Case: StealthCase

stealthcase-logo-12.4.2016Modern society is increasingly dependent on wireless communications. At the same time requirements for energy efficiency in construction have been constantly increasing. Unfortunately, energy efficient construction obstructs also the radio waves causing multitude of low signal ratio related problems. While these problems can be addressed, existing methods are expensive and most of the time they do not fit into existing processes within construction industry. StealthCase tackles the problem where it is born: in the walls. The problem is solved by applying and integrating antenna technologies into construction materials making materials reradiate signals efficiently through them. Unlike traditional solutions, the cost of market adaption of these integrated structures are minimal compared to the customer dissatisfaction or competing solutions.

Prior to Butterfly’s investment StealthCase had filed several patent applications, created proof of concepts that validate the technology as well as started the pilot negotiations with several construction industry players.

“We’ve been discussing of the problem for several years. When Juha, one of the founders, presented the initial solution we instantly understood that we had something special at our hands. As our IPR portfolio expanded, it was clear that an investor was needed. Butterfly has proven to be an excellent partner with low bureaucracy, direct and open interaction and excellent advices in marketing, business model and strategy. We look forward on expanding our business with Butterfly.” (Janne Mansikkamäki, CEO of StealthCase)

Butterfly invested into StealthCase because of their elegant, cost efficient solution to clearly identified need driven by market trend, i.e. energy efficient construction. Every new and renovated building needs their technology. Furthermore, they have secured the core IP and have an agile, well executing team with plenty of experience required for this type of products. Butterfly’s investment will be used to expand the IPRs, finalizing the first product and getting the first few pilot customers.

Case: Kyynel

Gold_ball_hiresKyynel will change the way data is being transferred in remote areas. They are able to provide global coverage and offer similar or better quality of service than satellite communication does, without the cost of operating satellites. Kyynel’s solution requires only a low-cost radio system to provide global connectivity. This bestows huge value for e.g. shipping industry, which is currently heavily dependent on satellites. The satellite data communications is an industry worth of billions. Kyynel’s market opportunity lies in taking over the vast majority of it.

Kyynel provides state of the art high frequency terrestrial data communications system to replace the satellite data.

Kyynel provides state of the art high frequency terrestrial data communications system to replace the satellite data.

Prior to Butterfly’s investment Kyynel has developed and protected a huge technology base around the field necessary for the service. They also have developed the initial product versions required and secured a couple of significant pilot customers.

“Early days of radio relied mainly on longer wavelengths which allow to cover longer distances. However, there have been several data density and reliability issues when transferring data using traditional radio systems, making most commercial users change to satcom and other systems. In Kyynel we have been able to solve the usability problems of traditional radio systems, making it possible to offer a global connectivity that is reliable, secure and always online. We have been discussing with Butterfly for over a year and have strong confidence in their ability to help while going international. Now that it’s time to launch we felt it was also the right time to take them on board to help to do it successfully”, (Toni Lindén, CEO of Kyynel)

Butterfly invested into Kyynel because of the unique market opportunity and Kyynel’s extraordinarily deep knowledge of the field. In addition there is a strong IPR portfolio, existing industry with ongoing budgets, business model with a steep monetization curve and technology that allows to go around most critical mass challenges faced by other similar exercises. Butterfly’s investment will be used for further development of the commercial product, launching the service and securing the first few international customers.

Case: NaturVention

NaturVention logoNaturVention has developed a fully automated living green wall that cleans the indoor air from multitude of harmful substances exactly the way nature does, by using living plants. Even more so, they’ve come up a way to make the process 100 fold more efficient. Furthermore the system naturalizes indoor air breaking harmful chemicals, increasing the amount of natural chemicals and oxygen in the air and ensuring healthier humidity levels. By doing this they have been able to eliminate many of the indoor air quality related problems, for instance reducing sick leaves in many occasions, not to mention the improved quality of life for people involved. The market opportunity is simply put huge, there are billions of people suffering of bad quality indoor air on daily bases, especially in Asia.

Greenwall in a lobby

Greenwall naturalizes the indoor air using living plants. It does it by breaking harmful chemicals, increasing the amount of natural chemicals and oxygen in the air and ensuring healthier humidity levels.

Prior to Butterfly’s investment NaturVention had developed the first product with over 98 % test to purchase conversion and >500k€ worth of revenue. Their customer base is very satisfied. They had also filed international patent application for the key parts of the technology involved.

“According to WHO unhealthy indoor air is one of the biggest health challenges of the world today. While the original idea of plants purifying air in enclosed ecosystems is based on NASAs research from 1970s, we took the initial ideas to the next level, and were able to solve a bunch of technological challenges that made the actual active green wall possible. We wanted Butterfly along, as they have great international networks, action-oriented way of operating as well as plenty of needed knowledge of scale-up and marketing. Furthermore they had an excellent reputation among their portfolio companies.” (Aki Soudunsaari, Co-Founder & COO of Naturvention)

Butterfly invested into NaturVention because of their ability to solve a problem with huge, tens of billions, market opportunity. The team has done excellent job while addressing many of the challenges related into such complex product combining living plants, mechanics, hardware and software as well securing the first satisfied customers. Furthermore Butterfly saw a clear opportunity to bring in added value to the case in the areas of marketing, market requirements, business models and international networks. Butterfly’s investment will be used for releasing a more scalable product version, as well as preparing for international scale-up.

