Venture Capital and Private Equity Industry in Finland

Venture Capital and Private Equity Industry in Finland 215 1.6.216

2 Highlights 215 Finnish companies received over 1 billion Euros of VC/PE investments Out of the 1, billion Euros invested in Finnish companies buyout-stage companies received 923 M (593 M ) and venture capital stage companies 122 M (124 M ). Venture capital investments in Finnish companies, in relation to the GDP, is the highest in Europe The investments in Finnish startups and early stage growth companies was the highest in Europe and over twice the European average. Measured by 21-214 average, venture capital investments in Finnish companies topped the list also in the longer term, right after Sweden. The role of private sector investors growing stronger in early stage investments Finnish private sector venture capital investments have increased from 39 M in 211 to 88 M in 215. Direct investments from public sector venture capital investors have decreased from 38 M to 25 M during the same time period. Summary Finnish VC/PE firms year-end capital under management was 6, billion Euros (5,7 B ). Finnish VC/PE firms invested 527 million Euros (57 M ) in 252 companies (293). In total 24 Finnish companies (281) received investment from local or international VC/PE firm. 92 (17) of these companies got firsttime an investment from VC/PE firm. Finnish and international VC/PE firms exited 99 (75) Finnish companies. Note: Previous year s corresponding figures are in parenthesis.

3 Summary Venture & Buyout 215 Foreign institutional investors Finnish institutional investors Unspecified Fundraising Investments 275 M 8 M 71 M Finnish PE firms (FuM 6, billion euros) Foreign PE firms 77 M 45 M 594 M Foreign portfolio companies Finnish portfolio companies

4 Summary Venture 215 Institutional investors Investments Finnish PE firms Foreign PE firms 13 M 11 M 21 M Foreign portfolio companies Finnish portfolio companies Note: The statistics include only investments from PE firms. More information on page 45.

5 Summary Buyout 215 Institutional investors Investments Finnish PE firms Foreign PE firms 64 M 35 M 573 M Foreign portfolio companies Finnish portfolio companies

6 Fundraising Funds raised by Finnish PE firms

7 Annual new funds raised by Finnish PE firms by fund stage focus in 1992 215 14 12 M 121 67 1 8 6 4 2 51 86 42 27 23 71 25 269 35 35 7 33 127 89 168 13 18 21 68 2 1 264 168 92 128 249 14 4 187 1 59 57 64 129 125 4 82 113 63 17 215 214 213 212 211 21 29 28 27 26 25 24 23 22 21 2 1999 1998 1997 1996 1995 1994 1993 1992 Venture Growth Buyout Mezzanine Generalist Total

8 Geographical distribution of annual new funds raised by Finnish PE firms in 1998 215 1% 9% M 8% 7% 6% 5% 4% 3% 2% 1% % 1998-22 23-27 28-212 213-215 Finland Other Europe Outside Europe Outside Finland, total

9 New funds raised by Finnish PE firms divided by investor (LP) type in 1996 215 1% M 9% 8% 7% 6% 5% 4% 3% 2% GP commitments Other asset managers Academic Institution Endowments and foundations Private Individual Family office Capital Market Corporate Investor Unspecified Banks Fund of Funds Other Insurance Companies 1% % 1996-2 21-25 26-21 211-214 215 Total Government agencies Pension funds

1 Year-end capital under management of Finnish PE firms in 1995 215 6 M 5 4 3 2 1 215 214 213 212 211 21 29 28 27 26 25 24 23 22 21 2 1999 1998 1997 1996 1995 Capital under management

11 Capital available for investing of Finnish PE firms on December 31, 215 25 M 2 15 1582 1 5 548 Capital available for investing Venture 754 142 Capital targeted to initial investments Buyout

12 Industry Statistics The domestic and foreign activity of the Finnish offices of PE firms

13 Private equity activity of Finnish PE firms in 1991 215 14 M 12 1 8 6 4 2 215 214 213 212 211 21 29 28 27 26 25 24 23 22 21 2 1999 1998 1997 1996 1995 1994 Fundraising Investments Divestments (at cost)

