Financing SMEs and Entrepreneurs 2026: Finland
Table of contents
The Finnish economy is recovering from a recession, with modest growth expected in the near term. It faced major changes and challenges in the 2020s, and the long-heralded growth has yet to materialise. The post-COVID recovery was rapid but GDP growth slowed to a mere 0.8% in 2022 due to inflation, rising interest rates, and Russia's large-scale aggression against Ukraine, GDP then contracted by 0.9% in 2023 and by 0.1% in 2024.
Most forecasts expect the Finnish economy to resume growth, with the Ministry of Finance projecting GDP growth of 1% in 2025, 1.5% in 2026, and 1.7% in 2027. Slowing inflation and falling interest rates are boosting growth, although continuing economic uncertainty is hampering it.
Unemployment in Finland was a concern in 2025, with unemployment reaching record levels. The unemployment rate in April was 9.2%, well above the past decade's average.
According to the Bank of Finland, Finland’s financial system has remained stable despite increasing international uncertainty. The business loan stock ranged from about EUR 10 billion to almost EUR 15 billion in 2020–2024. New loans accounted for 53–56% of all SME loans during this period.
The average interest paid by SMEs was 4.54% in 2024, compared with 3.87% in 2022 and 5.8% in 2023. The interest rate for large firms peaked at 4.89% in 2023, while the average in 2024 was 3.98%. The credit spread between small and large business loans has narrowed in recent years, peaking at 1.1% in 2022 and declining to 0.56% in 2024.
Public financing from actors such as Finnvera, Business Finland and ELY Centres remains the most important alternative to bank loans. About one in five enterprises seeking financing turn to Finnvera, and its guarantees are increasingly required for bank loans. Nearly one third of enterprises reported guarantees as a condition for funding, rising to about 75% for strongly growth-oriented firms and 44% for small enterprises (10–19 employees)
The average length of B2B payment delays has increased, reaching 17 days in 2024, equal to the 2020 peak. Delays fell in 2021–2022 before increasing again in 2023, and payment periods remain longer than before 2020.
Bankruptcies totalled 3 488 in 2024, the highest in 2008–2024, rising for four consecutive years since 2021. The increase peaked in 2023 (almost 25%), slowed to 5.2% in 2024. The number of bankruptcies continued to grow during the early months of 2025, with the total potentially expected to reach record levels.
Financing collected by Finnish start-ups decreased sharply in 2023 to EUR 896 million, about half of the 2022 level, but recovered to about EUR 1.4 billion in 2024 (EUR 1.7 billion in 2022). Private VC financing has declined since 2022 (EUR 1.15 billion), falling to about EUR 980 million in 2023 and almost EUR 700 million in 2024. Overall, start-up financing has grown significantly over the past decade. The investment strategy of Finnish Industry Investment Ltd (Tesi) for 2025–2029 aims to ease access to VC financing, especially where private funding is limited.
According to the OECD report Benchmarking Government Support for Venture Capital, Finland has played a central role in building its VC ecosystem through public support, but challenges remain in growth-stage financing and internationalisation.
The Finnish economy is recovering from a recent recession, but growth is expected to remain modest following a series of shocks in the 2020s, including the COVID-19 pandemic, geopolitical tensions, inflation, rising interest rates, and higher energy prices, which slowed GDP growth from 2.7% in 2021 to 0.8% in 2022 before contractions of 0.9% in 2023 and 0.1% in 2024.
Most forecasts expect the economy to return to growth, supported by slower inflation and falling interest rates, improving purchasing power, although uncertainty still hampers consumption. Investments are expected to grow faster, driven by construction recovery and energy transition and defence projects in 2025–2027. The Ministry of Finance projects GDP growth of 1% in 2025, 1.5% in 2026 and 1.7% in 2027. Global trade uncertainty is hindering growth, while defence and infrastructure spending in Europe boost demand.
Employment and unemployment were a concern in 2025: the employment rate (20–64) was 76.2% in April, above the ten-year average, while unemployment was 9.2%, also well above the past decade average.
Most enterprises in Finland are micro- or small enterprises. According to Statistics Finland, in 2023, Finland had about 455,265 enterprises, and small and medium-sized enterprises (including micro-enterprises) accounted for 99.9% (454,583) of this total (excl. agriculture, forestry and fisheries).
