& EU Funding Opportunities Software E-business Finland 3rd of November 2020 Grannenfelt Finance Eeva Grannenfelt [email protected] +358 50 5446 355 Kirsi Karjalainen [email protected] +358 50 341 9010 If you would like to receive our newsletter in the future, please inform us by sending email to [email protected]
pioneer in alternative investment. We offer tailored multi-strategy mandates to professional investors (institutional investors, family offices, foundations, pension and insurance companies), from Finland and other Nordic countries. AIM Capital is AIFM licensed and regulated by the Finnish Financial Supervisory Authority. The alternative funds under our management are based in Ireland. The company is a signatory to the UN Principles for Responsible Investment and has integrated an accountability perspective into its operations. It contributes to the implementation of the Principles of Responsible Investment, also for alternative funds. Founded in 2015, Grannenfelt Finance Oy is an independent financial solutions consulting company. Our clients are Finnish and Nordic SMEs/corporations as well financial institutions. We solve the financial challenges of our corporate clients by using various financial instruments that serve the client’s growth plan. Such include grants, debt and (quasi) equity from both the private and public sectors, including from the EU. We provide our institutional clients with expertise on how to leverage EU financial instruments for strategic and economic benefit. We advise e.g. banks and investors on different types of EU risk-sharing and securitization structures. Funding and structuring opportunities are increasingly offered outside the conventional banking and finance sector. We effectively combine such opportunities to serve the operational needs of our clients. AIM Capital Group is a Finnish company with two business areas: Financial Advisory and Asset Management. The company, formed in a merger in late 2019, serves both corporate and professional investors clients. Grannenfelt Finance AIM Capital F I N A N C I A L A D V I S O R Y S E R V I C E S A S S E T M A N A N A G E M E N T AIM Capital Group November 20 Grannenfelt Finance
mahdollistanut yrityksen kehittämisavustuksen myöntämisen ns. väliaikaisena valtiontukena, jonka yrityskohtainen enimmäismäärä on 800 000 euroa (de minimis-rajoitteen ulkopuolella). ▪ Kehittämisavustusta voivat nyt väliaikaisesti saada myös sellaiset yritykset, joille avustusta ei aiemmin olisi ollut mahdollista myöntää normaaliajan EU:n valtiontukisääntelyn 200 000 € de minimis -kiintiön täyttymisen vuoksi ▪ Muutokset ovat väliaikaisia ja ne ovat voimassa 19.10.-31.12.2020 ▪ Kyseessä ei ole uusi tukimuoto eikä yleistuki eli yrityksen kehittämisavustuksen myöntämisen edellytykset eivät ole muuttuneet ▪ Kehittämistoimenpiteisiin liittyviä palkka-, konsultointi-, matka-, messuosallistumis- ja vastaavia menoja voidaan tukea enintään 50 %:lla avustuksen perusteena olevista menoista ▪ HUOM! Palkkakustannuksiin voidaan lukea kaikkien niiden työntekijöiden palkat, keiden työajasta valtaosa kuluu uuden kehitysprojektin työtehtävissä (palkkakatto 4500 € Etelä-Suomen alueella, muualla Suomessa ”kohtuullistetaan”). Yli 10% yrityksen osakkeista omistavien henkilöiden palkkakustannuksia ei kuitenkaan voida huomioida. ▪ Pidämme tätä merkittävänä mahdollisuutena pk-yrityksille ja autamme tarvittaessa niin avustus- ja tukihakemuksien kuin muiden rahoitusprojektien kanssa. Tiimimme yhteystiedot löydät tämän esityksen lopusta. Grannenfelt Financen uutiskirje Rahoitusmarkkinoilla on viimeisen puolen vuoden aikana tapahtunut erityisen paljon muutoksia, jotka ovat ajoittain tulleet voimaan nopeallakin aikataululla. Oman yrityksen liiketoiminnan pyörittämisen lisäksi muutoksissa saattaa ajoittain olla vaikea pysyä ajan tasalla. Grannenfelt Finance seuraa tiiviisti rahoitusmarkkinoiden kehitystä ja tiedottaa ajankohtaisista muutoksista asiakkailleen uutiskirjeen muodossa. Jos haluat jatkossa vastaanottaa uutiskirjeen, välitättehän meille sähköpostiosoitteenne osoitteeseen [email protected] tai [email protected].