14 Annual stage distribution of venture investments made by Finnish PE firms in 1996 215 2 18 16 14 12 1 8 6 4 2 M Nbr investments 92 84 71 37 52 35 28 33 32 29 16 49 25 37 43 61 32 41 47 33 35 44 54 17 48 61 61 68 67 66 49 17 19 28 26 49 16 22 27 15 22 29 8 5 23 2 3 4 11 12 12 17 1 1 5 3 7 4 6 1 215 214 213 212 211 21 29 28 27 26 25 24 23 22 21 2 1999 1998 1997 1996 Seed Start-up Later stage venture Venture total (nbr) 4 35 3 25 2 15 1 5

15 Annual stage distribution of buyout investments made by Finnish PE firms in 1996 215 5 45 M / Nbr investments 4 Buyout 35 Replacement capital 3 25 2 15 1 5 378 13 277 77 175 395 31 263 371 154 12 136 18 135 15 125 178 9 58 24 53 149 39 15 59 2 73 32 61 22 16 4 149 8 19 135 52 25 3 37 3 6 93 67 8 13 24 29 6 81 111 18 31 4 28 5 44 77 61 6 48 65 5 58 1 2 29 4 Rescue/Turnaround Rescue/Turnaround & Replacement capital Growth Buyout total (nbr)

16 Annual stage distribution of number of portfolio companies invested in by Finnish PE firms in 1996 215 3 Nbr companies 5 25 2 15 1 5 54 43 25 23 6 6 4 6 27 4 7 1 16 5 3 31 12 12 29 3 41 41 17 3 7 37 14 5 3 31 41 36 18 29 9 34 18 97 12 12 134 9 76 58 52 19 12 2 12 5 12 37 25 2 4 24 42 41 124 115 44 36 215 214 213 212 211 21 29 28 27 26 25 24 23 22 21 2 1999 1998 1997 1996 Total Seed Start-up Later stage venture Growth Rescue/Turnaround Replacement Capital Buyout Note: If the same (one) company receives for example one start-up investment and one growth investment during the same reporting year, it is reported in both stages.

17 Average size of investments made by Finnish PE firms in 1996 215 Venture,8,7,6,5,4,3,2,1, M per investment M Nbr investments 27 28 29 21 211 212 213 214 215 4 35 3 25 2 15 1 5 M per portfolio company 215 59 Average size of investment Nbr investments 7, 14 M Nbr investments 6, 12 5, 1 4, Buyout 6,3 M 3, 2, 4 1, 2, 27 28 29 21 211 212 213 214 215 8 6 Average size of investment Nbr investments

18 Quarterly investments made by Finnish PE firms in 29 215 Quarter Venture Buyout M Nbr Nbr M investments investments Q4/215 42 99 152 28 Q3/215 22 54 34 14 Q2/215 33 83 84 15 Q1/215 17 6 145 23 Q4/214 3 95 86 36 Q3/214 21 67 155 31 Q2/214 27 93 11 26 Q1/214 23 81 119 26 Q4/213 34 87 328 21 Q3/213 16 55 22 16 Q2/213 35 89 47 26 Q1/213 22 69 59 23 Q4/212 19 59 134 34 Q3/212 16 44 141 22 Q2/212 25 73 5 3 Q1/212 23 51 78 28 Q4/211 3 68 114 36 Q3/211 1 4 95 17 Q2/211 21 58 6 37 Q1/211 16 45 97 35 Q4/21 24 76 68 31 Q3/21 21 59 88 32 Q2/21 38 62 122 33 Q1/21 15 46 65 2 Q4/29 35 9 55 32 Q3/29 14 52 162 26 Q2/29 13 54 39 24 Q1/29 24 76 28 18

19 Industry distribution of investments made by Finnish PE firms in 215 Business and industrial products Agriculture Business and industrial services Consumer goods and retail Computer and consumer electronics Life sciences Communications Consumer services: other Construction Energy and environment Other Chemicals and materials 2 4 6 8 1 12 14 16 M Nbr companies

