Innovestor holds first close for industrial fund

The firm claims the vehicle is the first in the Nordic and Baltic regions to focus exclusively on early-stage B2B industrial technology companies. It began fundraising in 2019 and is targeting a final close in February 2020. The fund has a hard-cap set at €100m.

The GP did not use a placement agent. The fund will follow market-standard terms and conditions, and will have a 10-year lifespan with a five-year investment period from 2020 to 2024.

Innovestor CEO Tommi Äijälä told Unquote that the fundraising process went fast and smoothly. The vehicle is Innovestor's third fund raised to date.

The GP said it identified a significant vacuum in its target market, with many promising startups at risk of going out of business despite having growth potential. A massive funding gap has developed for good series-A companies that are being overlooked or underfunded due to the lack of investors in the market, it said.

Investors
The fund currently has 20 LPs and anticipates adding a further 20 by the final close, Äijälä told Unquote. The LP base currently consists of institutional investors such as Mandatum Life, family offices, and high-net-worth individuals. A majority of the LPs are from Europe, with several investors coming from Asia.

The fund will target a 20% IRR for investors, said Äijälä.

Investments
The vehicle will deploy equity tickets of €500,000-4m and aims to invest in 25 businesses at the pre-series-A and series-A stages.

The fund will target companies in the Nordic and Baltic regions that focus on Industry 4.0, such as smart cities, cyber and physical security, and digital energy. Äijälä said that the vehicle's focus is extremely specific because adjacent mega-trends close to Industry 4.0, such as sustainability, connectivity and data security, are expected to grow in the long-term and require more support.

The fund will make its first investments as early as Q2 2020.

Äijälä also said that Innovestor is considering launching a new fund in the next few years.

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