Finland: TactoTek lands €15 mln venture debt financing under European Guarantee Fund
21 September 2021
European Investment Bank (EIB) makes available up to €15 million in venture debt financing for Finnish new-tech company TactoTek, based in Oulu.
The EIB financing falls under the ‘venture debt’ window of the European Guarantee Fund, part of the €540 billion emergency package agreed by EU Member States in spring 2020.
Funding is part of €22 mln raised by TactoTek, including €4 mln of venture bridge financing led by Conor Venture Partners with Tesi participating, and €3 mln of government backing.
The European Investment Bank has committed to supporting Finnish company TactoTek, which develops “in-mold structural electronics” (IMSE®) production methods and technologies. The company will use the financing to increase its investments in innovation and research, as well as to sustain its growth, which was hampered by the difficulties brought about by the COVID-19 pandemic. The financing was made available under the European Guarantee Fund (EGF), a pan-European programme to help SMEs that are viable in the long-term but are struggling in the current crisis, to grow their way out of the ongoing difficulties.
By shaping the electronics in the desired form as part of the end product, IMSE technology allows brands to add electronic parts to product designs without compromising on their shape. IMSE electronics are produced using clean, additive manufacturing processes. Moreover, a lifecycle analysis shows that a representative IMSE part reduces plastics use by 70% and cuts cradle-to-gate greenhouse gas emissions by 35% relative to a conventional electronics assembly. Apart from increasing importance in the automotive and home appliances markets, IMSE technology can also be applied in flexible materials, for example in wearables, smart clothing and other Internet of Things (IoT) applications.
EIB Vice-President Thomas Östros stated: “I think it’s clear that Europe should focus on supporting its home-grown innovative industries, making sure that the technology, expertise and know-how developed in EU countries can thrive. In recent years, the EIB has created an array of financial instruments to sustain companies like TactoTek, and now the European Guarantee Fund really gives us the firepower to enhance this support. The applications that TactoTek’s technology makes possible are endless, making it important to support this, also as an enabler for other industries.“
“The pandemic is causing significant uncertainty for most businesses, and initially slowed adoption of new technology,” added Jussi Harvela, TactoTek CEO. “We’re very positive about the market acceleration we’re experiencing, and TactoTek having access to EGF funding and the support of our investors will inspire confidence in our customers that include global leaders in automotive, consumer/industrial brands, and their suppliers who license IMSE technology.”
In 2020, the EIB made available in excess of €676 million in loans for Finnish projects. The EIB borrows money on capital markets and lends it to projects that support EU objectives, with about 90% of all loans being accorded within the European Union.
TheEuropean Guarantee Fund(EGF) was set up by the EIB Group with contributions from Finland and other EU Member States to shield companies suffering from the COVID-19 crisis. Using nearly €25 billion in guarantees, the EGF allows the EIB and the EIF to quickly make loans, guarantees, asset-backed securities, equity and other financial instruments available to mostly small and medium-sized enterprises. The EGF is part of the European Union’s recovery package aiming to provide a total of €540 billion to boost those parts of the EU economy that have been hit the worst.
Tactotek Oy is a Finnish technology company based in Oulu founded in 2011, as a spin-out of VTT (Technical Research Centre of Finland). The company develops and commercialises Injection Moulded Structural Electronics (“IMSE”) production methods and technologies, Leading IMSE use cases include human-machine interfaces (HMI), connectivity and electronic styling features for automotive, smart home, appliances and other markets. Its core business is the design, technology licensing and small-scale manufacturing of in-mould electronic parts of different size and shape, especially for the automotive and consumer electronics sectors. It currently employs 93 FTE, of which 53 are in R&D. TactoTek is funded by international leaders in finance and industry committed to advancing technology solutions that benefit consumers and the environment. TactoTek investors include Conor Venture Partners, 3M Ventures, Repsol Energy Ventures, Faurecia Ventures, Voima Ventures, Tesi, Nidoco AB and Cornes Technologies Limited.
The European Guarantee Fund, which started operations in December 2020, has reached €16 billion in approved financing at the end of June. This represents over 65% of the available € 24.4 billion in EU Member States’ guarantees to support financing to European businesses struggling after the economic downturn. Total signatures with beneficiaries of financing under the EGF stood at €8.4 billion, mostly benefitting SMEs.
The Board of Directors of the EIB has on 26 May agreed on the structure and business model of the new Pan-European Guarantee Fund to tackle the economic consequences of the Covid-19 pandemic. The Fund was endorsed by the European Council on 23 April as part of the overall EU Covid-19 response package.
The European Guarantee Fund (EGF), part of the €540 billion EU recovery package agreed in 2020, has approved funding amounting to almost half its target for 2021. After clearance under the EU state aid notification process in December 2020, the initiative has now approved €11.7 billion in support of European businesses struggling with the economic fallout of the COVID-19 pandemic. This is almost half the fund’s target for 2021. The fund mobilises additional financing, and initiatives financed so far are expected to generate €93.9 billion in funding for the EU economy. With €2.1 billion in financing also signed at the end of April, EGF funding is already reaching businesses across the European Union.