facts & figures We advise multiple stakeholders in EU-Funding November 20 Grannenfelt Finance Grannenfelt Finance Oy is an independent financial adviser focusing on EU-funding. Our clients are Finnish and Nordic SMEs/corporations and financial institutions. We advise our clients to raise funding in variety of forms including grants, debt and equity. Founded in 2015 provides financial advisory and capital raising services in the changing financial markets 360 m€ capital raised in grant, equity and debt capital transactions for our clients Over 100 Transactions carried out for Finnish and European clients (grant, debt and equity) 13 people team with over 200 years of experience from finance, industry, investments, re-structuring situations etc. Direct loans for SMEs & corporations EU Grant application processes, consortium and individual EU instruments for financial institutions EU funding & guarantees is our expertise. We are a leading EU funding advisor for corporates and institutions in the Nordics. 120 m€ of EU funding granted for our corporate clients
it will shape the funding market* November 20 Direct Equity Business Angels Banks Insurance Companies VC Funds TESI Finnvera Direct Loans Crowdfunding Seed Funds Direct Grants PE Funds Pension Funds Debt Funds 1. More money available 2. Cost of Capital decreases 3. Higher risk tolerance Finnish SME! Invest & Employ! Grannenfelt Finance
Banks ▪ Bank-focused market ▪ New operators haven’t broken to the market because of the banks ▪ The various support measures have favoured the bank- focused market for the past 3 years ▪ The SME market is extremely dependant of the regulatory changes ▪ If the credit policy is tightened further, a large portion of the project in development will remain unfinanced → there is a need for alternative financiers … which has left little room for alternative financiers to emerge November 20 ~70% Bank loans ~80% Controlled by 3 largest banks Market shares of credit institutions – Loans to non-financial corporations External funding of SMEs in Europe Highly bank centric market dominated by 3 largest players Grannenfelt Finance
Bodies in Finland ▪ Ilmastorahasto Oy (climate fund) • Investment strategy still unclear • Will operate under the Ministry of Economic Affairs and Employment (TEM) • Only direct investments to companies & funds ▪ Oppiva Invest • Operates under the Ministry of Education and Culture • Private equity investments to companies in the education industry ▪ Finnvera • Finnvera’s quarantees (Fast Track, SME quarantee & start quarantee) • Finnvera loan published 14.9.2020 • In co-operation with other funding partners • Meant for e.g. M&A activities ▪ TESI (Teollisuussijoitus) • New Venture Bridge programme: • 10% interest • 20% discount in the next emission • Stabilisation program for mid-sized companies (over 10M€) • 10% interest • 10% discount in the next emission ▪ Business Finland • Temporary RDI loan programme (corona crisis) • Easier loan terms in comparison to the regular RDI loan which are mainly aimed for exporting companies • The application period is extented until the end of November 2020 • No other new grant programmes are open on top of the “regular” November 20 Grannenfelt Finance
myös yrityksille, jotka ovat keväällä 2020 saaneet ns. korona-avustusta • HUOM! Tukea ei voi hakea samalle projektille ja hyväksyttää samoja kustannuksia kuin kevään ns. ”korona-avustuksessa” ▪ Haku alkoi 19.10. ja loppuu 31.12.2020 ja sitä haetaan ELY-keskusten kautta ▪ Yritys/konserni voi saada avustusta 800k euroon asti ▪ Valtiontuissa huomioitavaa on, että niitä säätelee normaali konsernirajoite: Jos yrityksillä on toisiinsa nähden osakeomistuksen tai päätöksenteon kautta määräysvalta, käsitetään nämä konserniin kuuluviksi tahoiksi • koko konsernin saamat avustukset voivat siis olla maksimissaan 800k€ ▪ Jatkossa myös vaikeuksissa vuoden 2020 alussa olleet yritykset (2019 tilinpäätös tappiollinen) voivat saada avustusta • Tukea myönnetään nyt pk-yrityksille, joiden liikevaihto/taseen loppusumma on maks. 10M€ ja työntekijöiden lukumäärä on alle 50 henkilöä ▪ Valmisteilla on yritysten kustannustukea koskeva ja sitä jatkava lakimuutos ▪ Lakimuutos tulee näillä näkymin voimaan joulukuussa 2020 