Our first newsletter of the year contains 1) our outlook for SME & corporate funding access in 2023, 2) an overview of selected customers we supported in 2022, 3) the recently published Energy grants, 4) our upcoming webinar on Green transition funding together with Danske Bank
Our first newsletter of the year contains 1) our outlook for SME & corporate funding access in 2023, 2) an overview of selected customers we supported in 2022, 3) the recently published Energy grants, 4) our upcoming webinar on Green transition funding together with Danske Bank 9th of May 2023, and 5) a selection of funding tips we have shared in recent months.
We see the biggest funding opportunities for our customers in alternative debt, growth equity, and public funding initiatives.
We expect the market turmoil in the banking sector together with the interest rate environment to decrease access to funding for companies in general. Banks are likely to tighten their credit risk policy from here on out and this further decreases access to funding. At the same time, cost of funding goes up.
The increased expectations of a “hard landing” in the economy – i.e., risk of economic slowdown or recession – will further limit risk appetite across financiers and investors. This is in addition to changes in investor appetite and cost of funding that we already saw last year. Throughout 2022 as interest rates and inflation came up, market valuations came down and recession fears were looming – access to funding was tightened. This had particularly notable consequences for companies that were raising equity. Now the credit market has tightened up as well.
The increased cost of funding means that companies face a higher requirement on expected internal return for new investments. Weakened economic growth prospects speak for a focus on profitability rather than growth prospects. This we saw already in 2022 and the outlook remains the same. The interest rate environment further speaks for decreasing valuations in 2023.
We see the biggest funding opportunities for our customers in alternative debt, growth equity, and public funding initiatives. This decreases the need for dilutive equity. Most importantly, it allows for more time until the next funding round. As the banking sector restricts lending due to regulatory or public market sentiment, the private debt market can fill the gap as it has seen historically large allocations. On the equity fundraising side, allocations remain strong for green transition and impact investments. Green transition and sustainability projects will in 2023 also become increasingly in focus for bank and private debt lending.
Grannenfelt Finance builds funding solutions that support the long-term success and growth of our clients. We are a modern and agile corporate finance and capital raising advisor for SME and growth companies. We are industry agnostics but have deep understanding in green transition and sustainability, industrial technology, digital, consumer, and property and real estate related projects.
Do not hesitate to be in touch and we will help you assess the best funding opportunities for your business: Our contact details can be found here
Grannenfelt Finance had a strong 2022 as we successfully executed our client projects:
We fundraised debt or equity for eight customers, secured public funding (including investment grants) for five customers, and two real estate transactions. In addition, we have supported our clients with M&A, valuation opinions, restructurings, and other strategic or corporate finance related projects.
Vastuu Group is digitalising business processes related to the built environment, including compliance function and frictionless data flows for value-adding services. E.g., Vastuu Group offers a digital service to ensure compliance of contractor's liability regarding laws and regulations throughout the supply chains of the construction and related industries. Vastuu Group support the industry to combat the grey economy and ensure regulatory compliance.
Grannenfelt Finance helped Vastuu Group secure equity funding from new investors.
Solar Foods is a food-tech startup that is developing a technology that produced highly nutritious and sustainable protein for human consumption. The production is completely disconnected from agriculture and the need for arable land. All what is needed is electricity, hydrogen, carbon dioxide, water, vitamins and minerals to feed and grow the protein source – a microbial biomass. Construction of the first factory has begun and will be operational in 2024. Solar Foods enjoys the backing of top VCs and strategic industrial investors.
Grannenfelt Finance helped Solar Foods secure 34 MEUR in grant funding for its demonstration and scale-up stage.
Convion is a leading fuel cell system developer commercializing solid oxide fuel cell (SOFC) and solid oxide electrolyser (SOE) systems for distributed power generation and hydrogen production in industrial and commercial applications. Convion’s systems are designed for premium energy efficiency, reliability and operational flexibility. The technology enables sustainable power security, energy independence and fuel flexibility - supporting the green transition of industry.
