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 even if there is now some VC funding from Finland, the majority of it 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 €
    - 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.
  • 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
  • Game platforms: Mobile, PlayStation 4, Nintendo Wii U, PC

Example: Tempo Funding
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, but there is a specific program for entertainment business called Entertainment Finland.

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:

THE FINNISH CULTURAL FOUNDATION

  • Who: to Finnish nationals or those working in Finland: individuals, groups of people, registered organisations working with scientific or artistic work
  • What: Grant for artistic or scientific work like writing a book, making a game, conducting a scientific study. To apply artistic grant the work has to have artistic, cultural or social aims. Art grants are primarily for purposes of work, carrying out projects and acquisition costs. About 11-12 % of applicants receive funding yearly.
  • Nature: grants
  • Size & conditions: One-year working grant is 26 000 euros. Size and conditions differ on the basis of applicant (person/working group/a registered organisation)
  • Geographical scope: national (FI)
  • Time scales: Application period four times a year (January, March, August and October), and there are different funds to be applied during each of the periods (see more here). Decisions take about 3 months.
  • Supported projects: VR-game project about climate change, indie game project, Twelve Selves, Helmet
  • The Finnish Cultural Foundation introduced games as the field of its own to apply a grant in October 2018, games have been funded before that too.

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
  • DIGIDEMO is a permanent structure

EXAMPLE OF REGIONAL SCHEME: PLAYA GAME INDUSTRY HUB

  • 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

PLAY VENTURES
Play Ventures is the premium early stage VC fund investing into the most promising mobile and PC free-to-play game studios and games services startups. Fund was launched in December 2018 and it expects to make 8-10 new investments per year.

  • Who: early stage startups
  • What: investing to teams/studios, not projects. They invest in most promising mobile and PC free-to-play game studios and games services startups.
  • Nature: private venture capital fund
  • Size & conditions: Typical first investment into a new company from 500 000 $– 1 m $
  • Geographical scope: Global
  • Time scales: n/a
  • Supported game studios: Redhill Games, Mainframe Industries

SISU GAME VENTURES
Sisu Game Ventures is an exclusive advisory and investment company focused 100 % on games. It was set up in 2014. Sisu Game Ventures likes to invest in teams very early.

  • Who: early stage companies – preferably first money in (pre-revenue and most often pre-product).
  • What: investing in teams in Nordic region
  • Nature: investment company
  • Size & conditions: n/a
  • Geographical scope: Nordic region
  • Time scales: n/a
  • Supported game studios: eg. Kopla Games, Next Games, Small Giant

NORDIC GAME VENTURES
Nordic Game Ventures invests in unlisted early stage and expansion phase game sector SME companies in the Nordic region.

  • Who: unlisted early stage and expansion phased game sector SMEs
  • What: Nordic Game Ventures offers small capital, backed by a network of Nordic games industry leaders * Nature: private equity fund
  • Size & conditions: n/a
  • Geographical scope: Nordic region
  • Time scales: n/a

IPR.VC
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
  • Supported game studios: Tunnel Ground, Rival Games, Koukoi, Lightneer

Also at least following private equity fund / venture capital operators have invested in game studios:

INVENTURE
LIFELINE VENTURES
MAKI.VC
SUPERHERO CAPITAL

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Status: 01/2019

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