Varma provided over €1 billion in funding for Finnish growth companies in five years

The landscape for Finnish growth companies has changed substantially in recent years. More and more companies have international growth potential and the prerequisites to become market leaders in their field, both within and outside of Europe.  

Varma has increased its investments in Finnish growth companies in the past few years. At the same time, the share of direct equity investments has also grown. In the past 18 months alone, Varma invested roughly EUR 300 million in Finnish growth companies through equity financing.  

– In recent years, we have deliberately taken a more active approach to Finnish growth companies, particularly as a direct investor, complementing our already strong fund portfolio. By backing promising domestic companies early enough, we aim to ensure Varma is involved in their growth for the long haul. Our investment decisions always start with quality that holds up to international comparison and long-term return potential, says Varma’s Head of Private Equity and Debt, Tommi Walther. 

Varma’s growth investments focus on high-tech companies 

Many of the growth companies in Varma’s investment portfolio began as startups in the 2010s. Over the past decade, they have grown and evolved. Companies’ financing options have become more diverse, and going public has emerged as one possible next phase of growth.  

– The number and scale of Finnish companies that we are interested in as an investor have grown over the past few years. Since the pool of investees is larger and the companies are stronger than before, the conditions for making more significant investments have also improved. Consequently, investing in growth companies is a very natural progression for Varma nowadays, says Walther. 

Varma has invested in, among others, the quantum computer company IQM, the space intelligence company Iceye, the defence technology company Sensofusion, and the satellite company ReOrbit. Varma recently made an follow-on investment of over EUR 50 million in cloud services company Verda in a funding round that lifted Verda’s valuation above USD 1 billion, making it a unicorn. 

A common thread among the investee companies is a high-tech profile and robust R&D focus. Their solutions are used, for instance, in satellites, intelligence, data processing, industry, and energy systems. 

Long-term involvement supports the company through different stages of growth 

At Varma, every investment undergoes rigorous screening to ensure the investment criteria set for growth companies are met. The goal is for Varma to remain an investor in the company at later stages, as this long-term commitment makes it possible to support investees throughout their growth journey. 

– We are proud to be part of the growth stories of Finnish high-tech companies. When a company can rise to become a world-leading operator in its field, it also means major return potential for the investor, says Walther. 

Growth investments are aligned with Varma’s goal of seeking long-term returns on pension assets through risk diversification. Varma’s strong solvency provides a good starting point for active participation in the return-driven investment environment of growth companies. 

Around 20 per cent of Varma’s investments assets are allocated to Finland. 

Additional information: 

Tommi Walther, Head of Private Equity and Debt, tel. +358 40 5019 975 or tommi.walther(at)varma.fi 

Marjut Tervola, Communications Manager, tel +358 45 673 0120