Investment news

Estonian Development Fund moves with it’s new investments into even earlier project phase. Freshest investment has been made to emerging enterprises Sportlyzer and Inner Circle in total up to 3 million EEK (Estonian kroon).

Sportlyzer is developing a internet environment connecting athletic people with training and motivational software for the international market. For now the solution for internet-based has been created. The goal of Sportlyzeri is to create software of training advices and feedback to ensure service for hobby sport-people independent from the hourly fees and working schedules of the advisers. Sportlyzer has passed through the international business incubator of Development Fund, the SeedBooster, where the business plan and realization tactics were polished up to clear goals and milestones. Sportlyzer’s team is led by the establisher of Vomax Tõnis Saag. Also the creator of CV Online and Nagi Jüri Kaljundi is participating. Former CEO of Playtech Rein Lemberpuu acts as co-investor.

Inner Circle presents itself as trashfree Facebook'ina. The ambition of the enterprise is to create and go global with an user-friendly environment for group socialising, which differes from the current Facebook by privacy principles.     The co-establisher of Inner Circle is Allan Martinson and team is led by former head of Estonian Delfi Andrus Raudsalu. Next to Development Fund the private co-investors are AS Regio (CEO Teet Jagomägi) and Live Nature Eesti OÜ (board member Raivo Vare).

The head of investment division of Development Fund Heidi Kakko stated that both Sportlyzer and Inner Circle are investments into seed stage enterprises and the prototype or business model is only in testing.

"The seed stage start-ups have difficulties in finding investments all over the world, so as the developer of local venture capital market we pay more attention to the competent teams and emerging enterprises in very earlier stage.

 In the beginning the amount of investment is small, but new investments will be necessary when the in time with the seizing markets the need for additional capital arises.  For instance an the portfolio enterprise Massi Miliano, which was chosen for investment by Development Fund a year ago, has given results and persuaded current and new investors to increase the investment capital by one million euro,”  said Heidi Kakko.

Estonian Development Fund has been established by Riigikogu (Parliament) for orginising foresight projects and for investing in innovative ambitious  Estonian technology enterprises. For livening the local venture capital market a private investor/s are always included under same conditions as Development Fund’s own investment.  Also in Development Fund the international business incubator SeedBooster is acting for developing ambitious business models to increase their readyness  for investments and market potential.

Additional information:

Online shopping has taken over most facets of modern retail, but buying clothes via the interwebs is something more of a hard sell. As noticed by BBC and endgadet , Estonian firm Massi Miliano, introduces the Fits.me virtual fitting room with a shape-shifting mannequin that makes that a little easier for men. After three years of research in combining robotics with fashion this portfolio enterprise of Estonian Development Fund came up with robotic torso, comprised of flexible panels that can shift between thousands of different shapes and sizes from small to extra large. A clothing company puts a new shirt on the bot and a camera captures it cycling through a variety of body types like a T-1000 sinking into a pit of molten steel. When you enter your measurements online, the e-tailer looks up the appropriate pics and buyer can see how he will look in that Warwick Tailored semi-cutaway.

As for women - the latest word is that a female model might be ready in October.

Based on BBC and endgadget.

GrabCAD, an open source library for CAD (computer aided design) engineers, has secured 256k of angel funding from the Estonian Development Fund and telecommunication technology company Astrec Baltic (owner of Motors24.ee) with the aim to become “the world's leading web environment for CAD engineers within three years.”
Founded by Hardi Meybaum and Indrek Narusk, GrabCAD, which is set to debut in Beta in early August, lets CAD engineers share 3D models, solving the problem in which they spend too much time designing products or components that already exist elsewhere in the form of drawings. Also it plans to create a CAD engineering marketplace alongside the 3D model library and charge a brokerage fee for services ordered and completed through the site.

 The startup, which is a product of the Estonian Development Fund's international business incubator SeedBooster, has already partly tested this concept by offering its own CAD services, including easy-to-use order description and price calculation forms and functionality.”

Published in TechCrunch Europe

On 30th of June 2010 SmartPOST signed a deal of selling the local network of parcel termninals with the Finnish logistics company Itella Corporation in order to concentrate on expanding to foreign markets.
The Development Fund made it's first investment into SmartPOST OÜ for developing the technology of self-service parcel terminals, for international sales and for the up-building of the network of terminals in Estonia in 2008. By second half of 2009 the launched network had rapidly grabbed significant market share in parcel deliverance for Estonian inhabitant. SmartPOST OÜ positioned itself as technological enterprise for which the parcel terminals network was necessary as level of development, sales reference and for earning circulating capital.
Currently the company has achieved sufficient fame and is advancing in selling the technology in foreign markets, hence the owners of the company agreed to sell the terminal grid operating in Estonia when the appropriate offer was presented.