According to the Labour Force Survey, there were a total of about 254 000 entrepreneurs in Finland in 2024 (excluding agriculture, forestry and fisheries), and of them about 72% were self-employed without employees (180 000) and about 28% were employers (70 000 persons). According to Statistics Finland, a total of 41,600 enterprises started in Finland in 2023 which accounts for 8.6% of all enterprises. In the same year, a total of 31 400 enterprises closed which accounts for 6.5% of all businesses. The number of enterprises starting was one per cent higher than in 2022, and enterprises closing down 12% was higher than.
According to Statistics Finland, the turnover of Finnish enterprises totalled about EUR 544.4 billion in 2023 (excl. agriculture, forestry and fisheries). This is an increase of about EUR 78 billion compared to 2021 (excl. agriculture, forestry and fisheries). SMEs accounted for 58.7% of the enterprise sector turnover when agriculture, forestry and fisheries as well as other than self-employed employers are included in the total.
By firm size
Source: Statistics Finland (Structural business and financial statement statistics). Data includes all industries (excluding the agriculture, forestry, and fishing industries p) Changes in statistics 1: The group of statistical units in the structural business and financial statement statistics have been expanded starting from the statistical reference year 2021. The expansion of statistical units has been carried out as part of the implementation of the new EU Regulation on European Business Statistics (EBS).
Changes in statistics 2: Starting from the statistical reference year 2021, the data on the number of personnel has been calculated with a new method, causing a break in the time series between 2020 and 2021. The renewal decreases the number of personnel by around 136 000 persons (9.0 %).
The volume of new lending to SMEs has varied between EUR 10 billion and almost EUR 15 billion in the period 2020–2024. Due to changes in the Bank of Finland’s statistical sources, the statistics compiled after 2020 are no longer comparable with earlier figures. New loans granted to SMEs peaked in 2021 at EUR 14.7 billion) and were at their lowest levels in 2023 at EUR 10.6 billion. In 2024, new loans granted to SMEs totalled EUR 12.7 billion, which was about two billion euros more than in 2023. New loans accounted for between 53% and 56% of all loans granted to SMEs in the period 2020–2024. The percentage was at its highest in 2024 at 56%.
New lending to enterprises in the period 2020–2024 peaked in 2021, totalling EUR 28 billion. The total volume of new loans has been on the decline since 2021, except for the year 2024 when new loans increased to nearly EUR 23 billion from EUR 20 billion in 2023. Because of statistical changes, comparisons with earlier years are no longer possible. Short-term loans accounted for between 20% and 30% of all loans granted to SMEs in the period 2020–2024. The level was at its highest in 2023 at 30.5% it decreased slightly in 2024 to 25.5%. The short-term loan stock of SMEs varied between EUR 3 billion and EUR 3.3 billion in the same period. In 2024, short-term loans totalled EUR 3.2 billion.
The number of direct government loans granted to SMEs has been on the increase in recent years 2021-2024 (excl. 2022), even though levels are still below peak years, particularly before the 2010sfor example direct government loans totalled EUR 453 million in 2008 Direct government loans reached their highest level in 2021 when they totalled EUR 148 million. Government loan guarantees increased gradually up to 2019, followed by a sharp peak at EUR 1.1 billion in 2020. Since then, they have declined and stabilised at a lower level, at around EUR 670–685 million in 2023–2024.
In 2024, Finnvera granted a total of EUR 73 million and in 2023 a total of EUR 36 million in climate and digital loans using the InvestEU guarantee programme. The loans are intended for green transition and digitalisation projects. The first such loans were granted in June 2023, and under the guarantee agreement concluded between Finnvera and the European Investment Fund (EIF) in July 2025, they will also be available in the future on a broader basis. On the other hand, the introduction of EU guarantee programmes for SMEs has increased the availability of bank-intermediated SME loans and reduced demand for Finnvera loans. Finnvera also launched a six-month loan pilot for growth projects of micro-enterprises in October 2024. A total of EUR 30 million in loans were granted during the pilot. The lessons learned from the pilot are being assessed and the assessment is expected to be completed during 2025.
According to the autumn 2024 SME barometer, the growth prospects for SMEs have varied after the exceptional period. Growth expectations among SMEs have improved substantially after the negative first months of 2024. Low inflation, falling interest rates, the successful phasing out of Russian energy imports and the severing of trade links with Russia turned the deeply negative expectations of the spring months into optimism.
