Finnish mobile investors show staying power — MobileMonday Global: Industry News

^{Nokia’s gravity pull is lessening} Finnish mobile investors show staying power

19 Jan 2005 at 18:39 GMT Timo Poropudas

Finland is recovering from its mobile hangover, says Juha Mikkola. “Finnish companies were not making globally hungry business plans and product companies were aiming only for subcontracting, but things are moving again.”

Mikkola believes that Finland retained its position as the leading wireless country despite the quiet years.

Swedish and Norwegian companies retained their more aggressive business plans, says Mikkola who is a senior partner Eqvitec Partners, a Nordic venture capital company. Mikkola was speaking at the January MobileMonday event in Helsinki.

Swedish VC sector, on the other hand, has been in turmoil with tens of VC’s going out of business. Mikkola says that the Finnish VC scene has stayed remarkably stable. He thinks that is a positive development for Finland since because it allows accumulation of risk capital know how.

Eqvitec has EUR 260 million invested and another EUR 50 million is looking for takers. In 2004 the company made 8 new investments worth EUR 32 million and 5 exits.

Eqvitec’s portfolio includes such wireless are companies as Digia, Fasttrax, Navicore, Saraware, Smartner and Smarttrust.

According Mikkola today company valuations are correct and deal are being closed.

“Corporate venture is totally dead, only VC’s are investing in start-ups.”

Mikkola is pleased with fortunes of Smartner and Valimo. “Valimo is finally starting to pick up.” Valimo is a Finnish company that provides mobile transaction validation and authentication.

Mikkola uses Smarttrust as an example how VC’s can add value to companies. Smattrust accumulated EUR 150 million losses before new owners took it over. Now the company has new management and strategy. Actually only one person of the old leadership stayed on board. The company reduced 140 people, cut EUR 11 million expenses and at a same time managed to grow its sales 28 percent.

Good people released from Nokia pull

“Changes in Nokia fortunes and top leadership are good for Finnish mobile industry and VC’s,” Mikkola says

“Baldauf and others leaving from Nokia helps us. Nokia used to suck all the good people with its option programs, but now the start-ups are looking interesting, too. This means that Finnish start-ups can attract the best brains for boards or management.”

Mikkola believes that ultimately the new situation, even if it is not positive for Nokia, is good for all of the Finnish mobile industry.