A forum to match Finnish high-tech companies with Chinese investors exceeded expectations.
Young Finnish companies are eagerly looking to China, not only for its large and dynamic market, but also as a source of funding. Likewise, Chinese investors have recently been given more freedom to invest abroad. The two trends have intersected in a concerted effort to match Chinese investors with Finnish companies.
“The activity really began to increase in the spring,” says Marika Mäkelä from China Finland Golden Bridge. “Previously, it was challenging and regulatory impossible to get this type of foreign direct investment from China, but their new Five Year Plan really opened up the possibilities for Chinese venture capitalists to invest overseas. They are also interested in doing joint ventures with other foreign investors.”
Not content with passively waiting for Chinese investors to express interest in local companies, a host of Finnish organisations decided to meet their Chinese counterparties and create a forum in Beijing. The idea was for Chinese venture capitalists (VCs) to get a chance to meet Finnish investors and young companies looking for funding. They chose clean technology as the theme, as Finland has a special strength in that sector and Chinese investors are interested in the future of that industry.
The China Finland VC Forum 2011 invited twenty Chinese venture capitalists and eleven Finnish firms. Organisers pre-screened the cleantech companies for the investors and set up one-on-one meetings. It met under the auspices of the Golden Bridge project.
“I really enjoyed the event and I was very impressed with the arrangements and audience,” says Christian Kolster, Managing Director of C&M Capital. “I feel it is very important for Finnish and Chinese businessmen to meet and get introduced through events like this. I have been to several before, but this was exceptionally well organised.”
C&M Capital is a Finnish venture capitalist that prefers to invest in young start-ups in a syndicate, so the forum was an excellent chance for the company to meet other Chinese investors with whom they might work in the future.
“We received several new contacts and potential investors, or venture capital partners, from the event and are hence pleased with the result,” continues Kolster. “We all realise this is a beginning and further contacts and meetings are important to grow and maintain these new relationships, but certainly the start was well received.”
Mäkelä says that she knows of four Finnish cleantech firms that are currently speaking to Chinese venture capitalists, as well as four investors from China who want to establish close collaboration with Golden Bridge to receive information on potential investment targets from Finland.
“We were positively surprised,” Mäkelä admits. “This was simply the beginning of the systematic operation to activate cross-border VC investment activities.”
A key to the good results achieved was the hard work of the organisers to pre-screen target companies from Finland and venture capitalists from China. The companies may be looking for specific types of funding – seed, first round or second round, for example – while the investors may be looking only for specific sizes of companies or firms in targeted industries. Making sure there is a potential match prior to the event saves everyone time and effort.
“We make sure that the companies participating are suitable,” Mäkelä explains. “They need to be relevant to the Chinese market. They have to have good technology. Finally, they have to be at the right growth stage, and readiness to take the VC money in is a prerequisite.”
Kolster concurs, saying that the work done prior to the meeting was crucial in making it a success.
“As a venture capitalist and consultant I appreciate it very much when organisers do their homework and profile the companies and investors so they match at least theoretically,” he says. “This, and the nice personal touch of the Golden Bridge Team, Marika Mäkelä, Marko Vänskä and Shi Ting Chen, was very good. I look forward to following events and more positive outcomes from the first event.”
Kolster may not have to wait long. Organisers plan for a second event to be held in Beijing in December, this time focusing on information and communication technology.
Text: DAVID J. CORD, Helsinki Times
Did you know?
Finland’s cleantech industry
- The industry expects 9.6% growth in 2011, about four times the rate of the Finnish economy.
- Turnover for the top 100 firms was €17.9 billion.
- Currently the big sector is energy efficiency.
- The industry thinks that major growth will come from renewable energy production, distribution and transmission.
- Water management and waste management are other sectors with big growth opportunities.
An assortment of Finnish cleantech companies
- Mzymes specialises in soil treatment.
- DigiEcoCity works in energy efficiency and sustainable communities.
- Peatec’s expertise is in recycling technology.
- Crystalsol has strengths in semiconductors and photovoltaics.
- PAC Solution concentrates on water technologies.
- MGH Systems has its niche in green IT and biomass.
- LightTherm has its sights set on energy efficiency and light emitting diodes.