16.1 C
Thursday, June 30, 2022

Complete Baltic Investment & VC Market Overview

- Advertisement -

This is the story that will explain everything you need to know about the Baltic investment market, outlining the current trends, introducing the key players, listing major investments and exits. It does not get much more comprehensive than this, so grab a chair, get a coffee and dig in.


Before we start with the statistics and introductions, let us take a look at the Baltic investment market in general. The scene has been changing and developing and over the course of the last 5 years, the number of startups coming from the Baltic States was growing rapidly, most of them requiring seed and early stage investments.

The Baltic investment market started to take shape together with what many of our interviewees referred to as “the first wave” of startups. These were companies such as Delfi, Forticom, Moonfish Media. The Baltic startups were not of much interest to European and American investors at the time. As Sven Illing from GameFounders told us “it was better for a startup not to mention its origins from the Baltic states.”

But then SAF Tehnika, from Latvia, marked the first Baltic Tech IPO, valued at 52 million EUR and. This was quickly followed by the Skype success, which netted the Estonian co-founders around 200 million EUR and put the Baltic States on the global map.

Following this great exit and other early Baltic successes stories was the second wave of startups from the Baltic States, we are now nearing the end of this second wave with companies such as Getjar, Eskimi, Erply, GrabCad, Transferwise and others reaching maturity. We can expect to see a lot more exits from the second wave in the next two to three years, which should also add a number of good exit stories for Latvia and Lithuania.

With the second wave reaching maturity, we are now seeing an emergence of an exciting third wave. There is currently a very large number of new startups coming from the Batlics and as Allan Martinson of MTVP, tells us “the number of startups has exploded – probably increased three-five times.” Just think of companies such as Sellfy, Infogram, Dragdis, GateMe.

With these three waves of emerging companies from various industries, the investment market was also developing and changing. It would be fair to say that Estonia was leading the group with more local VC’s, angels and investments than in other countries. This can be attributed to the early success of companies such as MicroTask and of course Skype. However in the last couple of years Latvia and Lithuania have made a lot of efforts to catch up and we can expect a lot of new companies from there.

Perhaps the most important reason for this is the JEREMIE initiative which in 2007 was started by the European Commission together with the European Investment Bank and European Investment Fund (EIF). The EIF’s main purpose is to provide funding for SME’s and it is shareholders are the European Investment Bank, the European Commission and 30 privately owned financial institutions. The agreement for a JEREMIE holding fund was signed in July 2008 between Latvian Ministry of Economics and EIF. Similarly in October of 2008 the same agreement was signed in Lithuania in the amount of 290 million EUR. The funds will provide start-up and expansion financing to companies, taking equity stakes between EUR 0.3 – 3m.

These initiatives resulted in two new funds in Latvia: Imprimatur Capital and BaltCap; and four funds in Lithuania: BaltCap, Business Angels Fund, LitCap and Practica Capital. These are early stage funds, that invest into ICT but not all of them are focused just on the ICT sector.
Estonia, on the other hand did not join the JEREMIE initiative but the Estonian Parliament created their own national development fund called Arengufond with an ability to make venture capital investments. Nevertheless the country has a number of private VC’s and angels such as: MTVP, Ambient Sound Investment, and recently established business angels network EstBAN. as most of the interviewees pointed out, there is now a very large need for seed funding in Estonia but in Latvia and Lithuania there is already a very strong focus on seed funding.
But to understand the market completely, let us take a look at the main players in each country and their portfolios.



Ambient Sound Investments – With a portfolio of 20 companies from around the world, they focus strongly on technological and long-term competitive advantage. Over the past two years they have been less active on the investments as they focused on the current portfolio of companies and made a number of exits. ASI is not a typical VC as they are not a fund but instead manage assets of partners who invest their own money. They manage about €100 million worth of assets. Portfolio & Exits.

EstBAN – Estonian Business Angels Network was launched in November of 2012 by 25 founding members. Today they already have 40 active members and are building deal flow with more than 40 projects in the system. Here is a complete list of their members.

Gamefounders – GameFounders (GF) is an accelerator in the gaming space. GF invests €10-15k for 9% equity. They received applications to each batch from around 40 countries and have invested into European, Asian and South-American teams. Currently they also have Estonian and Lithuanian gaming startups in their portfolio. GF investors are business angels (some with gaming industry background) and institutional investors from the gaming and media.

MTVP – MTVP is a tech investment company that has been managing a VC fund called MartinsonTrigon (raised in 2005) and doing some direct investments as well.  Currently, it is basically a partnership between two people – Allan Martinson and Andres Susi. The current focus is on managing MartinsonTrigon’s legacy portfolio and building the companies they are directly involved with (Cherry Media +  some others). However they do not exclude returning to the VC market at one point. MTVP had €20 million fund size in their first Fund. Portfolio. Exits.

