The programme will temporarily expand Tesi’s investment focus and give start-up companies more time for larger scale fundraising.
State-owned investment company Tesi is launching the Venture Bridge investment programme for Finnish tech companies pursuing international growth and larger scale fundraising. Due to COVID-19, international investors are likely to some extent scale back their record volumes of investment activity in Finland. Tesi will mitigate this market bottleneck with bridge financing to give companies more time and resources for raising larger financing rounds. Investments through the Venture Bridge programme will be made alongside and on equal terms with professional VC investors.
"COVID-19 is impacting Finnish growth companies not only through their business operations and growth prospects, but also through the reduced availability of financing as international investors and corporate venture capitalists are likely to scale back their activities in the market. These investors have played a major role in recent years in scaling Finnish companies towards global operations,” says Tesi’s Juha Lehtola, Director, Venture Capital.
The Venture Bridge programme will focus on technology companies that have earlier raised at least seed financing from VC investors and whose subsequent fundraising plans are being delayed due to COVID-19. Investments will be made as convertible loans that will be converted into shares in the next investment round. In this way companies can raise funding more quickly than would be possible through equity investments. Tesi’s investments through the programme will be €0.25m – €2.0m in size. The Venture Bridge programme will be launched on 17 June 2020. Prior to this, Tesi will publish more information about the programme on its website.
The Venture Bridge programme will supplement Tesi’s direct VC investments and temporarily expand Tesi’s investment focus to an earlier stage than normally. Alongside the Venture Bridge programme, Tesi will increase its investment volumes in later-stage VC rounds utilising, for instance, the EFSI investment mechanism agreed between the European Investment Bank and Tesi.
“It’s of vital importance for Finland’s future employment and competitiveness that the country still has innovative and ambitious growth companies after the crisis. In addition to the Venture Bridge programme for early-stage companies, we’re prepared to substantially increase the volume in later-stage investment rounds aimed at the international scaling of business operations. These measures will enhance the prospects of Finnish companies becoming global leaders in their field,” adds Lehtola.
The Finnish government’s supplementary budget on 2 June 2020 allocated €250 million to recapitalise Tesi. The additional capital will be channelled flexibly, according to the market situation, into venture capital investments, stabilisation financing programme and investments in funds over the next two years to mitigate the market disruption caused by COVID-19.
Juha Lehtola, Director, Venture Capital
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Tesi (Finnish Industry Investment Ltd) is a state-owned investment company that wants to raise Finland to the front ranks of renewed economic growth by investing in funds and directly in companies. We invest profitably and responsibly, together with co-investors, to create the world’s new success stories. Our investments under management total 1.3 billion euros. Ambition for ownership and success – www.tesi.fi | www.dtg.tesi.fi | @TesiFII