“The Success Of Our Partner Startups Is A Common Goal,” Says Metsä Spring CEO

Niklas von Weymarn is a researcher turned startup investor. After several years in academia, he started in Metsä Group in 2012 as VP, R&D. In the Group, “my most memorable project was being part of the Metsä Group Äänekoski bioproduct mill planning project which eventually then became the largest wood processing plant on the Northern hemisphere with an investment cost of €1.2 bn,” says von Weymarn. To foster the collaboration between Metsä Group and innovative startups in the forest-based bioeconomy, von Weymarn took over as CEO of Metsä Spring, the Group’s Corporate Venture Capital (CVC) arm in 2018.

We spoke to Niklas to talk about the mission of Metsä Spring, their current projects and future plans.

Niklas, why was Metsä Spring founded and what is your aim?

Most new ideas related to the forest-based bioeconomy are found outside Metsä Group. This is a simple fact. An established business like Metsä Group must constantly develop methods to find these new ideas.

Open innovation is one example of how a large company can become aware of external ideas. Strategic collaboration with a key machine supplier and current customers can also lead to the discovery of new ideas.

For Metsä Group, we decided to further explore new ideas through a Corporate Venture Capital (CVC) activity. Being part of the CVC scene brings interesting, fast-developing startups into our pool and our role is to help develop such startups, whose business ideas, in the future, could become a part of Metsä Group’s business ecosystem.

With Metsä Spring, you are looking into innovations in the forest-based bioeconomy. Which technologies are you specifically interested in?

We do have areas of interest, but to be totally honest, we might not even know all the interesting new areas. That is why hearing diverse ideas from startups is so interesting for us.

In general, our interest spans from technologies enabling the upgrading of components originating from wood to new digital tools that could be used to improve forest-based value chains.

What is your main challenge in this area?

Scaling up the production method is time-consuming and costly. A so-called demo plant can easily cost tens of millions. This is a typical challenge linked with technologies aiming at producing a material or a chemical. Business ideas that are based on digital tools can often avoid this challenge.

Metsä Group is also quite active in developing its existing businesses. For example, Metsä Group has recently initiated investment planning projects, related to building a new bioproduct mill in Northern Finland, building a new sawmill in Southwestern Finland and renewing parts of the pulp mill in Sweden. If implemented in full, the total value of these investments would amount to approximately 2€ billion during 2019–2023.

What benefits does a collaboration with startups have?

For us, it is key to find partner startups that can benefit from Metsä Group’s industrial assets, our competence, and networks. As the typical aim of the startups we engage with is to take the first steps towards industrialization, having all the necessary competencies in the team, related to the industrial value chain, is crucial. In other words, we are happy to co-invest with such parties that strengthen the team and thus, help the startup to become successful and enter the market.

What can startups expect from working with you and your team?

Having an operative team within the startup and giving it full freedom to implement the day-to-day tasks are important principles. However, as we become a partner through equity investments, we support our startups in all ways possible. The success of our partner startups is a common goal.

When you decide to partner with a startup; what are some of the criteria you are looking at?

Two things stand out for us: the technology/product and the operative team. A startup must have a credible technology and product, and then a team that can use the technology to develop a feasible business model. The main aim of the phase, in which Metsä Spring participates, is to reach a proof-of-concept (PoC). This aim can typically be divided into a market PoC and a technology PoC, often also into a legal PoC.

What’s next for Metsä Spring?

The first year has been quite busy. I started alone in May 2018 and now our team, including Metsä Group colleagues, grew to about 15 persons. All basic systems needed to run a company like this are in place and we can now focus fully on finding and assessing potential startup partners. This hopefully leads to more investment decisions in the near future.

Metsä Group’s strategic objectives include, among other things, increasing the value of the Finnish forests, stop using fossil fuels in production completely, further increasing the generation of renewable energy based on side-streams, and ensuring that greater amounts of carbon are stored in forests and in wood-based products. This is why at Metsä Spring, we are looking at mega-trends, like climate change and issues related to plastic waste quite seriously. It is clear that betting on new, sustainable bio-based solutions is betting on a winning horse. The world will need many solutions to fight the challenges and creating a sustainable bioeconomy is definitely one of these solutions. So, any startup working on innovative solutions in these areas is welcome to join us on our journey to address these challenges.

What’s the best way for a startup to get in touch with you?

On our website, we have set up a short application form to get an initial idea of what a startup does. After a startup reaches out, our team will get in touch to discuss the idea in more detail.

To get in touch with Niklas and his team, visit Metsä Spring’s website.

 

 

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