Baltic Sea Area VC Market and the Role of a Governmental Investor

JOUNI HAKALA 13 May 2015

2

SOLID MACROECONOMIC FOUNDATION

Q4/2014 Gross public debt to GDP (%)

vs. Euro area of 92%

59 %

44 %

11 %

45 % 40 %

41 %

26 %

KEY Popu- GDP per Gross Unem- Gov.

INDICATORS lation GDP capita public debt ployment credit

(m) (€bn) (€k) to GDP (%) rate (%) rating

The Nordics

Finland 5,5 204 37 59 % 8,7 % AAA

Sweden 9,6 429 45 44 % 7,9 % AAA

Denmark 5,6 257 46 45 % 6,6 % AAA

Norway 5,1 377 74 26 % 3,5 % AAA

The Baltics

Estonia 1,3 20 15 11 % 7,4 % A+

Latvia 2,0 24 12 40 % 10,8 % A-

Lithuania 2,9 36 12 41 % 10,7 % A-

Euro area 337 10 111 30 92 % 11,6 %

Source: Gross debt to GDP (Eurostat, Q4/2014), GDP (Eurostat, 2014), Population (Eurostat, 2014)

Unemployment rate (Eurostat, 2014), Ratings (Fitch Ratings)

3

ATTRACTIVE ENVIRONMENT FOR ENTREPRENEURSHIP

Rank

Global

Innovation

Index1

Networked

Readiness

Index2

Share of ICT

value added3

Corruption

Perceptions

Index4

Global

Competitive -

ness Index5

EU Innovation

Union

Scoreboard6

Best countries

for business7

1 Switzerland Finland Korea Denmark Switzerland Sweden Ireland

2 Sweden Singapore Israel New Zealand Singapore Denmark New Zealand

3 United Kingdom Sweden Ireland Finland Finland Germany Hong Kong

4 Netherlands Netherlands Finland Sweden Germany Finland Denmark

5 USA Norway Sweden Norway USA Luxembourg Sweden

6 Finland Switzerland Hungary Singapore Sweden Netherlands Finland

7 Hong Kong United Kingdom United Kingdom Switzerland Hong Kong SAR Belgium Singapore

8 Singapore Denmark USA Netherlands Netherlands United Kingdom Canada

9 Denmark USA Czech Republic Australia* Japan Ireland Norway

10 Ireland Taiwan, China Denmark Canada* UK Austria Netherlands

Sources: 1. Cornell Uni., Insead, WIPO (2013), 2. WEF/Insead (2013), 3. OECD (2013), 4. Transparency International (2013), 5. WEF (2013- 2014),

6. European Comission (2014) [ranking among EU countries], 7. Forbes (2013) / * Shared 9th position between Australia and Canada [and Creandum]

14%

4

BIRTHPLACE OF LEADING GLOBAL COMPANIES AND BRANDS

5

FINLAND RANKS #1 IN EUROPE IN VC ACTIVITY

EVCA 2013 Pan-European Private Equity and Venture Capital Activity (May 2014)

Venture Capital – Investments as % of GDP – Market statistics (2013)

6

10,5 BILLION EURO VC MARKET

Source: EVCA 2013 Europe Country Tables (May 2014) Calculated as percentage of the sum of GDP of all European countries included in the EVCA statistics. Note: The figures presented above are based on official EVCA statistics and include also assets held by instutions which do not manage capital on behalf of external investors.

7

OPPORTUNITIES FROM VARIOUS DIFFERENT TECHNOLOGIES

Source: FII analysis, which is based on various underlying sources like Frost and Sullivan, Gartner Research, IT Business Edge etc.

Cleantech & Greentech

Material technology

Advanced Electronics

ICT

Life Sciences & Medtech

• Connected / mobile health • Medical robotics • Medical imaging • Biotechnology and cell therapy • Smart pills and biosensing

• Clean water • Waste treatment • Pollution control • Energy efficiency • Smart grid and energy

storage • Green vehicles and buildings • 2nd generation biofuels • Renewable chemicals

• Internet of things / sensoring • Next generation displays • Haptics and touch

technologies • Data storage technologies • Intelligent robotics • Nanoelectronics

• Intelligent materials and textiles

• Lightweight composites • Compostable packaging • Advanced filtration • Enzyme technology

• Games and gamification • Mobile apps and ad-tech • Human-computer interaction • Information security and privacy • Cloud computing • Big data

• Volume of exits >$1 billion from the Nordics has steadily increased with 2014 being a record year

• In Europe, Nordic countries account for more than 50% of all such exits

THE NORDICS GENERATE NEARLY 10% OF ALL UNICORN EXITS GLOBALLY …EVEN THOUGH THEIR GDP SHARE IS ONLY 2%

Number of over $1 billion technology exits 2005–Q3/2014

Nordic (9)

Rest of Europe (6)

Others (2)

China (12)

USA (60)

10%

14% 67%

7% 2%

Source: Creandum

8

PERFORMANCE COMPARED TO REST OF EUROPE

Source: *ThomsonReuters, Creandum 2005-Q3/2014, **Deloitte 2010-2013, ***Red Herring 2010-2014, ****Truffle 2010-2013, ***** EVCA 2010-2013

V

10

• FII is an established, well recognized

financial institution investing into the

Finnish SME sector through fund and

direct investments

• 100% owned by the Finnish government

• Operates on market driven basis

Assets under management €901 million

Fundinvestments

Funds of funds

Directinvestments

20%

51%

29%

ABOUT US

11

€ million

15

10

5

1

Direct investments Venture capital

Seed Start-up Early growth Expansion

Fund investments Both local and international VC funds

Fund investor in e.g. Balderton, Northzone, DFJ Esprit, DN Capital

Direct investments Buyout

OUR INVESTMENT FOCUS

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DESCRIPTION Waste logistics optimisation, sensor + SaaS offering Metadata based document management OS database products & services Cloud based call center SW 3D GUI solutions for automotive

BUSINESS STAGE Early commercialisation Expansion, €22 million revenue at 80% growth Expansion Series A completed, European expansion and 70–100% growth Embedded in various Audi models, more design wins with leading automotive OEMs secured

OTHER INVESTORS Earlybird (DE), Lifeline Ventures (FI) DFJ Esprit (UK) Intel Capital (UK), California Technology Ventures (US), Runa Capital (RU) Dawn Capital (UK) Inventure (FI), Nexit Ventures (FI)

SELECTED PORTFOLIO COMPANIES

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FUND Balderton Capital V L.P. Fund size: 305 m$ Northzone VII L.P. Fund size: 150 m€ Inventure Fund II Ky Fund size: 70 m€ Verso Fund II Ky Fund size: 50 m€

INVESTMENT FOCUS UK based VC investor in high-growth technology markets, such as e-commerce, consumer internet and software

Norwegian Pan-Nordic VC investor in e.g. e-commerce, fintech, mobile applications, big data, internet of things and alternative energy

Finnish VC investor that also invests in Nordic companies engaged in technology, software and next generation of digital services

Finnish investor that invests in businesses or technologies spun off from larger corporations

SELECTED FUND INVESTMENTS

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PRODUCING SIGNIFICANT IMPACT

Assets under management

€901m

Investor directly or through funds in

610 companies

Over

50 000 employees in portfolio

companies

Portfolio companies generate

€8,5b revenue

€765m in

commitments in funds with a total capital of

€15b

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