Funding and Investment Finland & Helsinki

Overview funding (source: own draft)

The general investment climate towards games is active: games are seen as a competitive global industry largely due to some success stories. The investment community still lacks the understanding of gaming, but the situation is improving. Business Finland, the Finnish Funding agency, has been very effective in developing the game industry. There is very little cultural funding and majority of the VC funding comes from abroad, mainly from UK, USA and China. Availability of seed funding has been seen as a problem.

Public funding instruments for games (and other sectors)

Business Finland – The Finnish Funding Agency for Technology and Innovation (Ministry of Employment and Economic Affairs)

  • Who: companies (start-ups, SMEs), research organisations and public sector service providers
  • What: early stage for start-ups and development stage for SMEs, joint programmes and comprehensive services package that support innovation, growth and internationalisation as a whole, impact-boosting funding services for developing businesses’ competences and capabilities and support their growth into international markets, eligible costs: one salary and purchased professional services in accordance with the project plan, indirect personnel costs, purchased services, other costs will be accepted up to 20% of the sum of salary paid and purchased services
    Nature: grants / loans
  • Size & conditions: Normal cost estimate: if Business Finland’s share of funding is more than 100,000 €, Simple cost model: If Business Finland’s share of financing is less than 100,000 €
  • Geographical scope: national (FI)
  • Time scales: 2 months for decision making
  • Other: most important public funding agency for research funding in Finland, Every year, Business Finland finances some 1,500 business research and development projects, and almost 600 public researches projects at universities, research institutes and universities of applied sciences, supported projects: Frozenbyte, Small Giant Games, Everywear Games, Cuckoo Workout, Rival Games, Mindfield Games, Tunnel Ground

If the share of public funding is more than 50% and the project includes acquisitions, the initiator of the project must read the instructions on compliance with the Act on Public Contracts.
Games platforms: mobile, PlayStation 4, Nintendo Wii U, PC

Example: Thanks to Business Finland, Tempo funding a company can test the functionality of the business concept, obtain feedback from potential customers, explore demand in a new international market and rapidly implement the first demos or prototypes.

The maximum amount of Business Finland Tempo funding is 50,000 €. This funding covers 75% of the overall budget for the project. The company must have sufficient assets of its own for the project’s completion.
Conditions: The Tempo funding service is intended for startups that have been operating for under 5 years and are registered in Finland.

Funding for research and product development
Business Finland funds research and product development activities that enhance companies’ competitive advantages, services and business models, while speeding up the commercialisation of innovations. Business Finland funding also allows companies to gather information about target markets, to get feedback from potential clients and to ensure the demand for new solutions. The amount of funding depends on targets and resources. Business Finland funding is project-specific, and it evaluates how a project affects the attainment of growth objectives. Funding is not aimed to any specific industry but to all growth industries. However, Business Finland has some varying programs targeted to selected industries. The last game industry specific program was Skene 2012 – 2015. At the moment there is no game industry specific program.

Focus on small and medium-sized companies
A major part of Business Finland funding is directed at small and medium-sized companies. For larger companies, Business Finland funding is a great way to develop new business openings and to evolve together with smaller companies and research organisations. Business Finland offers funding for R&D work of research organisations and public operators, when it creates opportunities for new business and economic growth. Funding is available for companies operating in Finland.
Before a company submits a funding application and at the different stages of its growth path, Business Finland helps to identify the major bottlenecks for growth, and advise which Business Finland funding opportunities are most helpful in solving these issues.
At the beginning of a project, Business Finland offers coaching to help companies to reach the objectives set for the internationalisation process. In this phase, Business Finland typically connects companies to international network of professionals and private experts, which accelerates companies’ market activities.

Read more about Business Finland services for different stages in export growth:

Mediatonic Management is a project co-financing fund and management company. It focuses on Intellectual Property Rights (IPRs) of commercial games, multimedia products, TV formats, media brands from Finland and the Nordic region.

