterly Investments by Industry


- €

5,000,000 €

10,000,000 €

15,000,000 €

20,000,000 €

25,000,000 €

30,000,000 €

35,000,000 €

2009 Q4 Q3

Q2 Q1

- $

5,000,000 $

10,000,000 $

15,000,000 $

20,000,000 $

25,000,000 $

30,000,000 $

35,000,000 $

2008 Q4 Q3Q2 Q1

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Trends for 2010

• While the amount of venture capital activity clearly declined in Finland, it mirrors what happened in the world’s major venture capital markets

• According to most sources, venture investing activity declined on the order of 30% in the USA, Europe and Israel, with both Euro amounts and number of deals suffering.

• However, as Dow Jones reports, Q4 in the USA showed a rebound, so the question is, will Europe (and Finland!) follow suit, since the USA usually is a leading indicator for Europe.


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Trends for 2010

• Megadeals– In general all HUGE visions will need an “Aha!” type investment (or customer’s

relationship even better) to put them on the global stage. • New VC funds announced

– Last year we saw some new VC funds announced, and very much more will come this year, in particular in the form of existing VCs getting new funds targeted at early and expansion investments

• VIGOs– The new government-sponsored program is now fully formed and six good teams are in

place. We are seeing the first announcements of their participation in seed and first round funding, and hope to see that continue.

• Exits– 2009 saw the announcement of ZERO significant exits. 2010 must start to see more.

Valimo being acquired by Gemalto was a good start, but many more are necessary to prove the VC market in Finland is capable of generating great returns for limited partners.

• International Investment– As reported earlier, there was a big reduction of international VC money flowing into

Finland. This must change, fast! Scope Capital’s 7m Euro investment into Footbalance is a good start there


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technopolis online annual report 2009

Economy & Finance

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