Focusing on scaleups in Tampere, Finland – high-growth companies seeking international expansion need tailored services19.5.2023
Business Tampere is developing a set of services for scaleup companies. The effort is done together with other members of the Tampere startup ecosystem, such as Demola, Platform6 and DIMECC. Their main objective is to provide services for all the steps of a startup journey, from early stages to international success.
The scaleup services of the Tampere region are intended for companies who aim for strong international growth. By Business Tampere’s definition, a scaleup is simply a more mature startup being on the threshold of international expansion.
Age doesn’t necessary define a company’s growth phase. While some land the in scaleup phase in matter of a few years, for others it may take fifteen. Then there are companies who enter global markets right away, for example if there are no suitable domestic customers.
– We will focus on companies with startup background that already have a turnover of at least one million. The goal of our services is to help them grow to a 10 million turnover, says Tapio Siik, Senior Business Advisor, funding, at Business Tampere.
– A scaleup company must have proof that their business is working and there are customers willing to pay for their product or service, says Sami Puttonen, Business Advisor at Business Tampere and Scaleup Launchpad Project Manager.
Scaleup companies are very diverse in their needs and situations. Therefore, services must also be tailored separately to each company.
What are the challenges of scaling up?
Challenges faced by the scaleup companies can be divided under four main themes: financials, opening international markets, building a team, and strategy. This observation was made when preparing for the cross-border Scaleup Launchpad programme.
– When a company is growing rapidly and its founders need to recruit more people, how to build a team in a sensible way? Or, how to be able to keep eyes on the long-term strategy and not only on the day-to-day survival, says Puttonen, listing examples.
– External help may be useful when clarifying a scaleup company’s focus: what the company is really doing and what it would like to do. Or what kind of financial instruments and accelerator services would be available, says Tero Kyckling, Senior Business Advisor, international relations and startups at Business Tampere.
According to the Business Tampere’s scaleup experts, to obtain funding is a significant watershed for a company as it goes international. The company’s own cash flow and organic growth can be a very good business and a good way to move forward, but...
– It would be useful to see if the scaleup company can get a larger external funding and be able to make things happen in a really big way, says Siik.
Several millions are typically needed when going to international markets. The experts always set out to build a financial package of both private and public sources.
Tools to help scaleup companies
An analysis tool HippoMeter has recently been introduced in the Tampere region. With it, a company’s key people will be asked questions of the company’s business. The result is a score depicting the scaleup’s current state and improvement needs.
– The goal of the tool is to give investors an overview of the company's financeability. Even more important is to reveal potential development areas, so that the company would be more attractive to investments, says Siik.
HippoMeter will be a key tool when experts work with scaleup companies in the Tampere region. It helps targeting the services in a right way.
Another novelty in the Tampere region is ’the Startup funnel’ – a description of the region’s startup and scaleups compiled in Miro Board. It is regularly updated and shows each company’s current stage.
– Startup funnel is a new concept in Finland. It gives companies visibility so that e.g. investors can track the upcoming and existing items they find interesting, says Kyckling.
– One of the goals of Business Tampere scaleup activities is to ensure that companies wouldn't be left without funding just because investors didn’t find them, Siik adds.
A Scaleup Club has also started in Tampere. Startup companies that have reached a certain stage can gather around themes of mutual interest there, share experiences and listen to expert speakers. The first topic was the US market, because – thanks to the NATO membership and the fighter jet deal – interest in Finland is on the rise there.
Growth programmes for scaleups
Scaleup Launchpad executes two cross-border growth programmes together with Business Tampere, Tartu Science Park and Norrköping Science Park. Around 20 scaleup companies that develop solutions for the operating environment of smart cities to achieve carbon neutrality goals, will be selected. The 10-month programmes offer practical help for companies' challenges.
– A special feature in the Scaleup Launchpad programme is that it offers cities as operating environments and platforms, and open their doors for innovative companies. So the goal is to reach the customers faster, says Puttonen.
Meanwhile DIMECC, an open collaboration platform for industrial and research expertise, is launching a project for tech-sector scaleup companies, together with partners from Estonia and Latvia. The ESCALTECH project aims at developing and implementing a scaler support programme to help tech-sector companies in Finland and the Baltics area.
– In the Tampere region, we intend to support as many criteria-meeting companies as possible to scale up, by offering them services and training modules that are tailored based on their needs, says Pryjma.
According to Pryjma, both Scaleup Launchpad and ESCALTECH give companies a good basis to invest in their scaling with reliable actors. At the same time, the companies are able to reduce risk and costs in the way that the programmes make possible.
– Compared to the situation a year ago, the region’s scaleup activities have clearly increased. There is the Scaleup Club, accelerator, Launchpad, Dimecc's programme – things happen, each one has their own point of view and they support each other, says Puttonen.
Strengthening of scaleup companies increases region’s vitality
The Helsinki metropolitan area is definitely the strongest startup region in Finland. All over the world the spirit of the game is that one out of ten startups makes it to the scaleup level. So there must be plenty of startups in order to get companies to the scaleup phase.
– If we look at the situation within the Tampere region, there are currently a bit less than 40 companies in the scaleup phase and in our main focus group. They are, for example, from the gaming and health technology sectors, says Siik.
Scaleup activities benefit the entire region over time, because every company that manages to increase its turnover from one million to ten millions is a significant player in the region, an attractive employer and tax payer.
High-quality scaleup services also tend to attract new startup founders to the region – and more startups mean more potential high-grow companies that will go successfully international.
Author: Päivi Stenroos