Butterfly Venture Fund III starts investing, two new American partners join in

Butterfly Ventures starts investing today from the new Butterfly Venture Fund III. The target size of the fund is 24 million euro. The fund focuses on hardware and deep tech companies whose business is built around unique, often protected and hard to reproduce technology. Butterfly Ventures is joining forces with US and Sweden based Capital A Partners (CAP A) for the new fund.

One of the focus areas of the fund is research based innovation and co-operation with universities that Butterfly Ventures has established relationships with. The fund is particularly interested in seed stage companies with high growth potential. While most of the target companies will be from Finland, the fund will also invest elsewhere in the Nordics and the Baltics.

The expansion of operations brings into the new fund two American partners from CAP A, Tanya Marvin-Horowitz, based in Stockholm, and David Mendez, based in the United States. One of portfolio companies in CAP A’s Fund I, Svenska Aerogel, listed in December 2016 to the Stockholm First North. CAP A is also a co-investor alongside Butterfly Ventures in portfolio company, Conexbird.

“We are so excited to be working with such a successful and experienced Butterfly team as we embark on our first Nordic-based fund. CAP A has made investments in the Nordics since 2013; however, our partnership with Butterfly establishes a more substantial presence here and provides more resources to help build our portfolio companies into successful global enterprises.” states Tanya Marvin-Horowitz, Managing Partner at CAP A.

With the new fund, the Butterfly Ventures team will have nearly 40 million euro under management. To date, Butterfly Ventures has invested in 40 portfolio companies and in the light of Finnish Venture Capital Association (FVCA) statistics it has had roughly 15% – 20% market share of all the early stage first time investment rounds invested by venture capital funds in Finland. In addition, CAP A has invested in 18 portfolio companies, 7 of which are Nordic based.

“Butterfly Ventures was the first VC we spoke with. The co-operation started a year and half before the seed investment round. When we needed the funding, everything worked out really fast. It was particularly important for us, that in addition to funding, we got on board a VC who we trusted and with whom the co-operation was working really well.”, noted Toni Linden, the CEO of KNL Networks.

“The help we’ve gotten, particularly immediately after the first investment round has been invaluable. The co-operation with Butterfly Ventures has always been fruitful, constructive and such that it supports the entrepreneur. Whenever I have asked, they have helped us. Therefore, it’s very easy to recommend Butterfly Ventures to my fellow entrepreneurs.”, says Aki Soudunsaari, the CEO of Naava.

A significant portion of Butterfly Ventures’ current portfolio companies deal with deep tech and hardware, such as KNL Networks, Optiwatti, Naava, Valossa, Sarokal Test Systems, Conexbird, Sapotech and Asmo Solutions.

”Of our existing portfolio, those companies who have had a hardware component have developed faster than others. This can be seen both in their revenues as well as valuation. Furthermore, many of our most interesting companies, for instance KNL Networks and Valossa, have research based roots. It’s natural that the focus of the new fund is steered towards this direction.”, states Juho Risku, Partner of Butterfly Ventures.

”The fact that Finland has very good hardware knowledge explains part of it. During the last few years, hardware development has become easier and more cost efficient. We also believe that one of our key success factors has been the very conscious, open and constructive co-operation with our portfolio companies. We have a good reputation and we get plenty of leads through the entrepreneurs of our existing portfolio companies.”, adds Ville Heikkinen, Partner of Butterfly Ventures.

Initial investors of Butterfly Venture Fund III include Tekes Venture Capital Ltd, Elo Mutual Pension Insurance Company, Fennia Mutual Insurance Company, Tradeka-invest Ltd, AI-Partners Ltd, LocalTapiola Pohjoinen Mutual Insurance Company and Gerako Ltd. The fund may accept additional investors until the final closing.

”We haven’t invested in such an early stage venture funds before, but the focus area of the new Butterfly Ventures’ fund along with the versatility of the team and the success of their earlier investments convinced us. We have researched several funds and this was suitable for Fennia’s investment portfolio.”, says Eero Eriksson, Deputy Managing Director of Fennia.

This first closing of the fund is nearly 13 million euro. The final closing of the fund will be done during 2017 and the size will be capped at 24 million euro.

