Finnish VC firm Lifeline Ventures closes $163M fund for early-stage startups

Venture capital firm Lifeline Ventures today announced a fresh €150 million ($163 million) fund aimed at early-stage startups across Finland.

Founded in 2009, Helsinki-based Lifeline Ventures has invested in around 115 companies to date, with more than a dozen exits to its name including activity-tracking app Moveswhich Facebook acquired back in 2014; food delivery company Wolt, which DoorDash snapped up in a $8.1 billion all-stock deal two years ago; and gaming giant Supercellwhich Tencent doled out $8.6 billion for a majority stake in 2016. Lifeline Ventures has also backed unicorns such as open source enterprise infrastructure company Aivenwhich hit a valuation of $3 billion last year.

Lifeline Ventures typically invests at the angel and seed stage, with some follow-on investments in the Series A realm. While “angel” usually refers to wealthy individuals investing with their own cash, in this instance the company means that it sometimes backs companies at a super-early stage, before they have anything meaningful to show from a product perspective. Such investments have included mixed reality headset Maker Varjo and smart ring maker Ourawhich recently claimed a valuation of $2.55 billion.

“We invested in Oura ‘pre-PowerPoint’ — meaning we’ve been there before an actual product was ever made,” Lifeline Ventures founding partner Timo Ahopelto told TechCrunch.

With its new fund, the company says it will look to make investments ranging from anywhere between €150,000 to €2 million. And while the vast majority of its investments (95%, TechCrunch is informed) are aimed at domestic Finnish startups, it has been known to take stakes in companies hailing from elsewhere, including Germany, France, the U.K. and the U.S. when invited to do so.

Sowing seeds

While VC funding has generally declined across all stages, data suggests that earlier-stage funding has been a little more resilient. Certainly, we’ve seen a spate of fresh early-stage funds emerging in Europe of late in the past few months alone. For example, London’s Playfair Capital closed a $70 million pre-seed fund, while France’s Emblem and Ovni Capital each announced new €50 million ($54 million) funds. Elsewhere, the U.K.’s Amadeus Capital Partners partnered with Austria’s Apex Ventures for an €80 million ($87 million) fund targeted at early-stage deep tech startups.

“The early stage is the most recession-proof business, both for founders and investors, as you are likely to always grow faster than markets can go down,” Ahopelto said.

Lifeline Ventures’ latest fund represents its fifth to date, with its inaugural €29 million fund closing in 2012, followed by fund two in 2014which amounted to €17 million; a €57 million fund three in 2016; and a €130 million fund three years later. While a lot has happened in the world since 2019, Ahopelto says that it’s pretty much business as usual from an investment perspective.

“Nothing has really changed for us in terms of investment strategy — we are still the first investors in many cases,” he said. “We’re still seeing lots of startups being founded, in Finland specifically. The ecosystem in Finland is in its early days and will grow two-to-three times in terms of quality and size during the next five to 10 years. There is room for that sort of growth in Finland.”

Lifeline Ventures’ most recent investment was in Origin by Oceanan Espoo-based startup working to rid the oceans of harmful algae by transforming it into functional goods spanning food, cosmetics, textiles and more. And this is one area in particular that Ahopelto reckons will continue to thrive in the years ahead.

“We feel that climate startups will raise their heads even more as time passes,” he said. “Similarly, we will see more climate funds investing in the sphere.”