2 Initial and follow-on investments made by Finnish PE firms in 29 215 Venture 16 14 M / Nbr companies 12 1 8 6 4 47 6 51 51 76 74 76 2 38 39 27 32 31 27 37 29 21 211 212 213 214 215 Initial Follow-on Initial (nbr) Follow-on (nbr) Buyout 6 5 M Nbr companies 6 5 4 126 3 19 13 171 279 374 2 23 343 234 263 1 244 124 51 82 29 21 211 212 213 214 215 Initial Follow-on Initial (nbr) Follow-on (nbr) Note: Initial investment = Initial private equity investment for the target company 4 3 2 1

21 Private PE firms share of all Finnish PE investments in 1995 215 1% 9% M 8% 7% 6% 5% 4% 3% 2% 1% % 215 214 213 212 211 21 29 28 27 26 25 24 23 22 21 2 1999 1998 1997 1996 1995 Total Venture Buyout

22 Syndication of investments made by Finnish PE firms in 28 215 1% 9% Nbr investments 8% 7% 6% 5% 4% 3% 2% 1% % 28 29 21 211 212 213 214 215 Syndication % in venture Syndication % in buyout

23 Regional distribution of investments made by Finnish PE firms in 215 Province of Lapland M Nbr investments Venture,2 4 Buyout Province of Oulu M Nbr investments Venture 11,6 49 Buyout 16,3 7 Province of Western Finland M Nbr investments Venture 6,4 31 Buyout 47,3 14 Province of Eastern Finland M Nbr investments Venture 4,5 24 Buyout 5,3 8 Province of Åland M Nbr investments Venture Buyout Province of Southern Finland M Nbr investments Venture 75,9 16 Buyout 277,3 36 investments Abroad M Nbr investments Venture 12,7 26 Buyout 64,2 9

24 Geographical distribution of investments made by Finnish PE firms in 27 215 (M ) Venture Buyout 8 M 7 13 6 5 4 3 2 1 63 14 41 18 35 13 49 4 34 6 6 44 47 6 4 13 24 4 36 5 43 7 28 7 5 9 13 14 41 37 37 H1/27 H1/28 H1/29 H1/21 H1/211 H1/212 H1/213 H1/214 H1/215 35 3 M Investments in Finland Investments abroad 25 62 5 12 31 68 17 2 26 14 83 15 324 47 37 11 213 76 25 28 1 213 158 173 198 212 146 41 172 116 126 138 5 27 17 8 1 39 5 64 H1/27 H1/28 H1/29 H1/21 H1/211 H1/212 H1/213 H1/214 H1/215 Investments in Finland Investments abroad 26 6 44 7 56

25 Geographical distribution of investments made by Finnish PE firms in 27 215 (nbr) Venture 2 15 1 5 Nbr investments 14 16 18 9 19 12 6 4 16 1 157 117 142 145 118 133 14 129 87 98 11 113 16 87 16 1 14 13 14 13 148 158 148 128 13 14 Buyout H1/27 H1/28 H1/29 H1/21 H1/211 H1/212 H1/213 H1/214 H1/215 Investments in Finland Investments abroad 7 Nbr investments 14 6 3 11 19 1 5 2 8 13 19 7 4 5 4 17 4 8 4 7 5 3 55 58 49 52 45 48 38 38 4 45 48 2 29 32 37 32 3 33 38 1 H1/27 H1/28 H1/29 H1/21 H1/211 H1/212 H1/213 H1/214 H1/215 Investments in Finland Investments abroad

26 Annual divestments made by Finnish PE firms in 1996 215 7 M, at cost / Nbr divestments 6 5 4 682 3 2 1 356 39 35 179 233 274 325 283 24 185 87 67 119 118 92 54 52 2 1 7 29 38 52 14 16 29 25 43 25 15 14 35 12 23 28 41 37 1996 1997 1998 1999 2 21 22 23 24 25 26 27 28 29 21 211 212 213 214 215 Write-offs Divestments excl. write-offs Write-offs (nbr) Divestments excl. write-offs (nbr)

