What comes to your mind when you think of startup hubs? Silicon Valley, Berlin? Those are no doubt some of the best-known cities in that context. But we all know the world of startups is always in motion! New centers of innovative entrepreneurship come up like rising stars and offer new possibilities. Just like Helsinki! Finland’s capital has evolved to an innovative stronghold and surely is a city to keep an eye on. Helsinki is said to host over 500 tech startups and holds its share at the Nordic countries having Europe’s fastest growing startup scene. Let us dive deeper into the strengths, weaknesses and special powers of Helsinki as a tech startup hub!
What are Helsinki’s biggest strengths from which startups can benefit?
Tech startup hub Helsinki – strength #1: business ecosystem
Helsinki offers great advantages for knowledge-intensive businesses with a varied business ecosystem. Entrepreneurs benefit from a great tech talent pool and strong gaming, ICT, cleantech and health tech sectors. Worth mentioning is here the latest addition to the startup scene in Finland, the Maria 0-1, which just opened in 2016 and focuses on tech startups. The large startup hub is a former hospital, which means there is quite a lot of space for startups.
Tech startup hub Helsinki – strength #2: low levels of bureaucracy
Setting up a business is easy and takes maximum three weeks. Simple paperwork can be completed through a public liability company, plus recurring paperwork can all be handled by one person – typically online. Sounds like heaven, right?
Tech startup hub Helsinki – strength #3: funding
Startups are offered various funding possibilities and even governmental support, for example through the vigo program. De facto, Helsinki even has Europe’s highest level of venture investment in relation to GDP, according to the Finnish Venture Capital Association.
What are the weaknesses of Helsinki that could be a downside for startups?
Tech startup hub Helsinki – weakness #1: taxation
Taxes are high for employees concerning costs for pensions, vacation days or sick days. In Finland, the European laws for employer protection also apply. But recently announced tax benefits for investors and small businesses might change the game.
Tech startup hub Helsinki – weakness #2: national market
Let’s speak the truth about Finland’s population: it is small. So, you should intend to go global and focus on an international audience. Being very well located with comparably short distances to the USA, Asia and of course Europe, Helsinki definitely makes up for its small population.
What are Helsinki’s special powers?
Tech startup hub Helsinki – specialty #1: life quality
According to the US Metropolis Magazine, Helsinki is the third best city to live in. And we agree! It’s famous for its architecture, green surroundings and a very high living standard. Not to mention that the shoreline, beach and even islands are right in the city!
Tech startup hub Helsinki – specialty #2: startup events
Two major startup events are rooted in Helsinki: Slush is one of Europe’s leading startup events where founders and tech talents meet with top international investors, executives and media. At Arctic15 entrepreneurs, investors, corporate acquirers and international media come together to network.
Want to find out more about startups in Helsinki and its surroundings? Two great examples for promising startups in this area are our CODE_n Alumni Cozify and Transfluent. Cozify offers innovative solutions for home automation and focuses on the markets Finland, Germany and USA. Read more about Cozify’s experiences in their two interviews here and also here. The aim of Transfluent is to give companies the possibility to become global and communicate with their customers in their local language. With this vision, they became a leading translation provider and are continuously growing. Jani Penttinen, CEO and Founder of Transfluent, is a big fan of Helsinki: “we operate globally, but Helsinki has always been our home base. Finland is a great place to build and run a global company! The local market is obvously quite small, but it gives a good playground for experimenting ideas before global roll out.”
As you can see, Helsinki not only is great to live in, but also opens up great chances for tech startups. To get straight to the point with Antti Vihavainen’s words, Business Developer of Cozify: “Helsinki has changed dramatically in the past 20 years: multinational companies have attracted a lot of people to study and work in Finland so the city feels quite international. Since working in a startup is nowadays considered cool, it is easy to find talented people that can help scale the company.”
You want to browse for startups from all over the world? Then check out our Alumni section.