  • Who: Investments are targeted to projects creating new IP
  • What: Intellectual Property Rights (IPRs) of commercial games, multimedia products, TV formats, media brands, development stage
  • Nature: grant
  • Size & conditions: up to 500,000 €, partial funding. No fixed share of the budget, financing depends on the project size; Investment in the IPRs of the product instead of investment in the targeted company’s equity capital; Eligible criteria: the project is pre-commercialized and market-driven, with multi-channel opportunities and long term-revenue potential.
  • Geographical scope: Finland and the EU region
  • Time scales: 1-3 years

STEPDEMO (Finnish Ministry of Education and Culture/AVEK)

  • Who: Companies and associations (not individuals) under 29 years of age. Support is aimed to both music and games.
  • What: Small scale content support to demos and concepts
  • Nature: grant
  • Size & conditions: Demos max. 15,000 €, concepts max. 5,000 €; main criteria: participation / act of becoming employed of young people (less than 29 years), no other conditions
  • Geographical scope: national (FI)
  • Time scales: 1 call per year, about 2 months for decision making
  • Other: grant scheme was launched in 2017 as a test – but will possibly become permanent

DIGIDEMO (Finnish Ministry of Education and Culture/AVEK)

  • Who: companies and individuals working on innovative digital content including games demonstration and pilot support can only be granted to legally qualified companies that are registered before the expiration of the application deadline. Concept support can also be granted to a private individual, company or workgroup. The applicant is the person responsible for the task force.
  • What: Content development: demos and pilots for companies; concept support for individuals
  • Nature: grant
  • Size & conditions: Demos/pilots max. 30,000 €, concept support max. 5,000 €, max 60% of the mentioned costs can be supported. The support is de minimis support
  • Geographical scope: national (FI)
  • Time scales: 2 calls per year, about 2 months for decision making
  • Other: in contrast to STEPDEMO, scheme is a permanent structure

PLAYA GAME INDUSTRY HUB (as an example for regional schemes, usually organized by regional development agencies)

  • Who: companies, local / regional game industry ecosystems. Structural support and support e.g. to Trade missions
  • What: Business development, event participation, education of individuals working in companies, acceleration: coaching, development, finance, consulting; local community gatherings, investor relations & events
  • Nature: non-monetary support
  • Size & conditions: initiatives should look after business growth in the region and the development of local game ecosystem
  • Geographical scope: National/regional (FI)
  • Time scales: on demand basis, usually 1-3 months for decision making

Private equity funds with interest in video games

Reaktor Ventures helps seed stage companies become global leaders. The company founded in 2012 invests in the best seed stage companies and helps them create new markets and become global leaders in their industry.

  • Who: seed stage companies
  • What: Investment sectors: video games, mobile apps, online music, videos and books platform; Investment stage: seed stage; Games platforms: free games app for iPhone and iPad, PlayStation
  • Nature: private equity fund
  • Size & conditions: Investment size: from 500,000 € to 1 m €
  • Geogr. scope: Global
  • Time scales: n/a
  • Other: Supported games: Shark Punch, Two Men and a Dog, Sólfar Studios

IPR.VC is a private venture capital fund whose capital commitments at the start of operation have a total value of about 13 m €. Investors in the fund include pension institutions, family-owned investment companies, industrial investors, the Finnish government-owned Business Finland and the fund managers.

  • Who: early stage startups and SMEs
  • What: Investment sectors: TV formats and series, movies, animations, Internet contents and services, digital publications, games, music, design; Investment stage: early stage
  • Nature: private venture capital fund / loan
  • Size & conditions: Investment size: from 500,000 € to 1 m €; Investment conditions/tools:
    - Development loan: a small loan or equity investment to the target company for the development of a media content concept, manuscript and/or business model, developing the IP and building commercial deals and co-funding structure. If the target company lives up to the expectations, the fund can make a bigger investment. This kind of early-phase financing has not been available for content developers before.
    - GAP: GAP is mezzanine-type loan for ensuring the cash-flow of the production phase.
    - Equity-Stake: Most of the fund’s capital is invested with an equity-stake instrument.
    - Equity is investment in a target company’s equity and a stake is loan-based arrangement that gives the fund a share of the commercial rights of the target company’s project. Stake investment will bring royalty income for the fund
  • Geographical scope: Investment area: 85% of the Fund capital is invested in Finnish companies
  • Time scales: n/a
  • Other: Supported games: Tunnel Ground, Rival Games

Status: 01/2019

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