Finland is home to a growing number of clean tech companies

Over the five-year review period (2018–2022), Finnish cleantech growth companies have developed rapidly, achieving an average annual growth rate of over 30% in terms of both net sales and number of employees.

The sector’s promising development is mainly driven by large growth companies such as Relex, a supply chain optimiser, and Swappie, a refurbisher of used mobile phones. However, the billions of euros in clean transition investments seen, for instance, in Sweden have not materialised in Finland.

"Although growth is now driven by large growth companies, especially in Finland’s case, new companies were also established in previous years. This means that there is a lot of undergrowth, and promising companies promoting a clean transition are growing," comments Jakob Sandell, Research Manager at Tesi, who compiled the report.

Cleantechs have succeeded in securing funding in previous years. Over the five-year 2018–2022 period, the number of venture capital investments raised by growth companies in the clean transition sector almost doubled – from just under 30 to nearly 60 investments annually. The total amount of VC investments secured in 2018 was some €90 million, while over the next few years this figure exceeded €300 million almost every year.

However, there is cause for concern about financing for companies’ higher-growth or industrial production phase: less than 15% of follow-on funding rounds exceeding €20 million are raised entirely in Finland.

"Foreign investors are increasingly cautious about investing outside their home countries. That poses challenges – especially when a company needs financing for international growth or for starting up its first production facility," says Sandell.

Nevertheless, adequate domestic funding is important.

"A domestic anchor investor often plays an important role in helping to convince international investors of the project's opportunities," comments Pia Santavirta, Tesi’s CEO.

"The involvement of a Finnish investor also strengthens Finnish ownership since the company will not be sold abroad so quickly. Meanwhile, the companies driving growth and the clusters of expertise formed around them stay on to strengthen and transform Finland’s business community,” adds Santavirta.

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About the study

The survey identified approximately 400 Finnish cleantech companies. The report focuses on VC-backed companies, as they typically have ambitious growth plans and international markets. Most companies in the survey received venture capital (VC) funding in 2018–2024. The study also includes companies with more than ten employees that achieve annual growth of 20% in net sales or workforce. Additionally, some companies have been selected that do not fit into these categories but make a significant contribution to the clean transition. Furthermore, the following criteria must be met: (a) the startup has an emissions-focused or net-zero-focused strategy; (b) the company’s operations are closely related to a theme essential for achieving net-zero goals; (c) the company demonstrates innovation or the use of technology.