Early stage investing

A proposed government incentive and investment companies like Alliance Venture help startups thrive

Photo courtesy of Alliance Venture  Some of Alliance Venture’s partners, from left to right: Erling Maartmann-Moe, Bjørn Christensen, Arne Tonning, and Jan-Erik Hareid.

Photo courtesy of Alliance Venture
Some of Alliance Venture’s partners, from left to right: Erling Maartmann-Moe, Bjørn Christensen, Arne Tonning, and Jan-Erik Hareid.

Rasmus Falck
Oslo, Norway

This year has been a good year for equity funds raising capital in Norway. Among the venture funds raising new equity are HighTechVision with 1.4 billion, NeoMed with 800 million and ProVenture and Alliance Venture Spring with 500 million NOK each.

Alliance Venture Spring is a seed fund that invests in emerging technology companies at an early stage and supports the startups’ global expansion through their international network. One of their partners has since the summer been the “Investor in Residence” at Nordic Innovation House in Palo Alto, where he is an integrated part of the team there. His mission for the seed fund is to support their portfolio companies, benchmark new investment opportunities for the latest funds, and strengthen the network.

Alliance attracted a number of high-profile investors. Their new early-stage fund will primarily invest in new, promising IT startups in Norway. The fund was oversubscribed and attracted a number of strategic investors, among them Telenor and Opera Software. Capital under management is NOK 500 million. Alliance was formed in 2001 and this is their third fund.

The fund is based in Oslo, but will make investments all over Norway, with a focus on early-stage IT companies. They can make investments internationally, but they will mainly invest in Norwegian companies. Their aim is to give the investors an attractive return on invested capital, while at the same time helping entrepreneurs succeed in commercializing their ideas.

One of Alliance’s portfolio companies is Novelda. They develop and manufacture adoptive smart sensors. They recently closed a $12 million financing round to secure delivery and further development of their XeThru sensor technology. The sensor is designed to detect movement and human body vital signs such as breathing and heart rate from a distance of several meters. The sensors use harmless, extremely low-energy, high-frequency radio waves, and can sense through clothing, bedding, and obstacles such as glass, walls, and other materials.

In this year’s national budget talks (Statsbudsjettet) the parties Høyre and Venstre agreed that they would strongly consider establishing a pre-seed fund where investments from private investors would be matched by the government. To help early startups, Venstre even goes a bit further as they launched a proposal for a new twenty percent tax incentive for investors in early startup companies. The investments have to be invested for at least three years. The investor may not be employed by the company.

And on that topic, let me just remind you that to kick-start the economy, lasting until April 2017, there is a fifty percent tax incentive in Great Britain.

This article originally appeared in the Dec. 19, 2014, issue of the Norwegian American Weekly. To subscribe, visit SUBSCRIBE or call us at (800) 305-0271.

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