ja suunnitelman mukaan haku avattaisiin yrityksille joulukuun lopussa ▪ Kustannustuen ehtona olisi edelleen, että sekä toimialan että yrityksen liikevaihto on laskenut merkittävästi • Aiemmassa kustannustukilaissa tukeen oikeuttavaksi toimialan liikevaihdon laskuksi määriteltiin 10 prosenttia ja yrityksen 30 prosenttia. Rajoja tarkastellaan uudelleen lakimuutoksen valmistelun aikana ja niitä voi olla perusteltua madaltaa, riippuen toimialojen liikevaihdon kehityksestä valittavalla tukikaudella. ▪ Tukea haetaan tälläkin kertaa Valtionkonttorin kautta Kehittämisavustusta myös ns. vaikeuksissa oleville yrityksille Yritysten kustannustuki uudistuu ja jatkuu November 20 Grannenfelt Finance
Overview ▪ EU priority sectors ▪ EU mission areas 3 Application/Project ▪ What does it take to prepare the application? ▪ What is a good project? ▪ What costs are eligible? 4 Reporting ▪ How do I receive the funding? ▪ What do I need to report? 1 Development Idea ▪ What is the new innovation/development idea? ▪ Does it benefit EU? 2 Instrument/Theme ▪ What could be the most likely instrument for the development project? 5 Example cases ▪ What sort of projects have received the funding? November 20 Grannenfelt Finance
Health • Culture, creativity & inclusive society • Civil security for society • Digital, industry & space • Climate, energy, mobility & green deal • Food, bioeconomy, natural resources, agriculture & environment Horizon Europe (2021-2027) Mission areas • Adaptation to climate change including societal transformation • Cancer • Climate-neutral and smart cities • Healthy oceans, seas, coastal and inland waters • Soil health and food EU Social, Digital & Green Deal Priority Areas 2021-27 The EU is looking to finance research & innovation projects targeting the following sectors & mission areas November 20 2021-2028 - Focus to Strengthen Growth Stage Investments (Scaleup VC + pre-IPO) and Green Deal themes (in addition to R&D and Innovation funding as before) 0 EU Overview Grannenfelt Finance
20 European Innovation Council EIC European Green Deal InvestEU A separate funding program for enterprises focusing on deep tech scaling Pathfinder (research and deep tech) & Accellerator (RDI and commercialisation) Piloting started with the instruments of the current, on-going funding programme Budget 10bn€ Commission’s investment programme for the new funding period (2021-2027) Aim is to combine the numerous current programmes under the same roof 75% of the funding is directed through EIB & 25% through national institutions Budget 38bn€ → 650bn€ (Commission’s original suggestion) Aim is the carbon neutrality of Europe by the year 2050 as the first continent Comprehensive programme of measures which covers various political areas The funding is mainly covered through existing instruments Budget 1000bn€ → 2030 COVID19! SUPPORT INNOVATION THROUGH GRANTS SUPPORT SMEs & PROJECTS VIA FINANCE SECTOR SUPPORT CLIMATE PROJECTS THROUGH EXISTING INSTRUMENTS 0 EU Overview Grannenfelt Finance Source: Henri Grundstén, TESI
under EU missions and sectors November 20 1 Development Idea A good innovation must include the below: ▪ Improves the competitiveness of Europe: improves employment, export & growth ▪ Fits within the set goals & focus sectors of EU ▪ Is disruptive: revolutionises the industry or creates a new one Does the innovation need some of the below activities? ▪ New activities & development ideas ▪ Development of IPR & new ideas either independently or in co-operation ▪ Research & Experiments ▪ Networking that improves the goals of the project incl. Universities, research institutions (consortia) & other EU institutions ▪ Temporary & exclusive entities ▪ What is your new innovation / development idea? ▪ How does it benefit EU? Grannenfelt Finance
20 Original research or innovation actions Further development Follow-on funding to Horizon 2020 results Individual application Close-to-market consortia Innovation development and commercialisation Research Stage Pre-commercial Stage 2 Instrument / Theme Instruments can be categorized into two stages: Research & Pre-commercial ▪ Research, development & piloting ▪ Technology readiness level up to 6 ▪ Innovative projects until demonstration phase ▪ Demonstration projects ▪ Productization & initial market entry ▪ Technology readiness level between 6 and 8 Grannenfelt Finance