The average interest rate on small loans (loans of up to one million euros), which is used as the interest rate indicator for loans granted to SMEs, decreased between 2011 and 2020 (to 2.03%). Since then, the interest rates have risen again. The average interest paid by SMEs rose to 3.87% in 2022 and reached record levels of 5.8% in 2023. Since then, it has decreased slightly to 4.54% in 2024. The credit spread between small and large business loans is an indication of stricter terms for SME loans compared to loans granted to large firms, and there is evidence of gradually normalising conditions. In 2020, the interest rate spread stood at the low level of 0.54%. The interest rate spread widened substantially in 2021, standing at 1.4%. The spread was substantial in 2022 (1.1%) and 2023 (0.91%). Since then, the interest rate spread has returned to lower levels and stood at 0.56% in 2024.
According to the SME barometer (2/2024), Finnvera’s role as a provider of alternatives to bank loans and an actor complementing bank lending has weakened slightly. However, nearly one firm in five planning to seek financing says that it will seek loans from Finnvera. Nearly one third (32%) of all firms seeking bank financing reported that Finnvera’s guarantees were a condition for funding.
The findings of the SME barometer 2/2024 show that the gradual diversification of business financing in recent years has experienced a setback. It seems that entrepreneurs are now more dependent on the financial services offered by banks than in the past. This development poses issues due to traditional banking services becoming less accessible to enterprises. Therefore, new types of financing are needed for SMEs in Finland.
A key concern is that, among emerging sources of finance, only small‑loan providers have gained prominence. According to the SME Barometer, approximately 5% of SMEs have used such services. Although the increase has been gradual, it underscores the limited diversification of SME financing options. While this type of financing may meet the needs of certain firms, the terms vary considerably and, in some cases, involve exceptionally high interest rates. Unlike consumer credit, interest rates on business loans provided by small‑loan companies are not subject to equivalent regulatory constraints.
Nearly two-thirds (65%) of all Finnish enterprises received bank financing during the last financial year, which is significantly below the EU average (81%). Only a very small proportion of Finnish enterprises that sought financing were granted bank financing on interest subsidy terms. This is significantly below the EU average and less than in any other EU country. According to the SME Barometer 2025, the availability of financing has weakened overall, although it shows slight improvement compared with the previous autumn. The share of SMEs using external financing increased to 22% over the past 12 months, while 8% reported not applying for financing despite need. At the same time, only 5% of applicants received a negative decision, suggesting that some firms refrain from applying due to tight collateral requirements (25%), high cost of financing (22%) and perceived weak availability of finance (21%) (SME Barometer 2025
Finnish enterprises are the sixth-most affected companies in the EU in terms of financing difficulties and they are facing such difficulties more often than companies in the EU on average. In most of the enterprises experiencing financing difficulties, the problem arises when an enterprise has sought financing, but the application has been rejected (EIB, Investment survey 2024).
Rejected loan applications accounted for about 6% of all loan applications in Finland in 2019 but the figure rose to 8.9% in 2020, and further growth was recorded in 2023 and 2024. In 2024, a total of 12.1% of all loan applications were rejected.
However, overall access to financing is not the most serious obstacle to the growth of Finnish SMEs. The situation has remained unchanged for many years. According to the SME barometer 2/2024, the state of the Finnish economy was by far the most common obstacle to the growth of SMEs, reported by 38% of companies. Access to financing seems to be an obstacle to growth for only 7% of all SMEs.
According to the Finnish Venture Capital Association (FVCA), venture capital grew from EUR 247 million in 2015 to EUR 1.4 billion in 2024, despite a decline in 2023 following the 2021–2022 peak (EUR 1.66 billion in 2022). Investment fell to EUR 896 million in 2023 before recovering in 2024, when Finland outperformed most European countries. Private venture capital investment, however, has declined since 2022 (EUR 1.15 billion), falling to about EUR 980 million in 2023 and almost EUR 700 million in 2024.
In euro terms, inputs by domestic investors have remained broadly stable in the 2020s, while large financing rounds by foreign investors drive annual variation. Foreign investment peaked at nearly EUR 1.3 billion in 2022 and reached EUR 957 million in 2024 (EUR 564 million in 2023). Investments by Finnish venture capital and growth funds remained stable at around EUR 214–216 million, while business angel investments declined to EUR 32 million. Other foreign and domestic investors increased their investments, reaching EUR 726 million and EUR 223 million, respectively, in 2024 (FVCA, 2025).
