Estonia’s Trind VC closes €55M 2nd fund; will back 30 to 40 consumer, SME-focused startups

Tallinn-based Trind VC, a seed-stage venture fund focusing on startups with a consumer or community component, announced on Tuesday, September 27, that it has closed its second fund at  €55M.

Reima Linnanvirta, Partner at Trind VC, says, “We were targeting to raise €50M, but as we already have more commitments, we will go slightly above that in the second closing. Most of our LPs from Fund I joined Fund II, a sign of trust we truly appreciate. We are honoured to have top-tier institutions from the region investing in the fund, alongside our expanding angel investor community.”

The fund is backed by institutional investors such as European Investment Fund, Tesi (Finnish Industry Investment), LHV Pension Funds, and Swedbank Investment Funds.

Supporting aspiring entrepreneurs

Founded in 2018 by Joel Aasmäe, Kimmo Irpola, Taavi Lepmets, and Ivar Siimar, Trind Ventures helps scale solutions with consumer and community components. Its founding partners have been working together since 1999 while investing as business angels and as co-founders of LHV bank and New Economy Ventures, the first VC fund in the Baltics.

The firm’s initial fund made investments in firms like Jobilla, Finnish Neural DSP, Ready Player Me, and Estonian Fractory. Reima Linnanvirta, the former board chair of the Finnish Business Angels Network, was added as a partner by Trind VC to support their Finnish-Baltic strategy.

What to expect from the new fund?

Trind VC says it aims to back between 30 to 40 startups with proven traction in four years.

Reima Linnanvirta says, “Estonia and Finland form one of the strongest startup ecosystems in Europe, and the region has been producing excellent startups. While the funding environment has been getting tougher, we want to offer continuity in the availability of funding by investing through the cycle as we believe that great founders should get funded in all market conditions.”

The VC firm aims to back companies with B2C and C2C business models, alongside consumerised B2B software. The CCC approach, which refers to businesses with consumer or community components, allows them to collect far more data than many B2B firms with only a few larger clients since they have a lot of little transactions. Being completely data-driven and providing far more precise insights into client behaviour are advantages of this.

In order to establish products, go-to-market strategies, marketing, and monetisation models with high scalability and be prepared for an A-round, Trind VC employs its knowledge from working with past firms. The firm says that a strong team presence, both in Finland and Estonia, gives it a vantage point to invest in the region that has been previously known best for its B2B startup scene.

Joel Aasmäe, Managing Partner at Trind VC, says, “Our investment thesis is actually quite simple. We are looking for startups with clear traction from big enough market – general hype or buzzwords won’t get us excited. We are using the data for both when making our investment decisions, but more importantly in developing the companies. There’s a clear bottleneck for funding for consumer startups in the area compared to B2B equivalents.”

Ticket size

The new fund will initially invest up to €1M, with a €100K minimum ticket size. Tickets up to €5M will be used to join subsequent rounds. Trind VC performs ESG due diligence on potential portfolio businesses before investing, and they continue to monitor them and demand quarterly reporting to make sure they are ESG compliant. 

A portion of Trind VC’s newest fund will also be used to invest in firms with a beneficial environmental effect.

Trind VC reports that it is willing to co-invest alongside a local VC who is driving the round, especially with European cross-border investments. It will also keep up its co-investment approach with well-known angel syndicates in order to contribute additional knowledge to the startup through board memberships and advisory roles than simply its own resources.

Ene Õunmaa, portfolio manager of Swedbank Investment Funds, says, “The selection of funds offered by Swedbank is one of the widest in the market in terms of both II and III pillar pension funds. Cooperation with the Trind Ventures Fund II means that our clients will take part in the growth of rapidly developing economic sectors, investments in local companies will increase, and at the same time the client can be sure that their money has been invested sustainably.”