Trind VC, a seed-stage venture fund based in Tallinn with team members in Helsinki and Munich has raised €55 million for their second seed-stage investment fund. With most of the investors from their first fund joining the round, it went over its €50 million target and is now backed by large institutional investors like European Investment Fund, Finnish Industry Investment (Suomen Teollisuussijoitus), LHV Pension Funds, and Swedbank Investment Funds as well as a growing number of angel investors.
Recently invested in Finnish HRtech Jobilla, now the Estonian VC plans to invest in 30-40 SME and consumer-focused startups in Northern Europe, offering investments between €100,000 and €1 million. Focusing on B2B and B2C services with small transaction sizes which collect a lot of data allows Trind to use that data — and their experience — to strategise, develop products, and monetise the startups.
Reima Linnanvirta is a partner at Trind VC, calling his background “quite typical” for a venture capitalist. He was an angel investor for 35 startups, many of which are still in his portfolio, before joining Trind. Linnanvirta spoke with TFN about Trind’s plans and what they are looking for.
Finding high-turnover, high-data startups
Trind’s first fund closed in 2018 at €21 million and has set the tone for Trind’s second fund. Unlike many funds, rather than focusing on a specific market or sector, Trind is looking for those that follow a specific business model.
“We focus on companies that have a consumer or community component,” Linnanvirta explains. “What we’re really interested in is a business model based on large audiences.” The rationale is data. While many startups focus on the B2B sector with few large clients, this reduces the number and speed of transactions. Those focused on consumers, or offering a consumer-level service to businesses, will have many transactions, generating plentiful data. And they are the type of businesses that Trind have learned a lot from.
“When you have a lot of customers, you accumulate a lot of data, and you accumulate it fast,” Linnanvirta explained. Having worked with that style of company before, Trind wants to extend the benefit of their knowledge with their second fund. “We learned how to scale these kinds of companies and how to leverage the best practices from one company to another.”
Although Linnanvirta describes Trind as agnostic when it comes to what they are looking for in a startup, he admits that their model lends itself more to services. “We invest in software, or software-enabled hardware,” he says, “but without services we will not touch them.” This still allows for diversity in their portfolio, which currently ranges from delivery to carbon capture.
Increasing the diversity of founders, and the problems they solve
Trind is also keen to increase the diversity of founders they support, and Linnanvirta notes that the startup world is heavily dominated by men, often because they frequently develop from friendship groups who have come up with a product together. “Many of the cases are either all-male or mixed teams. We would like to see more female founders,” he told us.
However, he is clear that it is not just motivated by equality, but also the different approach different founders can bring. “I did a LinkedIn call for female founders and was pleased with how many reached out to us.” They came with a different set of ideas, he said, “a lot was related to what I might call ‘family tech’, solving problems in family life. Very different to the middle-aged men who are more focused on ordering pizza faster!”
Increasing the diversity of founders will increase the range of issues they solve. “Founders tend to build startups to solve problems they face, so when there are only male founders, they find solutions for men. The wider the pool of funders we can invest in, the wider the pool of problems we can address.”
An open door, or network, to venture capital
Linnanvirta is keen to hear from startups in almost any way imaginable if they meet the key criteria of a business with a sufficient transactional volume to generate the data Trind can leverage to support growth.
“I’ve got founders through LinkedIn, emails, even Instagram,” Linnanvirta recalled. “Once, I was teaching in a local university, and one student attached their pitch to her work.” He emphasises that it’s what the startup offers, rather than the channel they use, that matters.
However, Trind has made it easy for founders to find out if they might be a match. “We have two useful checklists for founders,” Linnanvirta said. “One can check your business model and gives you a score. And you can see whether it will be love at first sight, or if we’re just not right for each other. The second details the kind of information we would want to see.”
For Linnanvirta, Trind’s approach is something that sets them apart. By knowing what they want, and being transparent about it, they have the consistency Linnanvirta feels is the hallmark of a great investor. “I think it comes down to consistency at the end of the day,” he told us. “Anyone can be good one day, but we want to deliver results over a long period of time.” And with what they learned from their first fund, Linnanvirta thinks they have the recipe for that success, “even though this is only our second fund, this is already our default portfolio.”
