Metsä Spring

Sweden is at the forefront of innovation in leveraging the forest for new materials. With decades of active research into new applications from wood-based components, only a few other countries in the world, like my native Finland, match it when it comes to the local knowledge platform for wood-based innovation.

At Metsä Spring, we seek and develop new business opportunities for Metsä Group and carry a broader responsibility to develop the broader ecosystem for utilising side-streams from processing Nordic wood. Our mandate is to take both in-house projects and partner startups through the “valley of death” of the innovation pipeline, giving them the expertise and funds they need to get through the costly and time-consuming pilot and demo phases so typical for deep-tech startups. We already have two key investments in Sweden in our portfolio: Chalmers-based Adsorbi AB and KTH-based FineCellOx AB.

Swedish material startups, many of which spring from highly advanced research communities at technical universities and research institutes, are essential to keep this progress going and get every possible opportunity out of forest-based raw materials. Opportunities that replace unsustainable, fossil-based materials and improve people’s lives. Here are three reasons Swedish material startups are important for the future of wood-based innovation.

New ideas come from bright new brains

Large companies might have the financial means to scale up new technologies, but not all good ideas are born in large corporations. That’s why an optimal innovation ecosystem comprises different actors forming a dynamic symbiosis. Essentially, such an approach is a win for all parties of the ecosystem. In other words, as a big player, we need to interact with the brightest minds working on new ideas for using wood and side-streams from wood processing.

A strong research background and an entrepreneurial mind are the best combination to get these new ideas into the market, and those people are typically found in material startups. New ideas sprout from the Swedish research community all the time, and interacting with this community to refresh our thinking is a must for an innovation company like Metsä Spring.

Sweden is a frontrunner for forest-based innovation

Great innovations arise from collaboration between different stakeholders. Swedish wood-based materials research is at the forefront because forestry and the forest industry have an important role in the country’s economy. Metsä Group is also already part of this community, owning and operating five large production plants in Sweden.

"Deep-tech material development often boils down to financing unprofitable pilot and demo plants, a necessity for commercial success."

Because the Swedish forest industry is as big as it is, universities and research institutes are among the leading in wood-related research, and the financing sector supporting them is highly developed.

In other words, Sweden has built a comprehensive knowledge platform for generating new ideas related to forest innovations. With that strong foundation, interest keeps growing in the market, and more ideas emerge. The whole ecosystem works to grow and give us new ways of using raw materials with less waste and replacing materials based on fossil resources in everyday products.

Sweden has support systems in place for new material startups

The Swedish venture capital scene, in general, is quite active and more developed than in many other similar countries. What’s needed is for even more entrepreneurs to take the leap from the lab to the business world - to bring their ideas into people’s lives.

For instance, the way Swedish universities support young entrepreneurs and young startups is more developed than the respective system in Finland. While Finland has put significant effort into making it as easy as possible to get a startup up and running through smaller public grants and administrative support, Sweden has focused more on long-term support and a more versatile financing system. The local players have simply been doing this for a longer time. The role of the foundations is also different.

It then becomes a question of making it as easy as possible for bright minds to take the leap and aim for commercialisation. One must also understand the broader and deeper valley of death that deep-tech material startups face, when moving from lab to industrial scale. At Metsä Spring, we have years of experience passing this valley from other startups and our in-house demo projects.

Deep-tech material development often boils down to financing unprofitable pilot and demo plants, a necessity for commercial success. This is where most financers take some distance and leave the startups in a challenging situation. Financing is important, but the help needed is always more than that. Young companies are under-resourced and are happy to get help for things like patenting, work safety, technical questions, and legal matters. As a part of a large group and a developed ecosystem, help is usually near.

Finally…

Considering these three points above, there are few better places to start a wood-based material startup than Sweden. Research, financing, and overall support are ready and waiting. For us, being part of the Swedish startup ecosystem is very exciting.