Four new investments by Butterfly Ventures – Strong portfolio presence in Slush

Four of Butterfly’s portfolio companies have been selected to appear among the best companies at Slush. Connexbird, Fourdeg and NaturVention were selected into TOP100 early stage companies list and Kyynel into TOP50 growth companies list. Meanwhile, Butterfly has been active also on the investment front. The new investments are Ceruus, Augumenta, Alpakka Media and Asmo Charger.

”It was nice to notice that four of our portfolio companies were selected among the best of Slush. Selection is a real achievement as selections were made from a group of over thousand international startups and only 10% of them are among this elite group.” tells Juho Risku, who leads the startup development at Butterfly, ”Our portfolio seems to be performing a lot better than average also from this respect, as half of our portfolio companies who were available for selection were also picked.”

Butterfly has invested so far 2.7 million euro in investment rounds totaling up to 7.2 million euro. In less than two years Butterfly has found 21 companies into its portfolio and completed over 41 investment rounds into those companies. Companies have been selected from the analyzed 500 companies, out of which 25% have been looked at more closely as investment targets. During the first half of 2014 every seventh early stage venture capital investment in Finland were Butterfly’s.

”Our portfolio has been growing even a bit faster than expected. In a short period of time we have been able to achieve a significant position within the early stage venture capital in Finland.” says CEO of Butterfly Ventures, Matti Kanninen, ”I am most delighted that more and more often the founder team has consciously wanted us in particular as their investor and coaching partner. It is thus likely that by the end of the year the number of our portfolio companies will grow further by at least two or three companies.”

Enquiries and additional information:

Matti Kanninen, managing partner
Phone: +358 (40) 5455877
Email: matti@butterfly.vc

Butterfly Ventures

Butterfly Ventures is an early stage focused startup development and venture fund management company located in Oulu, Finland. Behind the company are Matti Kanninen, Ville Heikkinen and Juho Risku as well as Board members Antti Kosunen, Jukka Mäkinen and Jari Pasanen. Butterfly Ventures has offices in Oulu and Helsinki.

Web: http://butterfly.vc

Northern Startup Funds – Leverage from the EU

Northern Startup Fund is a venture capital fund managed by Butterfly Ventures that invests into early stage startups. It is the first asymmetric fund in Finland. In the case of Northern Startup Funds the asymmetry means that the public investor, which benefits also in a form of tax income, lowers the risk of a private investor by offering a possibility for returning the invested capital and profit share before the public investor. From the private investors’ point of view this improves the risk – return expectation ratio significantly. The public investors in the Northern Startup Funds are the City of Oulu and the European Regional Development Fund (the Northern Ostrobothnia Centre for Economic Development, the European Union). The investment capital of Northern Startup Fund is at the moment 10 million euro.

Resources

Download PDF: EN, FI

The investment volume of Butterfly Ventures tripled from last year

Butterfly Ventures continues investment activities at a high pace. During the first half of 2014 its total investment volume tripled. Butterfly has now invested, together with its co-investors, 6M euro in total. Compared to the whole year 2013, the growth is more than 4.5M euro. New portfolio companies during the first half of 2014 are: Realsource, Naturvention, Sapotech, Sarokal Test Systems, Pint Please and Kyynel. One of the cases will remain un-published at this stage.

”We have reached a good pace in our investment activities. Our efficiency is based on the due diligence investment model we’ve developed. It allows us to invest into startups with high return expectations swiftly and cost-efficiently already very early on. It also mitigates the risks associated with a single investee company.” says CEO of Butterfly Ventures, Matti Kanninen, “The quality of startups in our dealflow has been a positive surprise. I trust we can further increase our investment volume next year. The progress of our portfolio companies also creates opportunities for follow-on investments including larger rounds. We will make additional 4-5 first time investments as well as several follow-on investments into our portfolio before the end of this year. Our own investment volume thereby increases to some three million euro.”

Currently, the portfolio of Butterfly consists of 17 companies. They have been selected from the analyzed 450 companies, out of which 25% have been looked at more closely as investment targets. At the time of Butterfly’s first investment, 20% of the portfolio companies had revenue. Approximately 6 months thereafter, roughly 80% of them had revenue. Butterfly’s portfolio companies employ approximately 100 people in total.

”The due diligence investment model has worked very well, so far there hasn’t been any really serious setbacks. Of course some of those are expected as well. Otherwise we would probably have taken too little risk.” says Juho Risku, who leads the startup development at Butterfly, “We are actively discussing with international investors and it seems that our portfolio companies gather also wider interest. In some cases we already have to even think who will fit into investment round.”

Enquiries and additional information

Matti Kanninen, managing partner
Phone: +358 (40) 5455877
Email: matti@butterfly.vc

Butterfly Ventures

Butterfly Ventures is an early stage focused startup development and venture fund management company located in Oulu, Finland. Behind the company are Matti Kanninen, Ville Heikkinen and Juho Risku as well as Board members Antti Kosunen, Jukka Mäkinen and Jari Pasanen. Butterfly Ventures has offices in Oulu and Helsinki.