27 Method distribution of divestments made by Finnish PE firms in 27 215 1% M * 9% 8% 7% 6% Unspecified Divestment by Other Means Divestment by Write-Off Sale to Financial Institution 5% Sale to Management (Buy-back) 4% 3% 2% Repayment of Preference Shares/Loans IPO or sale of quoted equity Sale to Another Private Equity House Divestment by Trade Sale 1% % 27 28 29 21 211 212 213 214 215 Total *M, at cost

28 Market Statistics The activity towards Finnish portfolio companies from Finland and abroad

29 Annual investments made in Finnish portfolio companies in 27 215 12 M / Nbr investments 1 8 6 937 923 4 54 586 496 762 527 695 593 2 132 12 91 15 86 8 135 124 122 27 28 29 21 211 212 213 214 215 Venture Buyout Total (nbr)

3 Annual venture investments made in Finnish portfolio companies in 27 215 16 14 M Nbr investments 4 35 12 3 1 69 47 56 38 43 25 8 31 38 31 14 2 6 15 4 2 46 78 64 71 7 5 62 62 52 17 9 9 5 3 4 7 8 9 27 28 29 21 211 212 213 214 215 Seed Start-up Later stage venture Venture total (nbr) 1 5

31 Annual buyout investments made in Finnish portfolio companies in 27 215 1 9 8 7 6 5 4 3 2 1 M Nbr investments 858 842 27 667 512 198 393 417 521 19 23 239 3 16 256 3 3 137 12 1 18 128 28 24 14 5 25 4 1 1 61 49 6 41 43 79 27 28 29 21 211 212 213 214 215 Growth Rescue/Turnaround Replacement capital Buyout Buyout total (nbr) 14 12 1 8 6 4 2

32 Annual number of Finnish portfolio companies invested in in 27 215 3 Nbr companies 25 2 15 1 5 43 59 5 11 48 6 24 24 38 5 27 25 5 15 15 3 9 2 3 7 12 13 6 4 35 29 22 25 45 44 2 41 33 3 4 12 5 39 29 38 19 31 35 24 76 28 12 119 91 11 119 129 95 87 75 57 49 44 3 2 12 15 11 27 28 29 21 211 212 213 214 215 Buyout Replacement capital Rescue/Turnaround Growth Later stage venture Start-up Seed Note: If the same (one) company receives for example one start-up investment and one growth investment during the same reporting year, it is reported in both stages.

33 Early stage investments and Tekes funding* for Finnish young growth companies in 27 215 45 M 4 35 3 59 71 32 71 36 28 R&D loans R&D grants NIY Tekes 25 2 15 1 5 44 39 26 35 6 6 115 111 7 49 3 34 17 8 2 18 8 4 82 1 67 66 38 3 22 22 9 2 9 3 24 82 76 45 28 14 26 7 16 19 11 26 24 33 34 127 116 17 Nasdaq First North Other (FVCA's estimate) Business angels Other venture capital Seed 17 9 9 5 3 4 7 8 9 27 28 29 21 211 212 213 214 215, TEKES, Finnvera, FiBAN *Tekes funding for less than 6-year old companies and NIY funding

34 Quarterly investments made in Finnish portfolio companies in 29 215 Quarter Venture Buyout M Nbr Nbr M investments investments Q4/215 43 98 272 31 Q3/215 24 52 47 14 Q2/215 38 85 153 14 Q1/215 18 6 452 26 Q4/214 42 1 232 32 Q3/214 22 67 15 29 Q2/214 3 98 1 3 Q1/214 3 86 11 29 Q4/213 44 89 31 22 Q3/213 26 6 7 2 Q2/213 41 94 126 28 Q1/213 23 72 189 26 Q4/212 17 53 94 32 Q3/212 14 4 136 18 Q2/212 25 69 89 35 Q1/212 23 49 29 28 Q4/211 29 67 121 36 Q3/211 1 4 94 13 Q2/211 27 56 25 36 Q1/211 19 45 342 36 Q4/21 31 87 89 33 Q3/21 19 62 197 32 Q2/21 41 67 127 29 Q1/21 14 45 83 23 Q4/29 34 91 58 33 Q3/29 18 49 255 3 Q2/29 13 5 47 28 Q1/29 26 75 226 21