-based Programs Instruments can be either consortium submissions e.g. together with a partner(s) or individual submissions November 20 Note! Companies in pre-commercial or commercial stage need to participate in consortia to gain access to EU research and innovation funding. The following programs can only be applied by SMEs in special cases e.g. deep tech projects. Original research or innovation actions Further development Follow-on funding to Horizon 2020 results EIC Pathfinder: • Research intensive innovation • Individual applicants and consortia from 2021+ • Max 3 M€ EIC Launchpad • Max 0,1 M€ • Individual applicants and consortia • The objective: how to apply research result in practise Horizon 2020/Europe • Multiple programmes e.g. Green deal EIC Pathfinder: • Consortia, Interdisciplinary • Max 4 M€, Max 4 years CALL TYPE: Bottom-up (Open call topics) CALL TYPE: Top-down (Thematic) EIC Transition to Innovation Activities • 1-2 M€, up to 2 years • Go-to-market RDI starting from TRL 2-3 • Consortia • The objective: how to apply research result in practise 2 Instrument / Theme Grannenfelt Finance
November 20 EIC Accelerator / SME Instrument Phase 2 ▪ Grant 0.5-2.5 M€ (70%), and 0.5-15 M€ equity ▪ Call 4 times a year ▪ Good fit for SMEs and scaleups ▪ From 2021 onwards two stage process Fast track to Innovation (FTI) ▪ Grant up to 3M€ - 70% of the project costs ▪ at least 60% overall budget to industry; ▪ Min. 2 industry partners out of a consortium of 3-4 at least 3 different countries ▪ Call 3 times a years Individual Application Close-to- market consortia Innovation Development & Commercialisation Close-to- market & scale- up financing of any innovations (no pre-defined themes) Eurostars ▪ R&D performing SMEs and at least one additional partner ▪ SME funding rate 50% from the project ▪ Grant typically 1M-2M ▪ At least two participants from two different countries ▪ Call 2 times a year Instruments can be either consortium submissions e.g. together with a partner(s) or individual submissions Note! The idea of instruments is to take an idea from piloting to first commercial product. 2 Instrument / Theme Grannenfelt Finance
November 20 ▪ FTI – big commercial potential, consortium to help with a market entry process ▪ Pathfinder to deep tech EIC Pathfinder & FTI consortia EIC Accelerator ▪ For innovative SMEs with big potential Eurostars ▪ Partner for R&D and international development Thematic consortia & Horizon Europe ▪ Focus on research ▪ Value chain includes international partners / universities ▪ Aim is the find solutions for that fit the programme themes 2 Instrument / Theme Grannenfelt Finance
the goals of the EU programmes ▪ Substantial project on a international scale (within the industry) ▪ Gives an innovative solution/promise that’s substantial enough ▪ Distruptive idea – doesnt only offer a better version of an already existing idea/product ▪ Utilizes the best practices & technologies EU’s Point of View ▪ Well resourced – from planning and administration to execution ▪ Can be measured (actions & results) ▪ Cost-efficient ▪ Ethically acceptable & responsible ▪ Actively communicating of results ▪ Offers a clear view on how to utilize & benefit from the outcome/results November 20 3 Application / Project Grannenfelt Finance
EIC Accelerator is more flexible on marketing related actions as it supports also demonstrating and aim at immediate commercialization after the project ✓ If you sell the developed result of the project during the project period , the price reduces your grant ✓ It is not forbidden, but it might be easier to use the grant as agreed ✓ EU is looking for best value to money = show that you planned the travels to serve the project, document how you compared and selected the best subcontractor ✓ Subcontractor cannot be from the same grant project consortium Eligible costs November 20 Grannenfelt Finance 3 Application / Project