Grannenfelt Finance helped Convion to secure funding for its international growth.
Finnforel is a Recirculating Aquaculture System (RAS) company – farming rainbow trout for the retail sector sustainably and on-land. RAS farmed fish is one of the most sustainable animal proteins available. Finnforel operates all steps of the farm-to-shelf value chain – all the way from roe to packaged portion size files and other packaged food items. Finnforel’s brand names are Saimaan Tuore and LoHi.
Grannenfelt Finance helped Finnforel secure funding for its scale-up investment stage in 2022.
NYAB is a builder of a clean future with decades of experience in construction and engineering. NYAB enables the green transition in the Nordics through their renewable energy projects, sustainable infrastructure and industrial projects. NYAB is publicly listed (Nasdaq First North Helsinki).
Grannenfelt Finance was Skarta Energy’s advisor for a non-disclosed project in 2022.
Puustako produces high-quality biochar from wood and forestry side streams for e.g. steelmaking processes. The use of biochar enables green transition of the conventional steelmaking industry. Biochar production from forestry and agricultural side streams ensures circularity and efficient use of raw materials.
Grannenfelt Finance helped Puustako secure funding for its demonstration and scale-up planning stage in 2022.
Sensative provides unified smart infrastructure for launching, leveraging, and scaling IoT solutions. It already offers over 100 customer use-cases across macro (cities, municipalities) and micro (buildings, homes) scale. Sensative offers its customers complete digitisation, and enables e.g., improved energy and resource efficiency and advanced digitalization benefits.
Grannenfelt Finance helped Sensative to secure funding for its international scale-up stage.
RGNT Motorcycles is a premium electric motorcycle manufacturer based in Sweden. RGNT’s advanced technology emphasizes user-friendliness for its riders. RGNT enables the green transition of mobility with a portfolio of city-use and long-range e-motorbikes.
Grannenfelt Finance helped RGNT to secure funding for its production ramp-up and international scale-up.
On March 15th, Business Finland opened the 2023 energy aid call for applications. Funding can be granted for investments and the preparations for projects that promote the production and use of renewable energy, energy saving, more efficient production or utilization of energy, or otherwise contribute to a low-carbon energy system in the long term. The grant is typically 15-30% of investment cost or up to 50% for preparatory work.
Read more about the program & eligibility here
The Finnish Sustainable Growth and RRF-programs second call for energy investment grants is open from 15.3.-26.5.2023. Funding is available for: 1) Energy infrastructure investments (budget EUR 61.6 million), and 2) Direct electrification and low carbonisation of industrial processes. Deadline for applications is 26th May 2023.
More information about the grant
The Ministry on Economic Affairs and Employment (TEM) will publish its call for large demo projects later this spring and the application deadline is expected for early fall.
More detailed information about both of the grant calls will be shared next week. In the meantime, do contact us if you have any questions. Team contact details can be found here.
Grannenfelt Finance and Danske Bank are organizing a webinar on green transition funding for the SME sector on the 9th of May 2023. More information will be shared with our customers and on Linkedin in mid-April.
Webinar agenda includes a view on green transition funding in Finland, EU and public funding opportunities, and future technological solutions that support the green transition.
The organisers
Danske Bank is one of the largest banks in Finland and supports SMEs with loans for green transition projects. Varma is one of the largest pension insurance companies and institutional investors in green transition projects.
Grannenfelt Finance advises SMEs and growth companies on growth funding and is specialized in securing private and public funding for green transition or other first-of-a-kind projects.
In case you missed them, below some of the monthly SME funding tips from the last few months:
Finnvera has launched a new export credit instrument. Up to 20 M€ loan can be granted to international customers of Finnish companies.
Things to consider when fundraising in the current market environment
The EU offers growth loans 10-50M€ for first-of-a-kind impact projects that target decarbonisation of heavy industry, energy or transport sector solution, and Circularity & bioeconomy
Typical terms for alternative debt providers of ca 0,5-30 M€ loan facilities