Table 4 shows that venture capital investments and growth investments with a venture capital background have increased over a ten‑year period, particularly in early-stage investments, with steady growth despite the recent slowdown. (Thus, growth investments resembling buyout investments in better-established growth companies are excluded from the analysis. In 2024, start-ups received EUR 445 million in venture capital, split between domestic (EUR 214 million) and foreign investors (EUR 231 million), across a record 208 firms, with a strong concentration in ICT (42%) (Finnish Venture Capital Association & EDC, 2025).
However, access to financing remains a key constraint: the small size of domestic funds limits participation in later-stage and scale-up financing, increasing reliance on foreign investors, while economic instability and subdued exit markets continue to hamper improvement (FVCA & EDC, 2025; Ministry of Economic Affairs and Employment, 2025).
Source: Finnish Venture Capital Association (FVCA).
Table 3 describes the equity-type financing collected by Finnish start-ups each year. Both venture capital investments and other types of equity financing are included.
By stage of investment, in millions of EUR
Source: Finnish Venture Capital Association & EDC
Finnish financing applicants raised a total of EUR 23.8 million in crowdfunding and peer-to-peer financing in 2024. This is in sharp contrast to the peak year 2021 when a total of EUR 377 million was raised.
In 2024, a total of EUR 23.8 million in financing was forwarded to domestic operators on crowdfunding platforms registered in Finland. This was the lowest figure recorded during the period that statistics have been compiled (2017–2024). Crowdfunding decreased substantially (66.3%) compared to 2023.
According to the SME barometer 1/2025, the year 2024 was a challenging period for many SMEs due to economic growth failing to materialise as the year progressed. Payment problems experienced by SMEs reached record levels during the second half of the year when 20% of enterprises reported problems in managing payments during the preceding three months. The situation eased somewhat during the first half of 2025 when 18% of SMEs reported problems in managing payments during the preceding three months. (SME barometer 1/2025).
The average length of B2B payment delays has been on the increase for several years. In 2024, the average was 17 days. The previous peak (17 days) for payment delays was recorded in 2020 in the aftermath of the COVID-19 pandemic and during the economic downturn. After that, there was a marked improvement in the situation and payment delays decreased to 11 days in 2021 and to 10 days in 2022. However, the payment delay average has risen since then, reaching 14 days in 2023. Payment periods are also significantly longer than before 2020 (Intrum, European Payment Report 2025, Finland).
According to Intrum’s European Payment Reports, Finnish enterprises have traditionally paid their invoices on time and Finland has often done excellently in European comparisons of payment discipline. However, the economic challenges of recent years, such as inflation, high borrowing costs and geopolitical instability have led to increased payment delays in Finland.
The number of bankruptcies totalled 3,488 in 2024, which was the highest figure in the review period 2008–2024, and bankruptcies have increased for four successive years. The number of bankruptcies started to grow in 2021 and the highest growth rate was recorded in 2023. That year, bankruptcies in Finland increased by 24.8%, but the growth rate slowed down to 5.2% in 2024. However, the figures for the first months of 2025 suggest that the number of bankruptcies is still on the increase if the trend recorded in the early part of the year continues.
There are three financing companies owned by the State of Finland that provide financing for start-ups and SMEs. Finnvera plc and Business Finland provide unsecured loans, guarantees and grants. Finnish Industry Investment Ltd (Tesi) operates in the venture capital investment market using equity-type financial instruments. To enhance the efficiency of the venture capital investment activities managed by the State of Finland, the operations have been made the sole responsibility of Tesi.
The State of Finland also owns the VTT Technical Research Centre of Finland Ltd. Its task is to act as an independent research institute promoting broad-based use of research and technology and their commercialisation in business and society at large. The purpose of the company is not to generate a profit.