Web: http://butterfly.vc

Northern Startup Funds – Leverage from the EU

Northern Startup Fund is a venture capital fund managed by Butterfly Ventures that invests into early stage startups. It is the first asymmetric fund in Finland. In the case of Northern Startup Funds the asymmetry means that the public investor, which benefits also in a form of tax income, lowers the risk of a private investor by offering a possibility for returning the invested capital and profit share before the public investor. From the private investors’ point of view this improves the risk – return expectation ratio significantly. The public investors in the Northern Startup Funds are the City of Oulu and the European Regional Development Fund (the Northern Ostrobothnia Centre for Economic Development, the European Union). The investment capital of Northern Startup Fund is at the moment 10 million euro.

Resources

Download PDF: EN, FI

Ten new investments in year 2013, equity under management grows into ten million euro

Butterfly Ventures continues investment activities at high pace. During its first year of operations 2013 it has completed its own target of ten new first time investments. The newest investments are: CreateTrips, Laturi Corporation and Conexbird. Furthermore, with the agreement signed today Butterfly Ventures has increased the amount of equity under management by five million euro, totaling now ten million euro.

“Butterfly has started really well also from the City of Oulu’s point of view. The investments have been made in particular into early stage startups, and the positive effects of Northern Startup Fund are already evident.” told Juha Ala-Mursula from Business Oulu. “At the time of investment two of the startups had revenue, now eight of them have. Also the fact that the number of employees after the investment in these companies has already increased nearly 30% is great news for Oulu.” he added.

Based on the actual realized figures, the fund size of ten million euro adds up to some twenty million euro worth of equity financing in total.

”We’re very happy for the increase of funds under our management at this particular moment, as the prospects for new first time investments are great. This is good news also for our portfolio companies. Several of them are approaching a stage where their business model has been validated and therefore follow-on investments are becoming current. Butterfly is now better equipped to support its portfolio companies through this rapid growth phase, which brings stability for the companies and further accelerates their growth.” said Matti Kanninen, CEO of Butterfly Ventures.

So far, Butterfly has invested together with other investors in total of 1.4M euro into ten portfolio companies. Of this amount Butterfly has invested 600 000 euro. In addition to local investors, also US angel investors have participated in the financing rounds. The portfolio companies were selected from the deal flow of 300 companies. Butterfly aims to do ten new first time investments also during 2014. In addition, the annual volume of investments is planned to grow into 1-3 million euro.

Enquiries and additional information

Matti Kanninen, managing partner
Phone: +358 (40) 5455877
Email: matti@butterfly.vc

Butterfly Ventures

Butterfly Ventures is an early stage focused startup development and venture fund management company located in Oulu, Finland. Behind the company are Matti Kanninen, Antti Kosunen and Juho Risku as well as Board members Jukka Mäkinen and Jari Pasanen. Butterfly Ventures has offices in Oulu and Helsinki.

Web: http://butterfly.vc

Northern Startup Funds – Leverage from the EU

Northern Startup Fund is a venture capital fund managed by Butterfly Ventures that invests into early stage startups. It is the first asymmetric fund in Finland. In the case of Northern Startup Funds the asymmetry means that the public investor, which benefits also in a form of tax income, lowers the risk of a private investor by offering a possibility for returning the invested capital and profit share before the public investor. From the private investors’ point of view this improves the risk – return expectation ratio significantly. The public investors in the Northern Startup Funds are the City of Oulu and the European Regional Development Fund (the Northern Ostrobothnia Centre for Economic Development, the European Union). The investment capital of Northern Startup Fund is at the moment 10 million euro.

Resources

Download PDF: EN, FI

Why early stage in Oulu right now?

It’s been frequently said that on going deacade is the decade of early stage venture financing. For instance according to Mark Suster the upcommign decade is “one of the best and most rational investment periods”. While there’s several factors contributing to this view, probably the most important reasons is the technological rupture that has made initial stages of startups cheaper and therefore investing into early stages more attractive.

Oulu is one of the leading technological hubs, especially when it comes to innovation. For instance, in 2011 the Foundation for Finnish Inventions received >1.2 submissions / 1000 people from Oulu region. That is about twice the ratio of Helsinki region. Overall Finland has a higher rate of annually granted patents to population than the US for instance, and Oulu, in terms of density, spots out like a Silicon Valley there. Indeed Fortune Magazine selected Oulu as one of the 7 best new global cities for startups. Still venture investments in the province of Oulu are <10 € per capita. This is significantly less than in Helsinki (>20 €) or primary competitors (Sweden >12 €, Great Britain >20 €, US >70 €), let alone in Israel (>150 €) or Silicon Valley (>1000 €)*. The same type of trend can be seen in the GDP venture investment ratio. In practice this means that startups in Oulu are somewhat underfunded and one gets to select better startups with reasonable valuations there.

At the same time there has been huge transformation in the employment markets of Oulu, which has improved the startups’ ability to recruit the best. Nokia and its subcontractors have released significant amount of talent and they don’t recruit full cohorts from university as they used to. A career as a founder of a startup is a very viable option right now. As Oulu is eligible for EU regional aid, for instance TEKES NIY funding maximum is 1.25M€ instead of normal 1M€. In addition Oulu has invested heavily into services and infrastructure required by the startups.

All these factors make the Oulu region a very attractive option for an early stage venture capital fund like ours right now.

* Finland figures from FVCA, Sweden and UK from EVCA, US, Israel and Silicon Valey from several other sources. Figures aren’t conclusive, but give a direction of where each area stands.