NewIcon is a fast-growing medical technology company that manufactures automation solutions for hospitals and pharmacies with technology that relies on robotics and the Internet of Things. The company will allocate the funds from the EIB loan to the development and production of total pharmacy automation solutions. More precisely, the company will further develop its range of storage retrieval robots for pharmacies and automated dispensing cabinets for hospital wards. The EIB funds will also support the development of intravenous compounding robots and novel medication management software. All this addresses unmet and growing needs within the healthcare industry for increased efficiency and safety in medication management.
This transaction is supported by the new generation of financial instruments for innovative growth companies “InnovFin – EU Finance for Innovators”, with the financial backing of the European Union under Horizon 2020. “InnovFin MidCap Growth Finance” is specifically dedicated to improving access to risk finance for the research and innovation projects of midcaps and SMEs. Earlier beneficiaries of such EIB backing in Finland were the innovative companies Rovio and Kiosked.
Jan Vapaavuori, EIB Vice-President responsible for operations in Finland, said: “Midcap companies have a key role to play in competitiveness, job creation and growth in Europe. “InnovFin – EU Finance for Innovators” joint financial instruments aim to support midcap companies that consistently prove to be particularly strong in innovation. NewIcon, as a fast-growing and innovative company with solid growth potential, is an ideal candidate for this facility.”
Ossi Parviainen, NewIcon’s CEO, added: “Our solutions provide an answer to the global megatrend in health care, i.e. ageing, due to which pharmaceuticals are consumed at an increasing rate and nursing staff resources are under pressure. Automation is the remedy for ensuring patient safety. We have invested in product development and are beginning to see the results. We have plenty of new aces up our sleeves that we can pull out to challenge our global competitors. We are honoured to be included among such innovative companies as the mobile entertainment services company Rovio and the advertising technology company Kiosked. It is great to be the third Finnish company, and particularly a health technology company from Kuopio, to meet the EIB’s strict financing criteria for the InnovFin MidCap Growth Finance programme.”
The EIB loan will enable NewIcon to scale up operations quickly in a fast-moving market and help it maintain its competitive edge by providing finance to accelerate the company’s development and innovation activities. NewIcon currently employs more than 50 people and the number is expected to quadruple within the next three years. Staff will also be hired at international branches, the first of which was established in the United Kingdom in early 2016. Next, the plan is to establish a branch in each Nordic country.
EIB Vice-President Vapaavuori commented: “We are pleased to be partnering with NewIcon in this breakthrough operation as this will support the firm’s evolution from a local champion to a globally active industrial company. Supporting a successful European health technology enterprise will enable the EU bank to enhance Europe’s position as a major technology supplier and promote skilled employment opportunities.”
NewIcon’s CEO Parviainen said: “Our growth objective is to achieve a tenfold increase in revenue and to attain a one percent market share in global medicine supply automation by the year 2020. This constitutes a big slice for us in a growing market whose value is expected to reach 70 billion euros in the next few years, according to our studies. This means that we will also allocate funds from the EIB to investments in international growth to secure our access to new market areas.”
Initial funding was granted by the Finnish Funding Agency for Technology and Investment (TEKES) and private business angels, followed by the Finnish Industry Investment Oy (TEOLLISUUSSIJOITUS) and Finnish Mutual Pension Insurance Company (ETERA). The investment by the EIB, which was a natural step in the growth of NewIcon, will enable the sustainable expansion and development of the company into a wider international field. Future support will include equity investment, strengthening the company in its drive forward.
This challenging financial process took approx. 6 months from us and without the excellent team of experts, led by our CFO Kirsi Pohjolainen, this significant accomplishment would had been difficult to achieve. Valuable advisers in the process were Eeva Grannenfelt from Grannenfelt Finance Management Oy and Juha Wessman and Jan Johanson from Krogerus Attorneys Ltd.
The European Investment Bank is the long-term lending institution of the European Union owned by its Member States. It makes long-term finance available for sound investment in order to contribute towards EU policy goals. In 2015 the EIB fostered projects in Finland with loans totalling EUR 1.62bn – this is an all-time record high EIB commitment in Finland.
NewIcon Oy is a health technology company founded in 2007 by the current CEO Ossi Parviainen, and located in Kuopio. It currently employs about 50 people. Turnover in 2015 was approximately EUR 5.5 million and business shows strong growth. NewIcon is the market leader in pharmacy storage automation in Finland. The company’s roots go back to industrial automation, where NewIcon is a well-known supplier in extensive projects for large industrial players. In recent years, NewIcon has honed its skills to become a professional in automation solutions for medicine suppliers and has delivered systems to already more than sixty pharmacies and hospital pharmacies. Deliveries have already been made to several different countries. The company uses the certified ISO 9001 quality management system.
InnovFin financial products
Under Horizon 2020, the EU research programme for 2014-20, the European Commission and the European Investment Bank Group (EIB and EIF) have launched a new generation of financial instruments and advisory services in 2014 to help innovative firms access finance more easily. Until 2020, “InnovFin – EU Finance for Innovators” offers a range of tailored products which will make available more than EUR 24bn of financing support for research and innovation (R&I) by small, medium-sized and large companies and the promoters of research infrastructures. This finance is expected to support up to EUR 48bn of final R&I investments.
Backed by funds set aside under Horizon 2020 and by the EIB Group, InnovFin financial products support R&I activities, which by their nature are riskier and harder to assess than traditional investments, and therefore often face difficulties in accessing finance. All are demand-driven instruments, with no prior allocations between sectors, countries or regions. Firms and other entities located in EU Member States and Horizon 2020 Associated Countries will be eligible as final beneficiaries.
InnovFin MidCap Growth Finance offers long-term senior, subordinated loans or mezzanine loans, in order to improve access to finance mainly for innovative larger midcaps (up to 3000 employees), but also SMEs and small midcaps. Loans from EUR 7.5m to EUR 25m will be delivered directly by the EIB.
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