35 Industry distribution of investments made in Finnish portfolio companies in 215 Business and industrial products Business and industrial services Consumer goods and retail Life sciences Computer and consumer electronics Other Communications Consumer services: other Construction Energy and environment M % Nbr Companies % Total investment 988 1, 234 1, Subtotal high-tech 9 9,1 98 41,9 Subtotal cleantech 72 7,3 21 9, Chemicals and materials 5 1 15 2 25 3 35 4 M Nbr companies

36 Industry distribution of venture investments made in Finnish portfolio companies in 215 Communications Computer and consumer electronics Life sciences Business and industrial products Consumer services: other Energy and environment Other Chemicals and materials Consumer goods and retail Business and industrial services 5 1 15 2 25 3 35 4 45 5 55 M Nbr companies

37 Initial and follow-on investments made in Finnish portfolio companies in 29 215 Venture 15 125 M / Nbr companies 1 75 5 5 6 5 48 11 93 79 25 4 45 35 31 34 31 43 29 21 211 212 213 214 215 Initial Follow-on Initial (nbr) Follow-on (nbr) Buyout 9 M Nbr companies 6 75 6 45 3 15 398 471 225 351 285 636 384 524 232 291 368 211 143 59 29 21 211 212 213 214 215 5 4 3 2 1 Initial Follow-on Initial (nbr) Follow-on (nbr) Note: Initial investment = Initial private equity investment for the target company

38 Regional distribution of investments made in Finnish portfolio companies in 215 Province of Lapland M Nbr investments Venture,2 4 Buyout Province of Oulu M Nbr investments Venture 13,7 52 Buyout 5,3 7 Province of Western Finland M Nbr investments Venture 7,1 33 Buyout 5,3 15 Province of Eastern Finland M Nbr investments Venture 5, 25 Buyout 5,3 8 Province of Åland M Nbr investments Venture Buyout Province of Southern Finland M Nbr investments Venture 92,9 177 Buyout 812,8 48

39 Investment amounts made in Finnish portfolio companies by origin of investor in 27 215 Venture 1 8 6 4 2 Buyout 6 5 M 15 63 13 41 35 8 28 49 5 34 8 8 44 47 1 4 22 4 24 36 6 43 3 28 14 3 5 23 27 11 41 37 37 H1/27 H1/28 H1/29 H1/21 H1/211 H1/212 H1/213 H1/214 H1/215 M Finnish Investor Foreign Investor 4 393 41 57 3 288 452 134 19 21 38 76 223 25 198 17 18 2 9 25 12 324 1 213 158 25 173 213 198 116 146 39 5 8 126 172 212 1 138 64 H1/27 H1/28 H1/29 H1/21 H1/211 H1/212 H1/213 H1/214 H1/215 Finnish Investor Foreign Investor 44 1 56

4 Number of investments made in Finnish portfolio companies by origin of investor in 27 215 Venture 2 15 1 5 Nbr investments 12 17 25 8 157 117 142 145 7 118 7 133 8 14 2 129 14 9 87 98 5 113 6 87 18 148 21 128 26 19 158 148 15 1 13 14 Buyout H1/27 H1/28 H1/29 H1/21 H1/211 H1/212 H1/213 H1/214 H1/215 Finnish Investor Foreign Investor 8 6 4 2 Nbr investments 15 14 5 49 29 32 14 11 38 38 8 55 7 45 13 52 13 58 9 4 15 48 13 22 12 37 32 3 14 13 45 48 7 7 33 38 H1/27 H1/28 H1/29 H1/21 H1/211 H1/212 H1/213 H1/214 H1/215 Finnish Investor Foreign Investor

