Butterfly’s Fund IV takes flight with support from Nordic LPs

Fund IV is said to be one of the first venture capital funds based on EU Article 8 of the Sustainable Finance Disclosures Regulation.

Finnish investor Butterfly Ventures has held a first close on €47 million ($49.4 million) for a new fund targeting €100 million.

The new fund, Butterfly Venture Fund IV, will make seed investments in science-based deep tech and hardware start-ups in the Nordic and Baltic regions. Investors include Saminvest and Tesi, two state-backed private equity investors from Sweden and Finland, respectively. The fund expects to hold a second close in Q3, a third close in Q4 and a final close in spring 2023.

Fund IV is said to be one of the first venture capital funds based on EU Article 8 and the Sustainable Finance Disclosures Regulation.

“Responsibility and impact are in our DNA – we are committed to ensure that sustainability factors are a part of our investment decision procedure,” Juho Risku, Butterfly co-founder and partner, said in a statement. “From the beginning, our built-in mission is to make investments that matter in the world. We believe that sustainable operations also guarantee better financial results; value development and impact are directly linked.”

In addition to Risku, Butterfly’s team comprises managing partner and co-founder Matti Kanninen and partners Ville Heikkinen and Tanya Horowitz.

Thought Fund IV will be classified as Article 8, the firm’s impact measurement and reporting would “qualify well within even stricter Article 9 standards,” Horowitz told affiliate publication New Private Markets in an email.

Butterfly said it will measure the impact of the operations and product development of the companies that it invests in based on four primary dimensions: society, knowledge, health and environment.

Butterfly, based in Oulu, Finland, has made 84 investments across the Nordic and Baltic countries since its founding in 2012. It previously raised $17.8 million for Butterfly Venture Fund III in 2017 and $15.9 million for Northern Startup Fund I in 2012, according to PitchBook.

Toby Mitchenall of New Private Markets contributed to this story.