CapMan Growth establishes a new growth fund and invests in sound processing technology leader Neural DSP
The new fund is looking to invest in fast growing companies and has attracted some of the most successful Finnish entrepreneurs to back it.
CapMan Growth has established a new €85 million growth fund which makes significant minority investments in growth stage companies with ambitious growth and expansion goals. The fund has raised €74 million in the first round and has a target size of €85 million.
“There is a lot of potential in Finland in this investment class. We have many high growth companies and skillful entrepreneurs who have excellent chances for international success”, says Juha Mikkola, Managing Partner of CapMan Growth.
The new growth fund is backed by Finnish institutional investors as well as some of the most successful local entrepreneurs, such as Ilkka Paananen, Mikko Kodisoja, Aaro Cantell, Jarkko Veijalainen, Georg Ehrnrooth and many other significant Finnish entrepreneurs. The fund makes minority investments into companies with a turnover of €5–100 million. Investments range in size from €3 million to €20 million.
“Minority investing is a good option e.g. during ownership changes in the company or when the growth of the company can be accelerated by additional capital while the entrepreneur maintains the decision-making power. Due to the Coronavirus situation, companies need more skilled capital to steer growth forward”, tells CapMan Growth partner Antti Kummu.
The new fund continues the success of the CapMan Growth’s first fund established in 2018. Out of eleven investments, the fund has made several successful exits, such as Fluido, the leading Salesforce partner in the Nordics, and Polystar, which develops telecommunications network optimization software. In addition, there are many fast-growing companies in the portfolio such as healthcare company Coronaria, intelligent automation services provider Digital Workforce Services, and nanotechnology company Picosun.
The fund's investment activities are carried out by partners Juha Mikkola, Antti Kummu and, most recently, Heikki Vesterinen, who together have a broad experience in growth and private equity. In total, the team consists of seven investment professionals.
CapMan's own investment commitment in the fund is €10 million.
The first investment to a Finnish sound processing company
The first investment from the new fund is Finnish Neural DSP which creates cutting edge sound processing software and hardware for musicians. The company was founded in 2018, and in just a few years, it has become one of the top names in its field and its products are used by world-class artists. For the company's Chilean founder Douglas Castro, Neural DSP is already the second internationally successful company he has founded in Finland.
“Neural DSP combines all the qualities of a successful company: an ambitious and experienced entrepreneur, a superior product, and a world-class team. It is impressive how Neural DSP has risen to the awareness of the music world in such a short time”, says Heikki Juntti, Investment Director at CapMan Growth, who already knew the company due to his own guitar hobby.
“I had tried Neural DSP products before and knew they were top notch. Thus, I was immediately excited about the company as an investment”, Juntti continues.
CapMan Growth acted as lead investor in a €5 million investment round, which was also attended by the company's previous investors, as well as influencers in the music and technology sector.
“We evaluated numerous options, but CapMan was the clear choice”, says Douglas Castro, founder of Neural DSP. “They understood the industry and our mission very well, and they had the best plan to maximize the potential of our company and brand.”
With the investment, Neural DSP will become part of CapMan Growth's portfolio. The newly established fund aims to develop the target companies for 2-5 years together with the entrepreneurs. The entrepreneur maintains the majority ownership and decision-making power in the company, and receives the know-how and financing from the investor that helps to grow the business further.
For more information:
Juha Mikkola, Managing Partner, CapMan Growth, tel. +358 50 5900522
Douglas Castro, CEO & Founder, Neural DSP, tel. +358 40 1504121
CapMan is a leading Nordic private asset expert with an active approach to value creation. We offer a wide selection of investment products and services. As one of the Nordic private equity pioneers, we have developed hundreds of companies and real estate assets and created substantial value in these businesses and assets over the past 30 years. With over €3 billion in assets under management, our objective is to provide attractive returns and innovative solutions to investors. We have a broad presence in the unlisted market through our local and specialised teams. Our investment strategies cover Private Equity, Real Estate and Infra. We also have a growing service business that includes procurement services, fundraising advisory, and analysis, reporting and wealth management services. Altogether, CapMan employs 150 people in Helsinki, Stockholm, Copenhagen, London and Luxembourg. We are a public company listed on Nasdaq Helsinki since 2001 and a signatory of the UN Principles for Responsible Investment (PRI) since 2012. More information at www.capman.com.