At the end of 2024, Finnvera had 21,100 customers of which 84.4% were micro-enterprises, 15.1% other SMEs and midcap enterprises and 0.5% were large firms. In May 2020, the Finnish Parliament raised Finnvera’s domestic credit and guarantee authorisation from a maximum of EUR 4.2 billion to EUR 12 billion. This gave a significant boost to Finnvera’s capacity to grant COVID-19 financing. Finnvera gave a signal to the market that guarantees and loans are available when needed. In 2020, the State of Finland temporarily raised the compensation for credit and guarantee losses paid to Finnvera from 50% to 80%. The loss compensation was returned to 50% as of 1 January 2023. Finnvera has shifted its focus to guarantees as the loan stock has decreased in recent years. In 2024, Finnvera granted EUR 685 million in guarantees to SMEs.
Finnvera wants to encourage enterprises to use the growth opportunities arising from the clean transition and digitalisation. The demand for the climate and environmental loans and the digitalisation and innovation loans guaranteed under the InvestEU programme increased as expected in 2024 and a total of EUR 73 million in financing was granted in co-operation with the European Investment Fund.
EUR million
Source: Finnvera, Annual Reports 2009–2024. Finnvera introduced the European Investment Bank’s (EIB) Pan-European Guarantee Fund (EGF) programme in April 2021, and it continued until the end of 2022. Under the programme, Finnvera provided loans of more than EUR 300 million to Finnish large and medium-sized enterprises with a 75% EIB guarantee. Finnvera also served as an implementing partner in the Alternative Fuels Infrastructure Facility (AFIF) as part of the CEF programme of the European Commission.
Finnvera plc is a specialised financing company owned by the State of Finland and its task is to complement the financial markets and support the growth, internationalisation and renewal of Finnish enterprises with loans, guarantees and export guarantees. Most of Finnvera’s financing is channelled to support SMEs and growth-oriented actors, with a focus on sustainable development, digitalisation and promotion of exports. Finnvera uses a broad range of financing instruments, such as guarantees, direct loans and special loans supported by EU programmes to ensure that enterprises have the resources for growth and for boosting their competence in a changing operating environment. In 2024, Finnvera granted a total of EUR 1,076 million in financing and EUR 339 million of this sum went to micro-enterprises (excl. export guarantees).
In October 2024, Finnvera launched a growth programme pilot for micro-enterprises in response to the bottlenecks identified in the financial markets. The pilot was carried out between 1 October 2024 and 31 March 2025 and during the pilot a total of EUR 30 million in loans was granted to about 440 micro-enterprises. The size of the loans varied between EUR 20 000 and EUR 50N000 and most of them were granted to enterprises defined as micro-enterprises by the EU (fewer than ten employees and turnover or balance sheet total no more than two million euros).
The pilot was prompted by the observation that in Finland, micro-enterprises have less access to financing than in other Nordic countries. According to SME barometers, the proportion of enterprises experiencing financing problems has remained high, and small and young enterprises in particular find it difficult to obtain financing on reasonable terms. This is partially the result of the tighter credit policy of financial institutions and transaction costs arising from regulation, which make small loans less attractive to financiers.
The aim of the pilot was to support the growth, productivity and competitiveness of micro-enterprises, especially in situations where financing is needed for other than day-to-day operations, such as the hiring of employees, expansion of activities or digitalisation of business operations. About 30% of the financing decisions concerned women entrepreneurs, especially in the service sector (such as business executive services, retail trade and accommodation and catering services).
The pilot is based on the Programme of the Finnish Government for the period 2023–2027, in which consistent industrial and entrepreneurship policy, dismantling of obstacles to growth and the development of the world’s best start-up and growth company ecosystem is emphasised. The Government Programme 2023–2027 identifies financing bottlenecks as the key obstacle to growth, and the role of Finnvera is to complement the markets (and not to compete with banks) and to ensure that even the smallest enterprises are provided with opportunities for growth.
Finnvera plc’s micro-enterprise pilot project prompted discussion in Finland on the functioning of the financial markets and especially on the financing available to growth-oriented micro-enterprises. According to Finnvera, well-functioning financial markets ensure that enterprises of all sizes can grow. A comprehensive assessment of the pilot project will be produced in 2025. Finnvera’s task is not to compete with banks but to complement the financial markets in accordance with its strategy.
Finnvera plc is undergoing a reform based on the Programme of the Finnish Government for the period 2023–2027. Under the reform, the company’s structures for promoting exports will be strengthened and the legislation on the company will be overhauled. According to the fiscal policy part of the Government Programme, the Government also takes seriously the risks to general government finances arising from guarantee liabilities. It is also stated in the document that the process of evaluating and granting government guarantees will be developed so that risks can be taken into account more comprehensively. The legislative overhaul has been carried out within the framework of these objectives.