”The rapid start with professional investors who have plenty of experience of investing into venture capital funds tells that we’re trusted. Naturally, the significant commitments of large institutional investors and Tekes Venture Capital are a good sign.”, explains the CEO of Butterfly Ventures, Matti Kanninen, “The success of our portfolio companies has helped also; for example, KNL Networks’ 9 million Series A round, which was one of the largest A rounds in 2016 in Scandinavia, and crowd funding of Asmo Solutions, which was closed just in two days, faster than any other over million crowd funding campaign in Finland. The fresh triple victory of Optiwatti at the nationwide Kasvu Open could also be mentioned.”

Enquiries and additional information

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

Resources

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Bill Reichert in Oulu

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Two day startup workshop just about to begin. Ville Heikkinen discussing with Bill Reichert (Garage Technology Ventures)

Business Oulu organized a two day workshop 22.-23.3. together with Takomo and Upswing. We had a pleasure to work along with such people as Bill Reichert (Garage Technology Ventures), Tero Ojanperä (Vision+), Joakim Achrén (My Next Games Company), Juuso Nissilä (Valkee), Harry Santamäki (KoppiCatch) and several others.

The first day went through with presentations, there were also a panel and finally a FIBAN event. During the second day one of our partners Juho Risku and Bill Reichert from Garage Technology Ventures coached startups in pitching. It was great to see such long term startup professional in work, truly great insight. However, even better was the fact that the quality of pitches has improved, not just by my opinion but also according to Bill.

Socializing Friday at Business Kitchen

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Juho Risku 22.3. talking at Socializing Friday event at Business Kitchen. The other two in yellow shirts are: Janne Salmi one of the Socializing Friday team members in middle and lean entrepreneur Ola Sundell on right.

Juho took part at interesting opening discussion at Socializing Friday. Ola said that he’s is still looking for the barber shop offering coffee while getting his hair cut and we were asked if Butterfly would finance in barber shop offering coffee also. Antti told other participants to look at us and guess if we would be interested in such business (we are almost bold and Juho is known to shave his own head). Juho said that we could consider investing in a new service business opportunity for somebody to serve coffee to all customers of any barber shop. So if not money from us, then at least new ideas. 🙂 But more seriously we again had some very interesting conversations with potential tech investment targets. Thanks for the Socializing Friday team for the opportunity to be there. Oulu rocks!

Building bridges

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Silicon Valley with Mikkel Svane

Juho Risku discussing with Mikkel Svane the CEO of Zendesk in Silicon Valley. Zendesk had just closed $60 million round.

One of our key ideas is to actively build such bridge ends that will ease up the market entry of our portfolio companies. Our trip to Silicon Valley was very productive. In addition to number of VC funds and accelerators we met entrepreneurs, such as Mikkel Svane from Zendesk. Zendesk btw. is an excellent example of a modern startup which has built their business around the customer centric idea of creating a great product above anything else.

Butterfly Ventures selected to establish Northern Startup Fund

The City of Oulu has selected Butterfly Ventures to manage the Northern Startup Fund that will be established in Oulu. The fund will invest in startup companies that have operations within Oulu region. The goal is to gather approximately 35 million euro of investment capital. The Northern Startup Fund is the first so called asymmetric fund in Finland. The fund intends to make its first investments already before the end of 2012.

“Asymmetric model is particularly interesting from the private investors’ point of view.” said Matti Kanninen, managing partner of Butterfly Ventures “In asymmetric model the private investor has preference over the public financier, which benefits in any case in a form of tax income. The private investor is preferred both in return of the invested capital as well as in distribution of the profits”, he added.

The new fund will significantly improve the startup ecosystem in northern Finland. In addition to capital, Butterfly Ventures will bring in plenty of required knowledge and networks. The management company will also reshape some of the operation models in the industry. One of its goals is to bring the world famous “Techstars” –type of model into Finland.

“Our goal was to bring in the best possible team that can operate both in Oulu as well as internationally with ease.” said Ville Heikkinen from Business Oulu “We selected Butterfly Ventures because they combined the regional dimension with the first class IPO seen serial entrepreneur experience and deep understanding of venture capital industry”, he added.

The fund will start its active operations early fall. At first the fund capitalization will be roughly 10 million euro, half of which comes from the City of Oulu. The other half will be gathered from private investors. In second phase, during 2014, the fund capitalization will be expanded into 35 million euro. Negotiations with the private investors will be finalized during the summer and fall. Butterfly Ventures will also organize a fund related information event for the interested investors and startup companies by the end of August in Oulu.

Enquiries and more 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

Resources

Download PDF: EN, FI