The sale of logistics unit marks an important milestone in the development of company - the reaching of it'a first goal which was to prove the success of the concept as such. The company will hence forward concentrate on development of parcel terminal soft- and hardware solutions as whole and selling it to other countries.

By Mike Southon. There is frequent debate about the merits or otherwise of membership of the European Union. But whatever economists may argue, many optimistic entrepreneurs see membership of the EU as an opportunity to enlarge their businesses and have some fun.

As a professional speaker, I lead a peripatetic life, regularly speaking at conferences in Europe. Often, it is a UK conference transplanted to somewhere more agreeable, but my favourite events involve meeting other European entrepreneurs on home territory.

I have a particular interest in European emerging markets. Countries that have recently joined the EU have an interesting combination of raw talent, a desire to succeed and access to grants to help them become competitive on the world stage.

I have written before about Estonia, a small country of only 1.5m people that became independent from the Soviet Union fewer than than 20 years ago. Since then, Estonia has become one of the world's most internet-savvy countries, a leader in electronic government and home to many interesting technology start-ups - the most famous being Skype.

This success has inspired many other Estonians to venture abroad, including Heikki Haldre. If there is an entrepreneurial gene, Haldre has it.

His early years were notable for six different attempts at a university degree, with only one successfully completed.

His early ventures covered an eclectic mix of consulting, property and internet-based logistics businesses.

All these were relatively successful, and Haldre kept an eye out for the next opportunity.

He knew that if he could find a problem or opportunity, it would be possible to use EU
funding to develop a software prototype quickly and inexpensively in Estonia. Then, he could find a way to leverage the idea into a commercial product.

And that is why Haldre started Fits.Me - bringing together the previously unconnected worlds of fashion retailing and
bio-robotics, to develop an online fitting room for consumers unable or unwilling to visit a traditional clothing outlet.

He believed it would be of huge benefit to online retailers in reducing the number of returns of ill-fitting garments. His first prototype worked well, and Haldre was then able to find local investors to back the project.

Given the small market for start-up capital, Estonian businesses tend to have diverse backers. Haldre's investors include a lawyer, a stockbroker, a restaurateur and a developer of railways, as well as an information technology specialist.

But when it came to finding the next level of investment, Haldre had to look beyond the Estonian market and focus on the UK.

Early results have been promising. Fits.Me recently won the "Hottest European Technology" award at the Plugg conference in Brussels. Initial trials with German retailer Quelle have been very successful. A deal has also been signed with Jermyn Street shirtmakers Hawes and Curtis.

But those involved in fundraising know that the process is never-ending: when one round is secured, work starts immediately on the next phase.

So Haldre is using the close-knit community of funding sources in the UK as a staging post before approaching Silicon Valley.

Like all Estonians, he understands that small is beautiful . . . and leverage is everything.

mike[A]beermat.biz

• On the same topic: The New York Times: Afraid the Clothes You Buy Online Won't Fit? Get Help From a Robotic Mannequin

"Don't talk, just execute". That was the goal of Garage48, a sort of bootcamp-meets-hackathon organised by the Estonian Startup Leaders Club, a non-profit organization that works with major startup founders from Estonia.

The event, which took place at Estonian IT College last weekend, involved 100 developers with varying startup experience - from student to experienced entrepreneur - and included a number of Skype founding engineers. After a brain storming session, 40 ideas were presented, with 16 services selected to be developed and launched by the end of a single, presumably caffeine-fueled, 48 hours.

The event was powered by Estonian Development Fund.

April 19, 2010: Don't talk, just execute - in 2 days, Estonia's Garage48 produces 16 potential startups. Read more from TechCrunch here.

At its general meeting, the Estonian private equity and venture capital association, EstVCA, chose Kristjan Kalda from BaltCap as the Chairman of the Management Board. Other members chosen for the management board were Margus Uudam from Ambient Sound Investment, Heidi Kakko from the Estonian Development Fund, Hanno Riismaa from Askembla, Kalmer Kikas from Hanseatic Capital, Allan Martinson from MTVP and Peeter Piho from Swedbank.

According to the elected head of the private equity and venture capital association, Kristjan Kalda, the convergence of Estonian venture capitalists is a logical step in establishing a financial services field that is accountable and to be competitive compared to other countries legislation.