The above-mentioned legislative reforms will be carried out as a legislative codification in which the content of the ten acts regulating the activities of Finnvera plc and Suomen Vientiluotto Oy will be replaced with a single piece of legislation stating the content in a more concise form. The legislative codification is based on the fact that the key pieces of legislation have been amended several times since their entry into force. This has led to a situation where the legislative package guiding the operations has become somewhat fragmented. The fragmented legislative structure has made the laws less effective as the regulation has become too detailed and too vague. The purpose of the more concise and open legislative text is, for example, to serve as a basis for the introduction of new products and instruments providing more effective support to growth and to improve operating and decision-making processes, which will benefit the company’s ownership steering, management and board of directors. In this manner, Finnvera plc would be better placed to act effectively as a specialised financing company of the State of Finland and to carry out its business and industrial policy tasks. This would be in response to the objectives set out in the Programme of the Finnish Government for the period 2023–2027 referred to above to strengthen Finnvera plc’s export promotion structures and its role as an actor supporting exports.
The focus in the implementation of this legislative overhaul is to simplify the legislative structures, streamline the administration and to achieve a higher level of administrative efficiency. As part of the legislative project, it has also been necessary to develop the regulation of the financial supervision of Finnvera plc. It is proposed in the legislative project that the financial supervision of the company should be transferred to the responsibility of the Financial Supervisory Authority.
The legislative project is currently (autumn 2025) under consideration in the Finnish Parliament. The new legislation is scheduled to enter into force on 1 January 2026 with the exception that the provisions on financial supervision would enter into force 24 months after the entry into force of the act.
Business Finland is an organisation owned by the State of Finland supporting the growth, internationalisation and innovation activities of Finnish enterprises. It provides financing and internationalisation services, promotes investments and develops tourism (for more details see below).
The aim of Business Finland is to
encourage innovations and technological development
support companies in internationalisation and exports
attract investments and tourists to Finland
strengthen Finland’s competitiveness and promote business renewal.
Business Finland provided a total of EUR 610 million in financing in 2024. R&D financing for enterprises accounted for EUR 383 million and for research organisations for EUR 177 million of this total. Other than R&D financing accounted for EUR 50 million of the funding provided by Business Finland. Grants accounted for 74% and loans for 26% of the RDI financing provided by Business Finland. A total of 43% of the financing went to the development of products, services, processes, methods and software, and the remaining 57% went to other development work. In addition to R&D financing, Business Finland’s financial services also cover other innovation and business financing services. These include production incentives for the AV sector, Tempo, young innovative companies, Exhibition Explorer and Market Explorer. Other than R&D financing provided by Business Finland has been cut and Business Finland has been forced to discontinue some of its financial services.
The growing R&D inputs of the large firms participating in the Veturi programme are highlighted in the current market situation. However, further measures are needed to increase the number of ambitious start-ups and SMEs aiming at international growth. R&D inputs of large firms are on the increase and this is particularly the case with the companies taking part in Veturi projects. Business Finland has provided financing for 30 Veturi ecosystems by March 2025. Veturi companies have pledged to boost their own R&D investments in Finland by EUR 2.4 billion. The Veturi assessment shows that companies have invested in research, development and innovations through ecosystem projects. 88% large firms have focused on innovations that are revolutionary or partially revolutionary.
Demand for financing for start-up customers has increased. In 2024, the number of start-up R&D projects provided with financing increased by 40% compared to 2023 and in euro terms, the increase was 30%. Financing has returned to 2021 levels. Growth in the demand by young enterprises established in 2023 and 2024 is a particularly noticeable feature of the overall demand for start-up financing. Most new start-ups are now established in university cities, in the software, health and energy sectors. Research-based deep technology start-ups are seen as having particularly significant potential and interest in Research to Business (R2B) projects and start-up activities have been on the increase. The number of spin-off enterprises has been at the level of 20 start-ups in recent years. According to universities and research institutes, there is potential for a significant increase in the number of deep technology start-ups in the coming years.
R&D financing will be boosted substantially in the coming years as the aim is to raise the share of R&D to 4% of GDP. To ensure the commercialisation of R&D results, an adequate level of innovation financing must also be secured because it will ensure the commercialisation of the solutions into international business. Furthermore, during the scaling stage, growth companies need financing for building industrial-scale production and boosting expansion of international operations.