Costs of Development = What is needed to achieve the goal with the actions described in the work plan ✓ Rules vary between the instruments, even CAPEX is sometimes accepted. but in general: ✓ Travel costs, cost of staff working on this particular project, IP, Equipment, Subcontracting, materials, parts, goods and services, renting a specific space for R&D as defined in the plan ✓ Your laptop, phone, rent of the offices, software etc. you use also for other work are considered as indirect costs ✓ Indirect costs are covered by e.g. 20 % “overhead” paid on top of all the direct costs expect subcontracting ✓ Marketing & Sales usually not eligible in grant financing ✓ Advance payment at the time of the signing up to 30% ✓ Advance payment during the project up to 60% ✓ Remaining payment after the final report is approved min. 10% ✓ Project purchases must be: ✓ Well-justified ✓ Tendered ✓ Documented ✓ If you are a party in the funding contract, you cannot be a subcontractor for the project ✓ e.g. You are not permitted to services/products to the other project parties during the project period November 20 Grannenfelt Finance 4 Reporting
support for commercially viable yet new, high-risk innovations with a high intellectual property component that will shape the industry or create a new market • 0.5-2.5 M€ grant, up to 70% of project costs • Used at the final development stages (TRL 6-8) • 70% of the grant amount is paid up-front ▪ Also a blended equity or quasi-equity component available for innovative scale-ups: • Up to 15 M€ (quasi-) equity • No restriction on equity use The EU will also finance close-to-market and scale-up innovations without pre-defined themes through the below programme for individual applicants November 20 Awarded Nordic applicants 5 Example Cases Grannenfelt Finance
a Chance? FORMETRIS (Ranska) ▪ Employs around 20 people ▪ Revenue approx. 2,4M€ ▪ Project duration: 10/2015 – 7/2017 ▪ Project partner: Know Center GmbH (research center) ▪ Project: My Learning Booster: a proactive, individualised digital solution to boost the impact of training Eurostars Applicant Example “MLB is an e-mentoring solution allowing digital individualised coaching. The project therefore involves the development of an individualised digital set of services that mentors trainees in the months before and following a training course, helping them to put new knowledge into action on-the-job. The intelligence of the system and its individualisation are ensured by a pluridisciplinary approach mobilising artificial intelligence, psychometrics and social sciences.” November 20 5 Example Cases Grannenfelt Finance
approx. 3,3M€ ▪ EU contribution: 2,4M€ ▪ Project: An Artificial Intelligence Enhancing Video Quality Locally to Limit Internet Traffic Tied to Video Streaming ▪ Project partners & participants: • THEO Technologies NV (Partner) – Belgium • ARTOMATIX LIMITED (Coordinator) – Ireland • STICHTING NEDERLANDSE PUBLIEKE OMROEP (Partner) - Netherlands • RADIO E TELEVISAO DE PORTUGAL SA (Partner) – Portugal • DE VLAAMSE RADIO EN TELEVISIEOMROEPORGANISATIE NV (Partner) - Belgium FTI Example ▪ Video streaming consists in the encoding, transcoding, delivering, decoding & displaying of videos on smartphones, tablets, PCs, smart TVs & consoles. Videos distributed “over-the-top” (OTT) are streamed rather than distributed through traditional networks (broadcast, pay TV) and distributors (cable, satellite). OTT is a vibrant $25bn market (2016) poised for spectacular growth: by 2025, it will reach $129bn, a 5.2x increase driven by powerhouses like Netflix and YouTube. ▪ While developed countries are challenged to address this surge, half of the World’s population still doesn’t have the Internet and is unlikely to be able to stream content when they get it, reinforcing the “Digital Divide”. Reducing this burden will lead to a faster, cheaper and more stable Internet. It will slash content delivery costs, which reach millions of dollars a month for media companies. It will result in major savings for Internet providers that invest ~$300bn/year in infrastructure or give them the opportunity to achieve much more for a similar investment. ▪ Artomatix’s goal is to decrease video streaming traffic by 80% while retaining video resolution and increasing quality. To do so, Artomatix and THEO will develop ENHANCEplayer, a solution that leverages Deep Learning to automatically increase the resolution and quality of videos on consumer devices. November 20 5 Example Cases Grannenfelt Finance