“Through their investments private equity and venture capital firms are important employers in firms that focus on growth and innovation. Our association members make new investments today to be an important force in activating the economy.

With the association's common force we are ensuring that in tough competition Estonia would remain an attractive investment area, we bring in industrial standards to Estonia and we participate in cooperation with venture capitalists across Europe,” explained Kristjan Kalda about the EstVCA challenges ahead.

The EstVCA is an umbrella organisation connecting Estonian venture capital, private equity, business angels and suppliers of supporting services in the field. The main objective of the EstVCA is to actively develop the Estonian private equity and venture capital industry and raise a culture of ambitious entrepreneurship in Estonia.

EstVCA members are: Ambient Sound Investments OÜ, Askembla Asset Management OÜ, Astrec Invest OÜ, OÜ BaltCap, AS Cresco, Eesti Arengufond, AS Gild Fund Management, Hanseatic Capital Estonia OÜ, IPC Investment Group OÜ, AS MTVP, OÜ Pioneer Engineering Group, 

OÜ Redgate Capital, Swedbank Investeerimisfondid AS, OÜ Unitree Group, WNB Project OÜ. 

EstVCA supporting member chosen: OÜ Sentio, Solon Partners OÜ, AS Deloitte Advisory, Advokaadibüroo Glimstedt Straus & Partnerid OÜ, Advokaadibüroo Sorainen OÜ, OÜ Primos Invest, NASDAQ OMX Tallinn AS, OÜ Art 4 Design, OÜ Advokaadibüroo Luiga Mody Hääl Borenius, Krediidi ja Ekspordi Garanteerimise Sihtasutus KredEx, Tallinna Tehnoloogiapargi Arendamise SA, MTÜ Connect Eesti, Advisio OÜ, OÜ Curonia Research, Scandic Investments OÜ.

Further information:

Kristjan Kalda, BaltCap OÜ, tel: +372 665 0284, mob: +372 508 7967

Heidi Kakko, Estonian Development Fund, tel: +372 616 1085, mob: +372 5624 9959, heidi.kakko[A]arengufond.ee

Makers of Uniteddogs and Unitedcats, the Estonia-based United Dogs and Cats Ltd (UDC), received an investment of €480,000.

The investment was made jointly by 3 parties - the state-owned Estonian Development Fund, Ambient Sound Investments - an investment group led by co-founders of Skype, and a private entrepreneur with a web background in the Baltic region, Mr Raivo Hein.

"We have shown a steady growth of both revenues and the user base," CEO of United Dogs and Cats, Mr Ragnar Sass says, "we've got over 200,000 users and we are the market leader in Italy, France, Spain, Lithuania and Estonia. This is something we are really excited about."

Available in more than 10 languages, Uniteddogs and Unitedcats are fun and useful web communities where pet-owners can communicate, find new friends and learn to take better care of their pets.

"The investment will be used to further perfect the core services and to grow the user base," Mr Andrus Oks, a spokesman from the Estonian Development Fund commented.

Currently, the main sources of income for United Dogs and Cats are advertising of pet-related products and paid services for its members, like the Champion membership which enables access to additional features. "Currently, the Estonian economy is in a recession. But in a situation like today, we are glad to have managed to grow our revenues over the last quarters," mr Sass stated. Currently, about three quarters of UDC's revenues come from outside Estonia.

UDC focuses on how to enable great conversations between pet-owners, as well as to help people take better care of their pets. "We will introduce some revolutionary services later this year that will bring veterinarians and pet-owners much closer," Mr Ragnar Sass also added.

Previously, UDC has received €170,000 of funding from Ambient Sound Investments (ASI) in April 2008. "The early stage investment United Dogs and Cats Ltd received from us was successful - the product has been well received by the users. We now look forward to the expansion of the service," Kristjan Laanemaa, an investment manager at ASI, commented.

About United Dogs and Cats Ltd (UDC)

Founded in 2007, United Dogs and Cats Limited is the maker of social networking sites Uniteddogs.com and Unitedcats.com. Company's blog: http://blog.uniteddogs.com

About Estonian Development Fund

The Estonian Development Fund was launched in April 2007. It was created by the Estonian Parliament to initiate and support changes in the Estonian economy and society that would accelerate modernization of the economic structure, lead to growth of export and contribute to creating new jobs with high qualifications. www.arengufond.ee

About Ambient Sound Investments

Ambient Sound Investments (ASI) was established by the four founding engineers of Skype. ASI is a investing shareholders' equity primarily in Eastern European start-ups offering innovative technology and services. Since March 2006 the company has invested 8,2 millon EUR in 13 companies in several sectors including telematics, biotechnology and power electronics. For more information, please visit: www.asi.ee

Contacts for more information

Andrus Oks, Investment expert at the Estonian Development Fund, phone +372 5087 123, e-mail: andrus.oks[A]arengufond.ee

Ragnar Sass, CEO of United Dogs and Cats Ltd, phone +372 5714 666, e-mail: ragnar[A]uniteddogs.com

The Development Fund is investing 9.6 million kroons into Massi Miliano OÜ, the developer of a robot model designed for online apparel retailers. The investment made on equal terms with co-investors will pave the way for a test solution to be launched with a leading international online retailer already this summer.