The task of the Finnish Industry Investment Ltd (Tesi) is to use equity-type financing to promote the growth and internationalisation of Finnish enterprises and to develop Finland’s VC and PE markets. The State of Finland has taken measures to make its venture capital investments more efficient and since the end of May 2025, they have been the sole responsibility of Tesi. Tesi’s investment capacity and industrial policy role have been strengthened as part of the company’s new investment strategy (for more details, see below).
The aim of Tesi is to make more private equity available to innovative growth companies by offering complementary financing. Tesi makes market-based investments in venture capital investment funds and directly in the target companies in co-operation with private investors.
Tesi manages five funds of growth funds in which investments are made by Tesi and Finnish insurance and pension companies. The funds of growth funds make investments in venture capital investment funds operating in Finland which invest in Finnish growth companies. In 2024, Tesi made new investment commitments totalling EUR 116 million (EUR 235 million in 2023). At the end of 2024, the company had about 118 target funds, 106 direct target companies and five funds of funds.
Under the Programme of the Finnish Government for the period 2023–2027, the State’s domestic venture capital investment and business financing activities will be enhanced by merging Business Finland Venture Capital Oy, Ilmastorahasto Oy (the Climate Fund) and Oppiva Invest Oy under the ownership of Finnish Industry Investment Ltd (Tesi). The project was completed at the end of May 2025 as the relevant legislation entered into force and the necessary corporate arrangements were carried out. In this corporate arrangement, the remaining assets and liabilities of three state-owned companies were merged with the Tesi group. Management of Business Finland Venture Capital’s investment portfolio containing state aid activities was transferred to Teollisuustuki Oy, a Tesi subsidiary, which acts as the body granting state aid financing.
The aim of Tesi’s new investment strategy and the economic framework of its activities is to strengthen the company’s industrial policy role. The company will assume a stronger role as a market-based minority investor. Its growing investment capacity will boost economic growth, renewal and investments in Finland. In addition to its own investment activities, the aim of Tesi is also to significantly leverage both national and international financing in Finnish growth companies, new industrial growth sectors (such as dual use and defence) and in venture capital investment funds. Through its activities, Tesi also strengthens domestic ownership.
Tesi is a minority investor operating on market terms and it carries out investments together with private investors, and it’s investment capacity for the period 2025–2029 totals about EUR 1.8 billion. When private and EU financing are leveraged, this could mean investments totalling EUR 14 billion. Tesi boosts the commercialisation, scaling and exports of internationally competitive innovations by investing in domestic start-up and growth companies. In the future, the company will also fund new industrial-scale projects with the aim of building new industries in Finland that use new clean energy and boost the clean transition. Tesi will continue the development of venture capital investment markets by making investments in funds to enhance market access to private equity.
The following are the key elements of the Tesi reform:
Direct investments will grow, and financing of industrial-scale investments and more substantial inputs in scalable growth of technology enterprises will be introduced as new tasks.
In the development of the venture capital investment market, investments in funds will be on a more selective basis, and they will focus more on existing market bottlenecks while at the same time consideration will be given to changes in the market. Tesi will also work to create new high-quality funds on an international scale in Finland to strengthen access to private venture capital financing. The investment strategy does not categorically exclude any types of funds.
The more detailed investment allocation will be shaped by the market situation and prevailing needs. Tesi will continue to make market-based venture capital investments on the same terms as private investors. Tesi will not compete with private investors and will withdraw if competition arises.
VTT Technical Research Centre of Finland Ltd is a non-profit limited liability company wholly owned by the State of Finland. VTT is one of the leading research organisations in Europe. Encouraging the use and commercialisation of research and technology in business and society at large are its special tasks. In co-operation with its customers and other research partners, VTT works to solve major societal challenges of our time, such as climate change, adequacy of resources, renewal of industries and the comprehensive security of society, and to create sustainable growth, jobs and wellbeing.
Finland’s national innovation infrastructure is to a great extent based on VTT’s state-of-the-art research infrastructure and development environments. They also provide enterprises with good opportunities for the shared use of infrastructure and the development of new export products and services.
VTT’s mission is to create maximum global impact with the technologies and solutions it has developed. Commercialising research through high-quality spin-off enterprises is one of the key instruments to achieve this.
