Finland’s bid to win Europe’s start-up crown

Yellow diggers are shoring up mounds of earth, as building staff put together to put the foundations for what’s set to turn into the most important start-up campus in Europe.

The challenge is an enlargement of Maria 01, a co-working and occasion house for entrepreneurs and buyers, in addition to bigger firms that wish to collaborate with tech start-ups.

Its current services throughout the road already home round 240 start-ups. They’re unfold throughout six buildings that used to make up town’s first hospital, based within the nineteenth Century and infamous in Helsinki for treating sufferers with the plague.

Now, the present 20,000 sq m website is a hub for corporations growing progressive well being applied sciences, alongside AI, cybersecurity, gaming and defence tech start-ups.

“The entire place is admittedly based mostly on neighborhood,” says Maria 01’s CEO Sarita Runeberg. “We convey individuals collectively to allow them to community… and discover completely different sorts of sources to develop their companies.”

There are additionally workplace perks together with a pool desk, desk soccer, working and ice bathing golf equipment, and in true Finnish-style, a sauna.

“We would not be a correct start-up hub if we did not have our personal sauna right here!” laughs Ms Runeberg.

Whereas co-working areas for tech corporations are effectively established throughout the Nordics, Maria 01 is the most important of its sort within the area.

It’s run as a not-for-profit organisation partly funded by town of Helsinki, which has invested greater than €6m ($6.7m; £5.2m) within the hub since its launch in 2016.

Ms Runeberg believes it should turn into the most important start-up campus in Europe following the completion of three new buildings by 2028, including a 50,000 sqm ground space.

Later this yr it’s launching an accelerator programme designed to assist and information high-growth start-ups.

The hub’s present and former members have already collectively raised over €1bn in funding.

This represents round 40% of all early stage funding raised yearly by Finnish start-ups.

Ruben Byron is the Belgian co-founder of a start-up providing cloud companies to AI builders.

He has already scaled his enterprise from a handful of workers utilizing the hub’s sizzling desks to a group of round 40 working from non-public places of work within the former hospital, in addition to remotely.

“That has been an excellent expertise, that we have type of been in a position [to] be nurtured right here in a method,” he says.

Though not as mature – or well-known globally – as different European start-up hubs like Sweden and the UK, Finland has been steadily making a reputation for itself within the tech scene over the past 20 years.

The small Nordic nation, which has a inhabitants of round 5.6 million, has spawned 12 unicorn companies – corporations value a billion {dollars} or extra – together with sleep and health monitoring ring Oura, recreation builders Supercell, Rovio (the creators of the Offended Birds recreation), and meals supply platform Wolt.

Final yr, Startup Blink, a world index mapping greater than 100 nations ranked Finland’s start-up ecosystem the seventh greatest in western Europe, and 14th on the planet.

The index cites components together with hubs like Maria 01, alongside excessive ranges of state and college assist, and Slush – an enormous annual non-profit gathering for world start-ups and buyers.

It additionally highlights Finland’s clear and open enterprise tradition.

“There’s an authenticity with the Finns,” says Jack Parker, a Helsinki-based founder initially from Newcastle upon Tyne, who runs a healthcare innovation start-up.

“Ego would not actually play a component. So if I attain out to someone, it is fairly seemingly eight out of 10 occasions that they may reply.”

Finland’s right-wing coalition, which got here into energy in 2023, is on a mission to push the nation even additional up world indices, stating in its official government programme that it desires the Nordic nation to turn into a pacesetter in fostering a dynamic start-up and progress firm ecosystem.

“It isn’t nearly rankings,” says Marjo Ilmari, who runs the start-up companies group at Enterprise Finland, the federal government company that promotes funding and innovation.

In 2024 Business Finland alone invested €112m in start-ups, a rise of 30% in comparison with the earlier yr.

“The true aim is to create an setting the place our ground-breaking start-ups can emerge and actually deal with world challenges.”

The company hopes this can assist drive progress within the Finnish economic system, which went into recession in 2023 and is at the moment making a sluggish restoration, with the Bank of Finland forecasting a rise of lower than 1% this yr.

The nation can also be making an attempt to draw extra world expertise by providing start-up permits for worldwide founders who wish to develop their companies in Finland.

These entrepreneurs are eligible for a so-called soft-landing assist bundle supplied by Enterprise Finland.

“They offer you recommendation, assist, generally grants to assist the initiation part,” explains Lalin Keyvan, a Turkish-born entrepreneur at Maria 01 who says the scheme was one of many most important the reason why she relocated to Helsinki.

Enterprise Finland’s advertising campaigns for would-be movers spotlight social and life-style components too: Finns are inclined to prioritise wellbeing, plus there’s free schooling and subsidised healthcare and childcare.

“You do not actually have to decide on between constructing a high-growth firm and having fun with life, as a result of you are able to do each,” says Ms Ilmari.

However whether or not all that is sufficient for Finland to compete with Europe’s extra established start-up hubs is up for debate.

Knowledge suggests it nonetheless has an extended option to go to meet up with neighbouring Sweden, lengthy the Nordic darling of the European start-up scene.

It’s residence to more than 40 unicorn businesses together with Spotify, funds platform Klarna and recreation developer King.

In Startup Blink’s ecosystem rating Sweden ranks second in Europe after the UK, and prime within the EU.

Within the final decade it has attracted greater than $29bn in funding in comparison with simply over $8bn in Finland, in response to the annual State of European Tech report by funding firm Atomico.

“I really like Finland’s daring method,” says Charlotte Ekelund, deputy CEO of Sting, a non-profit organisation that helps develop start-ups in Stockholm. Nevertheless she believes Finland continues to be years behind Sweden when it comes to pulling in capital and growing its ecosystem.

“We observe a few of the issues that the Finnish ecosystem is doing now, Sting was a part of driving 10 or 15 years in the past right here – co-working areas, [and] new organisations within the ecosystem that may assist in numerous methods.”

Mikael Pentikainen, CEO of the Federation of Finnish Enterprises, says the nation’s authorities is at the moment shedding assist amongst entrepreneurs regardless of its pro-start-up and pro-business method.

A recent survey for the organisation discovered 41% of small and medium-sized enterprise house owners are happy with the coalition’s actions, down from 54% in June.

One seemingly motive for the dip, says Mr Pentikainen, is a choice to boost VAT from 24% to 25.5% final September, the very best price in western Europe. The federal government stated this was a “difficult but necessary” transfer designed to stabilise public funds.

However Mr Pentikainen suggests it might make Finland’s start-up ecosystem much less aggressive for worldwide founders.

The Finnish authorities has additionally lately toughened up citizenship necessities, that means international entrepreneurs now want to remain a minimum of eight years as an alternative of 5 with a view to acquire a passport, and can quickly even be required to pass a test on Finnish society and tradition in the event that they wish to settle long-term.

Again at Maria 01, Mr Parker, the well being firm founder, says he is assured Finland’s start-up ecosystem will proceed to develop and entice worldwide expertise. However he warns it’d lose a few of the facets which have to this point made it a gorgeous possibility for entrepreneurs.

“The benefit of the ecosystem proper now could be this type of ‘small city, all people is aware of one another’ [feeling]. Scaling that up, there may be the danger of truly shedding that component of it.”