Pori Contributes to Fund Growth Companies
On June 26, the City of Pori decided to participate in the share issue of Satakunnan Kasvurahasto Oy (Satakunta Growth Fund Ltd) and committed to investing a capital of one million euros in the fund.
A condition of this investment is that also the city of Rauma commits to investing at least 500,000 euros in the growth fund. Additionally, the implementation and execution of Pori’s investment decision require that the total amount of private investments in the capital fund is at least as large as the total amount of municipalities and cities’ investments at the moment the decision is made.
In collaboration with Rauma, Kankaanpää, Huittinen, the Satakunta Chamber of Commerce, and the Satakunta Entrepreneurs, Pori commissioned a study on the Satakunta Growth Fund. The study, which was completed in 2022, evaluated the fund’s market, risk management, and revenue model. Based on this study, the Satakunta Growth Fund Ltd was established in 2023 with the goal of offering growth and development-oriented Satakunta businesses not only financing but also expertise networks for implementing growth projects.
The Growth Fund will also support future Satakunta employment areas’ operations in terms of local businesses’ growth opportunities and internationalization. This will simultaneously enable the creation of new jobs and increase municipalities’ tax revenues.
During the study, a framework for the Satakunta Growth Fund Ltd’s shareholder agreement was prepared. According to this agreement, the parties involved are Katolli Ltd, SataInWest Ltd, and Jajopa Ltd, along with those responsible for their operations, as well as the Satakunta Growth Fund Ltd and its investors. The company’s board includes 3–7 members who make decisions regarding capital investments in target companies.
From the private sector’s perspective, the Growth Fund promotes the development of vibrant growth enterprises by providing not only capital financing but also valuable knowledge and networks. The Satakunta Growth Fund makes its managers’ expertise and networks available to target companies, aiding in strategy, marketing, and business development. The Growth Fund can also offer advisors and mentor networks that support growth companies in various ways. With these resources, growth enterprises can enhance their growth opportunities and succeed in the market.
The Growth Fund operates as a continuous corporation, which enables long-term and flexible operation. This means that the fund has no fixed term and can focus on developing target companies over a long time frame. This provides the fund with the necessary time and flexibility to execute exits from target companies when it is in the best interest of both the target companies and the fund.
– The operation of the Growth Fund is based on close cooperation with a wide partner network. This network includes investors, municipalities’ economic affairs, educational institutions, and other private and public experts and organizations. The aim is to achieve moderate costs and utilize existing knowledge, skills, and professionalism through cooperation, says Acting Department Director Jouko Hautamäki.
The investment fund aims to reach a target size of 10 million euros gradually. This allows the fund to optimize its size to best meet the demand of target companies and to include new investors in later stages. The fund will start by raising about 5 million euros in the first phase, half of which will come from municipalities and cities. The other half is expected to come from the private sector. Pori’s 2023 budget has allocated 1.2 million euros for the establishment of the Growth Fund. Future funding rounds aim to increase the share of private investments in the investment fund. The fund is set to start its operations in a way that allows for the first investment to be made into a target company in the first half of 2024.