19.4.2023

Certainty is now an asset in the investment market

During the past year there has been uncertainty in the market, and in the last few weeks the challenges of the banking sector have reached Europe as well. Private equity investors have, however, remained active. Investors have particularly favoured the energy and financial sectors – as well as listed companies and large deals. In addition, international real-time economy has formed an exception in the otherwise uncertain market: even though Europe is in the middle of a crisis, small technology companies with wide international networks have managed to raise financing as the market has been more stable outside Europe.  

Listing projects have also been on hold in many companies, waiting for steadier times. The economic uncertainty has reduced valuations and made pricing difficult, which has caused companies to postpone their listings. In order for the number of listings to start increasing again, companies need a solid basis for the market forecast: companies have to be able to trust that the valuation stays stable and that buyer candidates can commit to the tenders they submit.

There is, however, a positive trend in the listing market. If inflation and interest rates settle down and valuations stay reasonable, it is possible that listing activity starts to increase again during the second half of the year, which also makes it easier for private equity investors to exit.

It seems that after the winter the market continues to develop in the same direction as now: The financing and energy sectors remain attractive, and there may be a positive trend in the technology sector as well. Private equity investors focusing on buyouts will likely continue to be interested in large deals and shift more and more towards platform and add-on arrangements where the investor buys several small objects to build a larger and more efficient unit out of them.

For technology investors, the market can offer profitable investments in promising growth companies with well-reasoned valuations and more time with the management. For listing candidates, now is the time to build their capacity and prepare for when the market picks up again. There is never any extra time for it during a listing process.

Latest references

We represented Vapaus Bikes Finland Oy, a company offering employee benefit bikes, in its international EUR 10 million Series A funding round. The investors behind the funding are private equity investors Shift4Good and Superhero Capital Ltd as well as Tesi together with the European Guarantee Fund of the European Investment Bank. The equity-based funding will support the company’s international expansion, software development, platform automation, and the growth of its concept for the second-hand market of bikes. Vapaus Bikes Finland is at the forefront of sustainable mobility services and has been a pioneer in the Employee Benefit Bikes sector since late 2020. It has been ranked among Finland’s fastest growing companies. Shift4Good is an impact venture capital fund focused on the decarbonisation of the transportation sector. Tesi (officially Finnish Industry Investment Ltd) is a state-owned, market-driven investment company that invests in venture capital and private equity funds and directly in Finnish startups and growth companies.
Case published 21.8.2024
We advised Tesi (Finnish Industry Investment Ltd) in its investment in the heavy duty vehicles company Oy Sisu Auto Ab. With this investment, Tesi became an owner in the company with a share of 24.4 per cent. Sisu Auto is a pioneer in the Nordic market in the development of heavy duty vehicles. Sisu’s core competences are in the product development and production of trucks and military vehicles. Tesi is a state-owned, market-driven investment company that invests in venture capital and private equity funds and directly in Finnish startups and growth companies. The investments managed by Tesi total 2.1 billion euros.
Case published 19.8.2024
We advised Bionto Oy, a company offering industrial bio-solutions, in a financing arrangement where Korpi Capital made a EUR 4 million seed equity investment in the company. The execution of the investment requires that certain conditions specified in the investment documentation are met. Bionto is a Finnish early-stage biotechnology company that develops and produces sustainable, profitable and safe biotechnological solutions to support the green transition, business objectives and societal goals of various industrial operators.
Case published 8.7.2024
We acted as the Finnish legal advisor for BHP in connection with an exploration alliance agreement entered into between BHP and Kingsrose Mining Limited under which BHP (through a wholly owned subsidiary) will provide funding for regional mineral exploration across areas of interest in Finland. As part of the arrangement announced on 22 May 2024, BHP and Kingsrose entered into two exploration alliance agreements, focusing on nickel and copper exploration in specified regions in Finland and Norway. In Finland, the alliance agreement covers Kingsrose’s four exploration reservations at the Central Finland project in the Kotalahti Nickel Belt, a 400 kilometre long greenstone belt which hosts the past producing Hitura, Kotalahti and Enonkoski nickel mines. The alliances follow from Kingsrose’s successful participation in the BHP Xplor program, a global accelerator program targeting innovative, early-stage mineral exploration companies to find the critical resources necessary to drive the energy transition. BHP is the largest mining company in the world by market capitalisation, producing essential commodities through its assets, including iron ore, metallurgical coal, copper and nickel, and moving into potash.
Case published 4.7.2024