Finlanding: new opportunities for startups to enter the Finnish market
Winners and participants of the Finlanding nomination at past GoTech competitions have already taken the chance to enter Finland with their businesses. Their success is due to the cooperation with startup support institutions in the country, a new initiative to get a startup visa, and a great desire to scale the business.
Director of Invest-in projects at the Helsinki Center Vladimir Chepurnoy and senior adviser to the Helsinki Business Hub Maria Hartikainen talk about how finalists attracted the attention of the jury, what were their first steps, and what are the secrets of preparing for the competition this year.
- Please evaluate the results of the nomination in 2018. What were the differences between the current winners and those who won Finlanding in previous years?
Vladimir Chepurnoy. Over the years that we have been organizing Finlanding, we have already developed a certain image of its winner. This is, first of all, an ambitious project, which has had several years of work in Russia and a clear understanding of the further development of the company in the EU markets. Founders with business experience and investors with a vector of development in Western markets adds chances to win.
Each year sets of nominations are different, and it is difficult to compare them with each other. For example, we usually try to diversify the criteria, especially regarding the areas of company activity.
- The winners of 2018 were 4 projects: Eczo, Cyberlit, Hello Baby and Farmmarket. Have any of them already started working in Finland?
Maria Hartikainen. I would distinguish all the finalists, not just the winners. For example, iFarm is now successfully developing in Finland. Of last year’s final participants, they were as ready for global expansion as possible, and over the past time they have advanced farthest in their development. The guys raised another round of investments in February, went through the acceleration program at NewCo Helsinki in spring, and then opened an office in the Helsinki region working in European markets. Now they have found a platform for launching the first pilot project and, in general, are actively working on cooperation with major players. Throughout this time, we have been actively helping them, for example, doing road shows and advising on getting a startup visa.
If we talk about winning projects, then I’d note Cyberlit. Their clients are large industrial enterprises, the industry is quite hard, there are no quick solutions for cooperation with young companies. For the project, we organized meetings with potential partners and customers, and they generally had a very active year in Finland. But so far, they have not yet localized in the country.
As for the rest, they are less active, since everyone had different stages of development and financing. But in any case, we are ready to continue working with them if they wish to do so.
- Why did you choose these projects a year ago?
V.Ch. First of all, the winners attracted us with the degree of involvement of the guys in their business. Bright-eyed, motivated to develop and conquer new markets. The strongest common feature is the ability to think globally and never stop on what has been achieved. For the further growth and development of these projects in Finland, we are ready to provide the assistance of our partners - NewCo Helsinki (for young companies) and Helsinki Business Hub (for more mature companies).
M.H. Last year, more mature projects participated, which were ready to work not only in Russia, but also to enter European markets with quality products and solutions.
The companies represented quite different industries, while they responded to segments actively developing in the capital region. For example, Eczo deals with electrification of bicycles and other vehicles. Farmmarket market operates in the field of Digital Health, where Helsinki also has rather strong positions. As we know, the Scandinavian headquarters of such a world industry giant as Bayer is in Helsinki.
- How do the winners of the nomination of previous years (prior to 2018) develop?
V.CH. of the winners of 2017 - odgAssist (the new name of the company is Quality Drive) is actively trying to develop its business in Finland, although the project has a rather niche market. For example, this year they went through acceleration at NewCo Helsinki.
M.H. One of the first winners of the nomination - a St. Petersburg project Robbo - last year localized its business in Finland. Now the company's solution is present in more than 50 schools of the country. And surprisingly, after they began to successfully collaborate with Finnish schools, it became easier for them to promote their product in Russia. The company's management is actively looking at other markets, in particular, they participated in exhibitions in Germany and the Middle East.
- This year, a lot of areas have been highlighted in which you are looking for startups. What will you pay special attention to?
V.Ch. As always, we will note mature companies with a clear vector of development and a desire to work not only in Russia but also abroad. Of course, we look at turnover, revenue, team size, good command of English among the founders, background in large corporations.
M.H. In addition to the finished product or service that is competitive in the international market, you need motivation to go abroad, and the availability of resources (financial and human). As the experience of previous years shows, not all companies realize what is needed to internationalize their business. And even if we select them, they are not always ready to go to Finland and cannot take full advantage of our support. And the geographical distance to Finland is not the issue. We work with projects not only from St. Petersburg and Moscow, but also from Kazan, Novosibirsk, and other cities. Finland is an excellent springboard for access to Europe.
V.Ch. In the areas that are of interest to us, I can underline Smart City. The cities of Helsinki and Lahti have excellent opportunities for pilot projects with start-ups in this area, many city programs are launched here to implement mutually beneficial cooperation. In addition, the city of Lahti was chosen as the green capital of Europe in 2021.
We will pay serious attention to Life Science companies that can receive support from the Terkko Health Hub, a startup community based at the University of Helsinki. And for projects in the field of virtual and augmented reality, the Helsinki XR Center business incubator opens on September 5.
M.H. As for Helsinki, of course, we should also recall the gaming industry - many companies from this sphere begin their European expansion from Finland.
- About over a year ago, Finland introduced the practice of a startup visa. Do you know the results of this initiative? What other steps have been taken to develop the business climate in the country lately?
M.H. During this time, the number of applications from Russia exceeded the number of requests from all other countries. And the percentage of approval of applications from Russia is much higher than from startups from any other state. In second place, by the way, is China. This indicates the high readiness of Russian startups. Previously, there were still minor difficulties with the timing of issuing startup visas, but now some projects get it in one week.
V.Ch. Since July 1 of this year, Finland has abolished the mandatory presence of an authorized capital of 2,500 euros when registering joint-stock companies. For startups, this allows optimizing financial costs at the initial stage. In addition, there may be some delays in opening a bank account for foreign companies starting operations in Finland. These are internal issues of banks, and it is difficult to change something here. But now, in the absence of a mandatory requirement for the authorized capital, there is no risk of delaying the deadlines.
- What should participants especially pay attention to when filing an application this year? And what could be the main mistakes that should be avoided?
V.Ch. First of all, you should be aware of how much you need to Finland and why you want to go there. With the introduction of a startup visa, barriers and risks to exit were minimized, but the costs of doing business remain the same, so it is recommended to doublecheck if there are enough resources (both financial and human) to jump abroad. If all the indicators allow you to do this, then why not give it a try.
Do not forget to do your homework - prepare for a presentation in English, study the Finnish market, look what interesting opportunities there are for business development.
M.H. You shouldn’t be afraid to make mistakes; you should learn on them. You should evaluate your strengths and resources. If you are not ready, then it is better to leave your place to those who will use the results of victory in the nomination. Why win if you don't need it?
V.Ch. And, when you have already decided on the first step to enter Finland, then do not try to do everything yourself. There are support institutions for this. In Helsinki - NewCo Helsinki, Helsinki Business Hub, Business Finland, and in Lahti - Ladec.
Apply to Finlanding nomination at GoTech Contest page.