From multinational corporations to hi-tech startups, Finland plays home to them all. Thanks to its strong economy that blends high industrialisation levels and a largely free market, supportive government policies, an extremely educated workforce, and a strong tech sector, Finland’s startup scene has grabbed the attention of almost everyone.
The emergence of Finland as the world’s preferred hub for startups and innovation hasn’t happened overnight. It happened gradually and steadily. In 2021, Finnish startups had a record year and raised a whopping €1.2 billion in venture capital.
Today, Finland continues to surge ahead by being one of the top destinations for entrepreneurs, innovators, and startups. The country has as many as ten unicorns, which refers to startups that have broken the threshold of one billion dollars. From Oura – the smart ring maker to Wolt – the innovative food delivery company, the Finnish startup scene has them all.
If you want to give wings to your entrepreneurial dreams while striking a work-life balance and plan to set up a startup in Finland, impressed by the land’s pro-entrepreneurship environment, it pays to know a bit more about the scenario before you make the final call. In addition, Finland is also home to some of the best executive search firms who can help find the right talent to lead your startup on its journey.
Even if you are an investor looking for profitable business opportunities, knowing more about Finland’s business-friendly environment will help in your decision-making process.
Reasons that Give an Edge to Finland’s Startup Scene
Entrepreneurship isn’t easy. However, the going becomes a lot easier when you have a supportive environment, easy access to funding, and can strike the right balance between working harder and smarter to live the dream life of an entrepreneur. As an investor, the promising Finnish startup scene breeds enthusiasm and confidence.
But what gives Finland an edge over others? Let’s examine.
1. A Promising Tech Scene
The country has a strong tech sector. The world got its first heart rate monitor from Finland. The land also gave the world the Nokia phones, Angry Birds, wind turbines, the web browser, SMS messaging, reflectors for walkers, saunas, and 5G technology, thus proving itself to be the leader in the start-up tech scene.
Be it fulfilling the unmet needs of modern clientele, finding solutions to address their pain points, or transforming big ideas into reality, everything is happening in Finland’s tech ecosystem. The conglomeration of creative minds buzzing with innovative ideas and the zeal to bring those ideas to life makes Finland the destination where big things are happening right now and even slated to happen within the next few years, we believe.
Whether you are an investor or entrepreneur, you need to be a part of it if you want the front-row seats to all interesting and innovative happenings in Finland’s tech startup scene.
2. Access to Venture Capital Funds in Finland
During the first half of 2022, Finnish startups raised €276 million in funding from venture capital investors. Of this amount, domestic investors contributed €159 million while €117 million came from foreign investors. The amount of €276 million makes 2022 the second-best half-year in Finland’s history.
Ten years ago, Finland had a few active domestic VC funds. Most of them were just beginning their operations. Fast forward to 2022 and you will notice the number of active funds has doubled with more entrants in the market. As a result, Finnish startups now have access to more growth capital.
It’s interesting to note that the capital raised by Finnish startups has increased 10X during the past ten years.
3. The Presence of Numerous Accelerators and Incubators
Whether you are looking to raise business capital or need mentorship for your startup, Finland’s startup accelerators and incubators have got your back. Apart from funding, they offer founders unmatched support for product development, marketing, and sales. From sector-agnostic startup accelerators and incubators in Finland like Kiuas, NewCo, and Red Brick to those like NordicXR Startups (in the VR and AR space), xEdu (EdTech), and Terkko (BioMed, Health Tech), you will get a lot to choose from.
From building your MVP and finding a co-founder to getting the seed money you need to scale up your business, you will get them all and much more from these accelerators and incubators.
4. Finland’s Welfare State Model
Thanks to Finland’s welfare state model, would-be entrepreneurs are provided with basic security, which lets them take the plunge and start their business without worrying about meeting their daily necessities.
In this country, your spouse’s dental care or your kids’ education isn’t tied to having a steady paycheque from some leading company. That’s a big relief for future entrepreneurs who can go out to make it big on their own without a hundred worries related to financial risks and hardships bogging them down.
5. A Welcoming Industry Ecosystem
Those still on the fence regarding setting up a startup in Finland can consider the country’s industry ecosystem that welcomes international collaboration and provides advanced testing (for 5G network technology and beyond, for instance) and research environments.
Finland is also showing the world how to move toward a zero-carbon future by accelerating the speed of its new innovations and even helping the ones requiring a scale-up. Additionally, the region is a leader when it comes to gender pay equality, which gives another impetus to set shop here to leverage the diverse talent available in Finland.
Finland has also taken a leading role in creating new business opportunities in various sectors by trying to address the challenges related to climate change mitigation, sustainability, and energy system transformation.
6. An Extremely Skilled Workforce
Finland’s education and skill development system is one of the most successful in the OECD countries. The share of its male students (68.9%) taking up master’s or equivalent programmes in STEM (Science, technology, engineering, and mathematics) is one of the biggest compared to other OECD nations and partner economies. However, the share of Finland’s female students (31.1%) taking up STEM programs is one of the smallest.
But there’s no denying that Finland gives entrepreneurs a comprehensive pool of talent, which when recruited, can support and even take the lead to drive innovation and growth. For investors too, easy access to this talent pool is great news.
Final Words
Finland welcomes startup founders, investors, and entrepreneurs, and gives them the ideal setting to grow and succeed with limitless potential, free from bureaucratic red tape and friction present in many other countries.
This land encourages and supports the creative rule-breakers and game-changers and doesn’t care about geographical boundaries and other barriers and bottlenecks. Perhaps all these factors, together with the ones mentioned above, make the Finland startup scene such an interesting space to be in.
What more will you add to the mix that you believe is driving the rapid growth in setting up start-ups in Finland and attracting investors to them?
This article was written by Sonali