Aalto University: Aalto Startup Center’s alumni companies increased their turnover in 2020 despite COVID-19
The turnover of alumni companies of Aalto Startup Center operating at Aalto University increased by an average of five per cent in 2020. The development is in clear contrast with that of Finnish companies on average.
One of the alumni companies of Aalto Startup Center, which greatly increased its turnover during the first year of coronavirus, is CollectiveCrunch, which develops a platform for analytics of forests. Based on AI and big data analytics, the platform provides forest owners with information on the condition of forests and changes therein.
CollectiveCrunch, which employs some thirty people, had a turnover of approximately EUR 180 000 in 2019. In 2020, its turnover rose to EUR 1.1 million. The company will play an important role in creating and monitoring forest-based carbon sinks internationally, says Jarkko Lipponen, CEO of the company and one of its founders.
The number of profitable alumni companies also increased in 2020. The latest alumni growth review monitored the development of alumni companies’ business from 2017 to 2020. The review is carried out annually.
Starting up in the technology sector requires investments
Marika Paakkala, Head of Aalto Startup Center, points out that start-ups in the technology sector often require large investments in their first years. Turnover may only be generated a few years after a company has been founded, and a breakthrough will take place years later.
CollectiveCrunch has also followed this pattern. It was established in 2016, and the company’s growth in the first years was very moderate. Lipponen explains that the company’s turnover increased significantly in 2020, as the first commercial version of the platform was launched at that time. ‘It was rapidly put into use even in a traditional sector such as this one.’
CollectiveCrunch’s total turnover fell in the fiscal year 2021, but its recurring revenue continued to grow strongly. This was because a decision was made to focus on increasing recurring revenue flows instead of aiming for general turnover growth. From a technical point of view, this meant that a stronger focus was placed on platform and product development instead of one-off project work.
‘In 2022, recurring revenue is continuing to grow sharply. We have gained new customers in the existing and new markets’, says Lipponen.
Aalto Startup Center acts as a springboard
CollectiveCrunch was a client of Aalto Startup Center between 2016 and 2018. Lipponen is grateful for the business accelerator, as it has played a crucial role in the development of CollectiveCrunch.
‘Aalto Startup Center helped us understand the challenges of startup growth. We learned about financing, pitching, investments, business scaling, and more. We gained some valuable investor and advisor contacts that are still involved with our company.’
Usually, half of the companies founded in Finland cease to exist during their first five years. Just under four fifths of the companies established in the past 10 years at Aalto Startup Center are still in operation.
‘We provide startups with coaching and versatile support for developing their business. It is great that we have succeeded in serving as a good springboard for many companies. We are closely involved with the companies for many years, and advisors know the companies like the back of their hands’, says Paakkala.
Similarly to CollectiveCrunch, 22.5% of Aalto Startup Center’s 618 alumni companies operate in software design and manufacturing and 15.5% in management consulting. The next most represented sectors are IT hardware and software consulting, advertising agency work and industrial design. This partly explains why alumni companies survived 2020 with flying colours.
‘Many alumni companies are active in a sector where the impact of COVID-19 restrictions has been minor,’ says Paakkala. Aalto Startup Center has been conducting growth reviews of alumni companies since 2003.