According to Dealroom’s Helsinki Startup Ecosystem 2023 report, Helsinki deeptech startups raised 30% of all VC investment in Finland since 2022, and make up 26% of all startup jobs in the city.

There are a multitude of factors that contribute to why Helsinki is seen as a deeptech hub, so we spoke to key players in Helsinki’s deeptech ecosystem to discover why they believe the city has become the place to be when it comes to the deeptech revolution.

What specific factors contribute to Helsinki being Recognised as a hotspot for deeptech innovation?

Across the board, education and the importance that is placed on research and development seem to be the key factors in why Helsinki is a deeptech innovation hotspot.

Himadri Majumdar, CEO and Co-Founder of Semiqon, a startup that manufactures silicon-based scalable quantum computing processors, mentioned: “There are multiple factors [that contribute]. First and foremost is the education system that encourages innovation and independent thinking. Second is the research that happens in universities and research organisations. Students get exposed to top-of- the-class research activities during their summer training and master thesis engagement, which exposes them to the new possibilities within deeptech. They also bring fresh thinking and perspective. Third, is the Finnish state investment in research. Finland used to have close to 4% of its GDP spent on research and is currently on-route to reach that figure again, after having fallen back during the various economic crises. All these combined creates the perfect platform for deeptech innovation and research.”

Janne Laine, Vice President of Innovation at Aalto University, commented: “Over half of Finland’s present deeptech companies were founded in Finland’s capital region, with the rest concentrated around our regional universities.

“In Helsinki, a strong startup culture is supported by increasingly multidisciplinary collaboration between industry, universities (Aalto University, University of Helsinki) and research institutes (especially VTT). Solid public and corporate partner networks and multiple accelerator programmes, for example, in space and urbantech, are also helping Helsinki build credibility in deeptech. Many successful businesses have come out of these partnerships, for example the satellite technology company ICEYE and quantum computing outfit IQM. The two leading universities in Finland, Aalto and the University of Helsinki, are also closely networked and complement each other with their slightly different focus areas.

“Also, Finland has several globally successful companies in industry and tech, for example Wärtsilä, KONE, and ABB, all with HQs in Helsinki with close research cooperation with universities. The small population of Finland means that as a nation we retain quite a lot of agility in our R&D – and one of Aalto’s main focuses is on fostering direct relationships between R&D and industry.”

Sabrina Maniscalco, Co-Founder and CEO of Algorithmiq, a startup that is harnessing the power of quantum computing to solve complex problems in life sciences, said: “Helsinki has a strong R&D infrastructure, supported by significant investments from both public and private sectors. The Finnish government actively supports innovation through funding programmes like Business Finland, with also special programmes for deeptech and specifically for quantum technologies. The city’s collaborative ecosystem among startups, established companies, research institutions, and the public sector, fosters a great environment for innovation. Additionally, Helsinki attracts a highly educated workforce and international talent.”

Juha Vartiainen, Co-Founder, Global Expansion and Public Affairs at IQM Quantum Computers, commented: “Helsinki, and the capital area including the city of Espoo, has emerged as a hotspot for deeptech innovation due to a unique blend of entrepreneurial energy, VC funding and long-standing academic research. The several former success stories of startups encourage new entrepreneurs and a vibrant VC scene, including such funds as Tesi, Maki.vc, and Open Ocean, is supporting the growth of the companies.

“The regions have a high concentration of academic institutions like Aalto University, the University of Helsinki, and research centres such as VTT and CSC. The proximity of these entities facilitates a strong synergy between research and practical application, further bolstered by a workforce that includes a significant proportion of PhD-level experts. Furthermore, the region has been incredibly welcoming to foreign experts, scientists, and innovators. These factors have been crucial in making a fast-growing company like IQM Quantum Computers a reality.”

Supporting deeptech endeavours

In order to allow deeptech innovation to thrive within the city, support is offered to innovators to encourage breakthroughs.

Vartiainen explained: “First and foremost, the Nordic open working culture with flat hierarchies supports innovation. It empowers employees, fosters experimentation, and encourages the brainstorming of unfinished ideas, all of which are crucial for deeptech innovation. The public support is robust, including Business Finland and many community initiatives. The city hosts significant technology events like Slush, underscoring its commitment to the tech industry. In the capital, various associations, such as the Finnish Startup Community organise numerous events and activities. To support innovation, the area also boasts many companies specialising in IP protection and patents.”

Majumdar explained further: “It depends on what support is needed and who is seeking it. From a hardcore research perspective, the competitive public funding for research ideas is a good start. There are several family foundations which provide scholarships for students interested in research. For those who have done their PhD and would like to do post-docs have the unique opportunity of doing that work in collaboration with universities and companies through the PODOCO programme. These are initiatives that can open up the path for researchers coming from abroad to get engaged in this ecosystem.”

Laine mentioned: “There are many support functions available at various levels of innovation, starting from university support services with hands-on programmes in Europe’s most active student entrepreneurship society AaltoES, professional business advisors, and free MOOCS. This is supported by research to business funding, startup incubators like Aalto Startup Centre and Maria01, investor networks, and tight industry relationships, for example in the field of energy transition, semiconductors etc.”

What historical or cultural factors have contributed to making Helsinki a centre for innovation and technology?

As explained by the experts in Helsinki’s deeptech scene, there is plenty of support for deeptech innovation in the city, especially through education, R&D, and focused accelerator programmes and supporting organisations. But what have been the social factors that have contributed to this?

Lotta Partanen, Head of Incubation and Acceleration at VTT LaunchPad, believes there are a couple of factors: “In Finland, our society and industry are rather technology-oriented.

“The end of the era of Nokia’s mobile phones led to the availability of innovation capability to be redirected to support the growth of other already existing or entirely new technology companies.

“We have low hierarchy [in society] and therefore people are easily approachable across industries and positions of power. This reduces barriers to collaboration.”

The general attitude of the Finns has contributed to an ecosystem that is built on collaboration. Whilst competition may be present, innovation is always at the heart of the tech scene.

Laine discussed the factors he believes have contributed to this: “Finns have a reputation for hard work and perhaps a bit of a perfectionist bent – they like to have solid proof of concept and really make sure something is quite polished before they bring an idea to market. Aalto wants to disrupt that thinking and foster a culture of radical creativity, combined with an entrepreneurial mindset as a way forward. Trial and error are essential in the long deeptech development process.

“Humility has its uses too, though, and it’s an important cultural value for Finns. When a solution comes out of Finland, there’s a very good chance it is well-researched and already tried and proven at an industry level. Even university-born innovation is not likely to be presented ‘half-baked’!”

Helsinki has fostered a deeptech ecosystem that is scaling fast. Due to the general attitude of the Finns, as well the emphasis on technological innovation and advancement through R&D initiatives and education, the sector is likely to continue growing to ensure Helsinki becomes a deeptech powerhouse.

This article originally appeared in the July/August issue of Startups Magazine. Click here to subscribe

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