The company set the project in motion two years ago and this summer a test solution will be launched with the first customer, a major international online retailer. The idea to harness the robotic mannequin in the online fashion industry originated from Heikki Haldre, the head of Massi Miliano and the founder of  Netikuller.ee. The robot itself was developed by Alvo Aabloo, Professor of Polymer Materials Technology at the Institute of Technology, University of Tartu, and Maarja Kruusmaa, Professor at the Centre for Biorobotics, Tallinn University of Technology. The patent protection is sought for the technical solution of the robot in the United States and other developed countries.

According to the Development Fund investment expert, Andrus Oks, the computer controlled shape-changing mannequin has the potential to be the key to efficiency and driver of growth in the online apparel retailing industry.

"Customers currently return up to 40% of the garments they have bought online. If from now on the customer can see a shirt or a coat worn by the robotic mannequin in his or her measurements, the return rate will certainly decline and people will be encouraged to buy clothes online more frequently and possibly also more expensive items. The ambition behind the robot application is that customers would be able to say  "it fits me." And it is under the trademark Fits.me that Massi Miliano is going to market the service shape changing mannequin to online retailers," Andrus Oks explained Massi Miliano's plans for the near future.

The robotic mannequin and Massi Miliano won the first place in the competition for start-up companies organised by the International Technology Law Association.

"Our development team includes excellent researchers, the venture capitalist Development Fund has faith in our business plan and we secured equal backing from private investors. All this enables us to export the good idea and turn it into a big global business," Heikki Haldre, the head of Massi Miliano, said to express his confidence in the commercial success of the robotic mannequin.

“The Fits.me service has already been compared to Skype, and considering the vital solution we are offering to the 26 billion dollar online fashion market, there are grounds for drawing these parallels."

The Development Fund's co-investors are angel investors and Webmedia AS. The transaction will give them a minority holding in Massi Miliano OÜ.

Legal counsel was provided by law offices Sorainen and Luiga Mody Hääl Borenius.

The Estonian Development Fund was initiated by the Riigikogu with the purpose of carrying out foresight and making investments into innovatively thinking and ambitiously operating Estonian technology companies. The Development Fund always engages one or several co-investors and makes an investment on equal terms with them in order to activate the local venture capital market.

Further information: Andrus Oks, Estonian Development Fund investment expert, tel: +372 5087 123

Heikki Haldre, Massi Miliano Chairman of the Board, tel: +372 56 611 119

The Development Fund's "world conqueror prize" and start-up money worth 50 000 EEK was given to the Digikäru team whose business plan was to combine the existing information systems of stores, radio frequency identification (RFID) technology and ID-card to make it more personal for the user and more effective for the stores.

Digikäru is lead by Aivar Roogsoo, Andrus Valma, Aigar Koov ja Margo Nõlvak, who are all connected by the University of Tartu Entrepreneurship and Technology Master's programme.

According to Heidi Kakko, the Development Fund's investment division development expert, the choice was made because the people at Digikäru have been thinking outside the box from the beginning and they have good preconditions to achieve their goal.  In addition, Digikäru faces an enormous technological opportunity because it is just a matter of time when RFID technology replaces the existent barcode standard.

The nominee of the special prize was chosen from among the best 25 out of 259 business plans submitted to the Brain Hunt competition. The Development Fund's special prize was delivered at the Ajujaht prize gala, which is a competition for developing entrepreneurship and innovation amongst youth.

In addition, the Development Fund proposed that the Digikäru team participate in SeedBooster, the Development Fund's international business incubator.

The Estonian Development Fund is a brain trust and investment fund, created by the Riigikogu that searches for sources of Estonia's new growth and is investing into innovative Estonian technology companies. Development Fund is the creator of EstVCA, Estonian Venture Capital Association and developer of ambitious growth business culture. 

Further information: Heidi Kakko Estonian Development Fund, tel: +372 616 1100, +372 5624 9959