Startups seeking international growth can access external funding directly through Jyväskylä's business ecosystem. Neuwo's CEO Johannes Harju is an experienced entrepreneur who has learned a lot about building a pitch deck and putting together a funding round for a startup.
The AI business is booming globally, but competition is fierce. This has been noticed by Neuwo, a Jyväskylä-based company whose business idea is to provide efficient data classification and enable content-based advertising. The service relies on the start-up's own AI-based solution.
Neuwo is the third company where Johannes Harju is an entrepreneur. It is also the first with strong international growth potential. In the last couple of years, the startup has gained a strong foothold in Finland; practically all Finnish media houses use Neuwo's technology.
"No matter how good a market leader you are in your home country, internationalisation is real hard work and a humbling experience. It is so expensive to run Neuwo's system that Finland is not enough of a market for us. That's why we have to go international," Harju explains.
As CEO of Neuwo, Harju knows that internationalisation requires not only expertise but also funding. So far, the start-up is rolling with the money from its owners, but the start-up is currently working on raising a round of funding. Successes create confidence in getting funding.
"No matter how good you are as a market leader in your home country, going international is really hard work and humbling."
Johannes Harju, Neuwo
"Most recently, Der Spiegel, the largest and most influential media in Europe, felt that we brought them something that no one else had been able to offer before. It's a major innovation, because we are able to do audience targeting with their data."
Neuwo's solution allows advertising to be targeted directly to the user's interest, rather than tracking browsing history or ID data. It is therefore GDPR-safe. The service has an exciting future as third-party cookies will soon be completely removed from browsers.
When Neuwo was founded in spring 2022, it was eligible for the Startup Factory's incubator. Monthly meetings helped Harju to pause on the essentials, provided structure for early-stage startup development and offered insights into different funding options.
However, putting together a startup funding round is not possible without pitching skills. In the incubator, Harju built Neuwo's first pitch deck. He got to work on it further at the International Venture Academy (IVA), an investor programme for startups and scale-ups.
"The IVA programme and Business Rally gave me valuable feedback on what a good pitch deck should look like. Can a pitch deck really take you to the heights you envision for your business?"
"Building an investor profile was also essential. Are we looking for angel or VC investors? Does the investor have potential for follow-on funding? Can the investor offer more than just money? Does the investor know the industry?" Harju sheds light.
The IVA and Business Rally gave Neuwo positive visibility and opened doors to networks. Harju sees the local events as an excellent opportunity to attract business people to Jyväskylä who typically spend most of their time in Helsinki at Slush.
Harju started raising his first round of funding after winning the Business Rally, about a year ago. The lessons learned from the incubator about the laws and conditions of external financing came in handy. Currently, Harju is trying to promote the startup's funding round independently.
Most recently, Neuwo's AI service has attracted interest in Austria, where local government funding instruments bode well. The startup's momentum is fierce, with something significant happening every week that could boost investor interest, according to Harju.
"Most importantly, external funding would allow us to scale sales in Europe and the rest of the world. To access the market, you need local sales agents from different countries. They know the modus operandi of the target region and know the networks."
Johannes Harju, Neuwo
"So far, our scaling numbers have not been at a sufficient level. When investors have lacked confidence, it has hampered our ability to expand market share. Last year was also the most difficult year in history to raise funding."
Harju does not want to build investor relationships by force, as loaned money can still be used to scale the business up to a certain point. But the benefits of external funding are still significant.
"Most importantly, external financing would allow us to scale sales in Europe and elsewhere in the world. To access the market, local sales agents from different countries are needed . They know how the target area works and know the networks," Harju stresses.
In addition, external funding would help strengthen the start-up's technology base. Neuwo is dealing with increasing amounts of data all the time, so technology needs to keep pace with growth.
"Of course, external funding would improve risk protection. So far we have only used our own money and loan money, so invested funding would also be welcome. At the same time, external funding would act as a lever for Business Finland's financial instruments, for example." If you need help in identifying financing options and developing your financial appetite, check out the Startup Factory's Financial Coaching.
Building a startup's funding round and pitching go hand in hand. Ideally, the pitch deck is built with the right elements in the right order. Sometimes the pitch deck needs to be varied in different ways - depending on the type of investors or funders you are targeting.
"Building a pitch deck has forced us to crystallise what we do. At the same time, of course, the business must always match the deck."
So the pitch deck lives according to how the business, the market and the demand lives. Harju admits that initially Neuwo's deck was quite technical. Next, the deck will be refined to focus on the benefits of the service. After all, the start-up has only recently been given big brands as references.
"Why is our service more effective than Meta or Google?" Harju illustrates.
The pitch deck will become more sophisticated over time, as visuals, for example, become more important. Even if one good deck has made it in an EBAN (European Business Angels Network) level competition such as Business Rally, it may not be good enough for another tough competition.
"Raising a round of funding for a startup is never an end in itself, but there must be a meaningful need for external money and it must generate sufficient momentum in the right time window. Sometimes it is the leverage needed to scale a business."
Harju is looking forward to 2025, as contextual targeting of digital advertising will increase rapidly. Where Neuwo will be in a year's time remains to be seen. What is certain is that the start-up's funding round would at least help it grab a significant share of the market.
Do you need a booster for international growth? Find out how we can help at our incubator.