Case: Sapotech

Sapotech logoMonitoring super-hot processes, like casting steel, has traditionally been problematic. Due the extreme heat and constant motion one cannot actually see what’s happening inside the processes and traditional camera-systems just can’t take it either. Yet whenever there’s a problem undetected it may cost hundreds of thousands or even millions to a steel mill. Sapotech has invented a laser based imaging solution that allows one to see with unprecedented detail into hot processes. More importantly, due their novel hardware, industrial internet software platform and SAAS -based business model, they’re able to install the system as well as prove the value for the steel mill within days. The approach makes sales cycles extremely short. It’s revolutionary concept in traditionally slow moving industrial automation industry.

Reveal Cast screen capture

The SAAS based software platform provides excellent ease of use for operator. It makes it easy to identify the defects and react early on when ever needed.

Prior to Butterfly’s investment Sapotech had launched their first product, secured multiple pilot customers in the Nordics and several hundred thousands of revenue, as well as filed patent applications for the key technologies.

“For some reason industrial automation and modern service based business models generally haven’t yet met. We’ve been able to marry a few things, unique hardware, our own industrial internet software platform and steel industry expertise into a world class service offering. These ingredients allow us to execute a rapid scale-up into a market that’s worth of billions. Butterfly brings in not just money now and networks needed for follow-on financing later, but also business model expertise, knowledge of IPRs and experience on scaling up businesses internationally. Their support while facing the challenges of ramping up global service business is truly valuable.” (Saku Kaukonen, CEO of Sapotech)

Butterfly invested into Sapotech because of proven customer traction and industry disruptive business model with market potential of billions. The product is mature, fast to deploy and provides instant value to the customer. Furthermore the founder team has very deep knowledge and networks within steel industry as well as rare combination of expertise required; industrial internet, machine vision and user experience. Butterfly’s investment will be used to further confirm the business model, ramping up the customer acquisition as well as developing follow-on products that leverage the existing software platform.

Case: NWG Tools

NWG Tools logoTiling in construction sites is traditionally labor intensive and requires plenty of manual work. NWGTools has invented a patent pending method that will improve the efficiency of tiling by 20-150%. As the construction business is heavily competed and margins of subcontractors low the efficiency increase means over 200% increase in the margin of an average tiling contract. With such market dynamics there’s no one who could afford not to use NWGs method once it’s launched. That’s a real revolution in the tiling.

A-tile makes tiling over 100% more efficient than using traditional methods. That's several hundred percent increase in margin of a tiling contractor.

A-tile makes tiling over 100% more efficient than using traditional methods. That’s several hundred percent increase in margin of a tiling contractor.

So far NWGTools has built a proof of concept product which has been able to prove the efficiency increase in a real construction site on a real tiling contract.

”At first we were contemplating between traditional angel investor and Butterfly Ventures. Fairly soon it became evident however, that Butterfly, due to their experience and business knowledge, would be a superior partner – also for the longer run. The benefits were clear. Already before the investment Butterfly helped us to develop an excellent way to protect our business and intellectual property rights.” (Sami Jussinniemi, CEO of NWGTools)

Butterfly invested into NWGTools because the value proposition is exceptionally clear and simple. NWGTools has found a really neat way to patent the key technology and unlike most cases it seems to be both difficult to go around and easy to enforce. Furthermore the market potential for such product is several hundred millions. The team has excellent industry expertise as well as demonstrated commitment and capability of operating lean. Butterfly investment will be used to build the first commercial product version, further validate the value proposition with the customers and acquisition of key reference customers.

Butterfly Ventures Announces the First Investments

Butterfly Ventures announces the first investments of Northern Startup Fund into three innovative startups: FilmMe Group, NWG Tools and MyPose. The companies are all based in Oulu, Finland. With Butterfly Ventures investing in them, the companies will speed up their market-entry and accelerate their business growth.

The first investment rounds vary between approximately 100 000 and 200 000 euro, from which the Butterfly Ventures share varies from 40 000 to nearly 100 000 euro. In addition, parties have agreed on the milestone tied follow-on funding that may increase the total investment of Butterfly Ventures up to 500 000 euro per company.

We were contemplating between traditional angel investment and Butterfly at first. In the end, it was evident that Butterfly due to their experience and business knowledge would be an excellent partner – also for longer run”, said Sami Jussinniemi, CEO of NWG Tools “The benefits were clear, because Butterfly helped to develop an excellent way to protect our business and intellectual property rights already before the investment.”, he added.

The announced portfolio companies have been selected out of nearly 200 startups that were evaluated in the past six months. What these companies have in common is a sizeable market potential, appealing value proposition and business model, as well as, an excellent team. In the majority of target companies, there is also a real opportunity to protect the market position either using IPRs or the business model.

We are acting according to lean-ideology. In practice this means, for instance, that we also aim to test a certain concrete and relevant aspect of the business with the investment, such as, how the product will be spread virally.”, told Matti Kanninen, CEO of Butterfly Ventures “It is great that startups seem to highly value the help and support we can give them already during the evaluation process prior to the investment.”, he added.

In addition to the announced investments, Butterfly Ventures has several other cases under work to become investments in the near future. The majority of these companies are either in a seed or pre-seed stage. Butterfly Ventures will make first time investments in approximately ten new target companies per year.

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 Fund

Northern Startup Fund is a venture capital fund managed by Butterfly Ventures that invest into early stage startups. It is the first asymmetric fund in Finland. In the case of Northern Startup Fund 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 investment capital of Northern Startup Fund will be 10 million €, half of which comes from the City of Oulu and the other half from private investors.

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