Finnish venture capital firm Innovestor has today announced the first close of its new B2B Industrial Technology Fund at €30 million. The fund, which will be capped at €100 million, is the first in the Nordics and Baltics to focus exclusively on early-stage B2B industrial technology companies.
Innovestor’s new fund will offer pre-series A to series A investments to companies in the Nordics and Baltics that focus on Industry 4.0 and sectors benefiting from the fourth industrial revolution such as smart cities, cyber and physical security, and digital energy.
“Our focus is extremely specific because we are aware that adjacent megatrends close to Industry 4.0 such as sustainability, connectivity, and data security will grow in the long-term future and require more support, and we will be at the forefront of that,” says Innovestor’s CEO, Tommi Äijälä.
According to Innovestor, the companies that will best fit the fund will already have product-market fit and traction, and are ready to scale internationally in order to introduce new technologies that combine physical, digital, and biological elements and will impact multiple disciplines, economies, and industries.
It also states there’s a significant vacuum in their target market, in that many promising startups are at risk of going out of business despite having growth potential. It sees a massive funding gap for good Series-A companies that are being overlooked or underfunded due to the lack of investors in the market. Myron Seto, Partner at Innovestor, calls this a “crunch that creates opportunities to invest in comparatively de-risked but moderately valued companies“.
Within the Innovestor ecosystem, the company has witnessed disruption become an unavoidable challenge for industrial corporations.
“Industrial corporations know that disruption is coming and they must cooperate with agile partners or risk losing significant business. In addition to our capital, our unique network of founders, investors, advisors, talent, and corporate partners has shown us one of the best ways for corporations to compete on a global scale is to work alongside scaling companies that can provide new innovation,” says Pekka Viljakainen, Venture Partner at Innovestor.
The fund is backed by institutional investors such as Mandatum Life, family offices, and high net worth individuals. The fund will make its first investments as early as Q2 of 2020.