41 Annual divestments made from Finnish portfolio companies in 27 215 1 9 M, at cost Nbr divestments 3 8 25 7 2 6 5 956 93 15 4 3 2 1 76 358 242 178 198 428 333 256 1 5 14 8 31 14 23 37 55 37 27 28 29 21 211 212 213 214 215 Write-offs Divestments excl. write-offs Write-offs (nbr) Divestments excl. write-offs (nbr)

42 Method distribution of divestments made from Finnish portfolio companies in 27 215 1% M * 9% 8% 7% 6% 5% 4% 3% 2% Unspecified Divestment by Other Means Divestment by Write-Off Sale to Financial Institution Sale to Management (Buy-back) Repayment of Preference Shares/Loans IPO or sale of quoted equity Sale to Another Private Equity House Divestment by Trade Sale 1% % 27 28 29 21 211 212 213 214 215 Total *M, at cost

43 VC/PE investments as percentage of country s GDP in 27 215 1,4% Investments as % of GDP 1,2% 1,%,8%,6%,4%,2%,% 215 Average 21-214, EVCA, IMF, World Economic Outlook Database (GDP)

44 Venture investments as percentage of country s GDP in 27 215,7% Investments as % of GDP,6%,5%,4%,3%,2%,1%,% 215 Average 21-214, EVCA, IMF, World Economic Outlook Database (GDP)

45 Buyout investments as percentage of country s GDP in 27 215 1,4% Investments as % of GDP 1,2% 1,%,8%,6%,4%,2%,% 215 Average 21-214, EVCA, IMF, World Economic Outlook Database (GDP)

46 Methodology

47 Methodology of the survey The statistics describing the Finnish private equity industry are based on information received from PEREP_Analytics private equity database A fully functional, centralised non-commercial pan-european private equity database With its own staff, internal resources and webportal Information is collected via an online survey and complemented with public sources of information Figures are updated continuously and are therefore subject to change Note: The statistics include only PE firms (including evergreens and captives) investments. Syndicate and direct investments made by several other investors, e.g. LP co-investors, individuals, entrepreneurs, business angels, management, corporates, funds-of-funds, other asset managers and/or financial institutions, are not included in FVCA s statistics. However, they may form a notable part of the venture market. Additionally, growth investments classification to buyout investments affects the venture statistics. The following national private equity associations are participating in PEREP_Analytics: APCRI (Portugal) CVCA (The Czech Republic) EVCA (Europe) NVCA (Norway) SEEPEA (Southeast Europe) AVCO (Austria) CVCA (Croatia) FVCA (Finland) NVP (The Netherlands) SLOVCA (Slovakia) BVA (Belgium) DVCA (Denmark) HVCA (Hungary) PPEA (Poland) SVCA (Sweden) BVK (Germany) EstVCA (Estonia) IVCA (Ireland) SECA (Switzerland)

48 Methodology of the survey Statistics are aggregated via two methods industry statistics and market statistics Industry statistics By country of private equity firm s office Here: Domestic and foreign investments/divestments made by the Finnish offices of private equity firms Market statistics By the location of the portfolio company Here: Investments/divestments in/from Finnish portfolio companies made by domestic and foreign private equity firms Note: The aggregated figures may not always sum up to totals due to rounding. Some graphs exclude variables labelled as unspecified. Please ask FVCA s analyst for more information about the methodology

49 Stage definitions VENTURE Investments in companies in their early development stage Seed Start-up Later stage venture Seed Start-up, Other early stage Later stage venture, Bridge financing BUYOUT A transaction financed by a mix of debt and equity, in which a business, a business unit or a company is acquired Growth Rescue/Turnaroun d Replacement capital Buyout Growth Rescue/Turnaround Secondary purchase/replacement capital, Refinancing bank debt Management buyout (MBO), Management buy-in (MBI), Public to private, Other PIPE, Other leveraged buyout