VTT LaunchPad, established in 2019, acts as an incubator for ambitious spin-off enterprises working to solve global challenges through technology. The purpose of LaunchPad is to develop internationally scalable start-ups based on VTT’s intellectual property rights that are eligible for risk financing. LaunchPad combines VTT’s researchers and technologies with IPR’s business talent and investors.
Participants must join LaunchPad before their enterprises has been established. The business idea must aim at international impact and it must be based on spinnable VTT-owned IPR. The business idea must have market potential, be based on demonstrated technology, be scalable and have a positive impact on customers and society.
VTT’s technology will be transferred as assets in kind in exchange for the enterprise’s shares. Most of the IPR investments will be made in venture capital investment rounds in which VTT Holding Oy participates as an investor. The value of the IPR to be transferred is assessed by external experts.
Between 2020 and 2024, VTT’s spin-off enterprises collected 10.5% (EUR 207 million) of all equity invested in Finnish start-ups. In 2024, a total of 19% of all equity capital invested in Finnish start-ups were channelled to 16 VTT-based spin-off enterprises. Nine of these start-ups have been developed in the VTT LaunchPad.
VTT LaunchPad focuses on the commercialisation of research-based innovations, which has been one of the bottlenecks of the Finnish innovation system. Internationally, LaunchPad can be compared with such programmes as the German Fraunhofer Venture programme. In 2024, the Financial Times chose VTT LaunchPad as one of the leading European start-up incubators.
VTT and Finland’s start-up community have jointly compiled a VTT spin-offs report, and according to this publication, long-term research work has been transformed into technology companies. They attract private venture capital investments, create jobs and boost private investments in research and development activities. VTT-based enterprises develop innovative solutions in such areas as food production, quantum computing and biotechnology.
Source: See Table 2
References
Bank of Finland Bulletin 4/2025
Bank of Finland, Forecast for the Finnish Economy – 6/2025
EIB, Investment survey 2024, European Union overview
Intrum, European Payment Report 2025, Finland
Ministry of Economic Affairs and Employment, Current state of growth financing and funding in Finland 2025 (in Finnish)
Ministry of Finance, Economic Survey, Summer 2025, Economic Prospects
Publications of the Finnish Government 2024: Government resolution on entrepreneurship, issued on 5 September 2024 (in Finnish)
SME barometer 2/2024 and 1/2025 (in Finnish)
This work is published under the responsibility of the Secretary-General of the OECD. The opinions expressed and arguments employed herein do not necessarily reflect the official views of the Member countries of the OECD.
This document, as well as any data and map included herein, are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area.
The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law.
Note by the Republic of Türkiye
The information in this document with reference to “Cyprus” relates to the southern part of the Island. There is no single authority representing both Turkish and Greek Cypriot people on the Island. Türkiye recognises the Turkish Republic of Northern Cyprus (TRNC). Until a lasting and equitable solution is found within the context of the United Nations, Türkiye shall preserve its position concerning the “Cyprus issue”.
Note by all the European Union Member States of the OECD and the European Union
The Republic of Cyprus is recognised by all members of the United Nations with the exception of Türkiye. The information in this document relates to the area under the effective control of the Government of the Republic of Cyprus.
© OECD 2026
Attribution 4.0 International (CC BY 4.0)
This work is made available under the Creative Commons Attribution 4.0 International licence. By using this work, you accept to be bound by the terms of this licence (https://creativecommons.org/licenses/by/4.0/).
Attribution – you must cite the work.
Translations – you must cite the original work, identify changes to the original and add the following text: In the event of any discrepancy between the original work and the translation, only the text of original work should be considered valid.
Adaptations – you must cite the original work and add the following text: This is an adaptation of an original work by the OECD. The opinions expressed and arguments employed in this adaptation should not be reported as representing the official views of the OECD or of its Member countries.
Third-party material – the licence does not apply to third-party material in the work. If using such material, you are responsible for obtaining permission from the third party and for any claims of infringement.
You must not use the OECD logo, visual identity or cover image without express permission or suggest the OECD endorses your use of the work.
Any dispute arising under this licence shall be settled by arbitration in accordance with the Permanent Court of Arbitration (PCA) Arbitration Rules 2012. The seat of arbitration shall be Paris (France). The number of arbitrators shall be one.