development ideas? Be in touch! We help you to identify the proper EU Funding possibilities Salomonkatu 17 a 00100 Helsinki Finland www.grannenfeltfinance.fi [email protected] Grannenfelt Finance November 20 Grannenfelt Finance
figures 360 m€ capital raised in equity and debt capital transactions for corporate clients 13+ people team with over 100 years of experience from finance, industry, investments, re-structuring situations etc. Founded in 2015 provides financial advisory and capital raising services in changing financial markets Over 100 Transactions carried out for Finnish and European clients EU funding & guarantees is one of our expertise areas. We are a leading EU funding advisor for corporates and institutions in the Nordics. November 20 Grannenfelt Finance
capital structure, improve funding success rate, and save time and resources of the Client. We differ from other financial advisors with our vast understanding of the changing capital markets and alternative financing opportunities. We deliver value for our Clients across our areas of expertise Why Grannenfelt Finance November 20 Experience from corporate finance transactions across industries and the company lifecycle An experienced team of specialized professionals International debt market and syndication expertise EU funding opportunities for companies and institutions Grannenfelt Finance
and sizes, including from the European Investment Bank and private venture debt providers, commercial banks, and debt capital funds. We find the best funding combination for our Clients needs and growth ambitions. Debt capital raising Equity capital raising We have led or co-led equity capital rounds, raising funds from VC, PE and family office investors. Debt restructuring advisory We have participated in debt restructuring projects e.g. re-organizing the loan portfolio of our Clients. We negotiate the best solution taking into consideration all stakeholders and the future of our Clients operations. Working capital financing advisory We utilize various forms of alternative working capital financing, such as factoring or sale of trade receivables. We help our Clients in discovering to most feasible sources of financing and negotiate the best contract terms. Grant funding & soft loans advisory We have carried out grant funding projects for multiple of our clients. We always aim to utilize the multiple sources for grant financing and soft loans to support the development and growth operations of our clients. We can additionally arrange bridge funding if needed. Our services We support our clients on a vast range of financing related projects November 20 Grannenfelt Finance
of debt financing and supported the project itself from start to finish. This way we were able to effectively implement a solution that was very well suited to the needs of the company. Ville Hovatta Yousician Oy Finance Manager Grannenfelt Finance as our financial advisor in a project of major importance lead the process with professional touch and provided us with valuable insights on alternative solutions. The arranged solution is optimal for our current growth stage and will help us thrive forward in our path. Matti Nylander Varjo Technologies CFO Grannenfelt Finance provided us with invaluable insights on the Nordic debt capital markets. They guided us through the funding opportunities available to us within the market, assisted in structuring the financing to best suit our needs, and partnered with us in the negotiations from beginning until signing. This released valuable resources for our management team to focus on our core business. Caitlin Baltzer Megin Oy VP Strategy & Operations What Our Clients are Saying November 20 Grannenfelt Finance
Capital raising Undisclosed amount 2020 Capital raising EUR 12 million 2019 Capital raising Undisclosed amount 2019 Financial advisory 2019 Capital raising Undisclosed amount 2019 Capital raising EUR 20 million 2019 Capital raising Undisclosed amount 2019 Capital raising Undisclosed amount 2019 Capital raising Undisclosed amount 2018 November 20 Grannenfelt Finance
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