Helsinki hosts a long-term, free incubator program for research-based health startups. The concept is unique in the Nordics. Read about the program and the experiences of two promising Finnish startups that have participated in the program. The incubator is open to new companies 1-2 times a year.
Two startups participating in the incubator program of Health Incubator Helsinki in the Meilahti campus area have great news to tell. Maculaser has received initial funding of 1.2 million euros from investors, and another company, EpiHeart, has secured about 600,000 euros through a crowdfunding round.
“The incubator provides tailored, long-term support for aspiring health tech and med tech companies. We help in concept development, piloting, go-to market strategies and raising funding. We have a wide network and can connect different parties together,” says Christian Lardot, Incubator Leader at Health Incubator Helsinki.
Founded in 2020, the incubator currently has 11 companies developing their business, almost all of which have a university background. With the exception of office rent, the service is free-of-charge for companies. The most recent application round ended on 15 March 2021.
“At the application stage we assess whether there is demand for the innovation, service or product of an applicant company. Is the company’s goal to create something new or to improve existing solutions? It is also important that the team is committed and determined,” says Lardot.
Maculaser has developed and patented a new type of laser therapy to prevent blindness caused by common retinal diseases such as age-related macular degeneration.
“Retinal diseases cost healthcare systems around the world 400 billion euros annually. There are currently no treatments for dry age-related macular degeneration, which affects more than 100 million people, for example. If our technology can be used to delay or prevent blindness, it will have a massive impact at both the individual and the societal level,” says Jani Tirronen, Maculaser’s CEO.
The seed funding raised by Maculaser will secure the company’s operations for the next couple of years, enable clinical tests with patients and the development of the existing prototype device into a clinical treatment device.
“In the funding round, the incubator provided us with contacts and mentoring on how to pitch our idea to different investors. The fact that we were chosen for the incubator has in itself given us more credibility. You have to do the work yourself, however; nobody will do it for you,” says Tirronen.
“Although the companies in the incubator are all at different stages, many of the issues we are resolving are similar. Being able to exchange views with other teams is very valuable.”
EpiHeart solves problems associated with heart failure. The company’s initial focus is on a treatment in which the patient’s own heart tissue is used in cardiac surgery to make a therapeutic cell transplant to prevent heart failure. The treatment is still in the research stage.
“The problems are known and significant worldwide. Our solution has excellent potential to become widely adopted because cardiac surgery is practised in the same way everywhere,” says Kai Kronström, EpiHeart’s CEO. He emphasises that the company is still at early stage.
Although Kronström himself has an extensive entrepreneurial background and the solid experience it brings, EpiHeart has gained a lot from participating in the incubator.
Exchange of information with other companies, business premises, a central location within the hospital area and access to the right people are the main benefits according to Kronström.
During the funding round that just ended, EpiHeart met with angel and private equity investors. There was interest, but the company finally chose a crowdfunding model because it gave access to investors who would normally not be able to invest in this type of company.
“In this model, individual investments are relatively small, the smallest being under 1000 euros. From a societal perspective, it would be good if investment assets were steered more towards companies that create something new. They involve risk but we, for example, have a realistic goal of creating better care for heart patients and, at the same time, generating substantial returns for shareholders,” says Kronström.
According to Christian Lardot, funding for health technology companies is available both in Finland and abroad. In Finland, however, receiving major investments in the sector is still a relatively new thing, which poses challenges to many healthcare companies.
“As of yet, there are few health technology investors in Finland, mainly due to the small number of new companies with growth potential. Investors in this sector have to have an understanding of different therapy areas and markets to be able to assess the significance, impact and market potential of an innovation.”
Both EpiHeart and Maculaser put in a huge effort to raise seed funding. What success factors do the two CEOs recognise in the background of their companies?
“Solid research is an important foundation. We also need common drive and ambition to move things forward,” says Kronström.
“A solid scientific base, solid technology, great commercial potential, a united team and contacts with leading companies in the field around the world,” says Tirronen.
Christian Lardot says that the health technology sector is important for many reasons. The cost to society is high if people are not healthy.
“Few high-quality research-based healthcare companies are being founded in Finland at the moment. High-quality research is being carried out in Finland that leads to great innovations. These innovations should also enable that new companies with growth potential will be established. We see a clear role for us in this and, if we do this right, it will generate successful companies and, as a result, wellbeing.”
Text and photos: Newco Helsinki