SmartCap/Arengufond – SmartCap is the investment division of the Estonian Development Fund (Arengufond) which is similar to the Finnish SITRA. They have a portfolio of 16 companies ranging from Biotech to Energy & Industry to Technological startups. They are also one of the key investors in the Startup Wise Guys accelerator. Portfolio.

StartupWiseGuys – Is an accelerator program based in Tallinn with a 10 week program. They take 8% in equity in return for €5 000 per founder up to €15 000. They are backed by 15 angel investors and a government VC fund – SmartCap. Portfolio.


BaltCap – Baltcap is a private equity venture capital investor that invests all over the Baltics however as mentioned earlier they have JEREMIE funds agreement in Latvia and Lithuania. This is why most of the investments are from either Latvia or Lithuania. They do not focus on ICT and their portfolio consists of 27 companies from various sectors, which includes ICT. They also list 29 exits.

Creandum – Creandum’s focus investment region is Nordics and Baltics. They are not a Latvian investor but have an advisor in the region to be closer to the deal flow starting from 2012. They recognize the fast emergence of the Baltic States as active hubs of startup activity and are investigating potential investments.

Imprimatur Capital – Is an early stage seed investor. They source their companies through a network of universities, research institutions and incubators. Their focus lies in digital media, enterprise data management, homeland security, medical technology, biotech, new materials and clean technology. Portfolio.

Rubylight – Rubylight was founded in 2010 by the key architects of Forticom group, which twelve years ago created and ran their first Latvian social network One.lv. Rubylight invests directly into companies but also provides talent, software and technology. They have recently invested into Ask.Fm, a startup with over 1 000 000 daily unique visitors and an Alexa rank of being the 196th most visited website in the world.

LitCapital –  Established in 2010, they are an Lithuanian fund that invests €2-10.4 million with a funding period of three to six years. They were established under JEREMIE initiative and have a fund size of €25 million. Portfolio.

Verslo Angelu Fondas (Business Angels Fund) – a fund co-investing with business angels in sizes from €50 000 to €400 000 per company. Their fund size is €8.42 million and the investment period ends on the 31st of December 2015. To date they have invested into 13 companies. Portfolio.

Practica Capital – venture capital fund that was established under the JEREMIE agreement focusing on early stage development of high growth startups. Their range is from €3 000 to €3 million. They are also establishing a startup accelerator / Startup.lt and have a convertible note deal with StartupHighway. From our interviews we found out that they have also given out a few large valued convertible notes. The fund size is €6 million and they have invested into six startups in 2012. Portfolio.

StartupHighway – StartupHighway is an accelerator in Lithuania. They provide €14,000 in seed funding – €2,000 for the idea and €3,000 for each founder up to 4. They take a fixed 7.5% in equity. In addition the startups can opt-in for €30 000 convertible note from Practica Capital. StartupHighway has 7 individual investors from Lithuania, Latvia and Estonia who provide pre-seed funding for portfolio companies. Also recent deal with Practica Capital broadens the funding alternatives. From their very first batch, Sellfy has gotten worldwide recognition and recently Dragdis performed very well after we published a story on them. Here is a complete list of their portfolio companies.

S2 – S2 Partners is also an early-stage investor in Lithuania with offices in New York, San Francisco and Vilnius.


With over €40 million in yearly investments, there are definitely a lot of companies to list but we will try to bring out the largest investments and exits in the region during the course of the last couple of years.


GrabCad – €12 million, Eesti Arengufond, Astrec Baltic, Seedcamp, Techstars, Matrix Partners, Atlas Venture, NextView Ventures, Angels, 2010, 2011, 2012
Fits.me – Around €8 million, SmartCap, Conor Venture Partners, Fostergate Holdings Limited, The Entrepreneurs Fund, 2009, 2010, 2012, 2013
Fortumo – €6,25 million, Intel Capital, Greycroft Partners, 2013

When it comes to Estonia we were also able to get a hold of a summary table that was crowd sourced and put together by Martin Villig from Garage48. This is but an indication of what is happening in the Estonian investment market and does not account for all of the investments.


Key: – size, buyer/investor, year

Skype – €200 million to Estonian co-founders, sold to Ebay, 2005.
Delfi – €5.1 million, sold to Findexa, 2003, later bought by Ekspress group for 54 million EUR, 2007
MicroLink – Approximately double the size of the SAF Tehnika deal, merger with Eesti Telecom, 2005
Moonfish Media – Approximately €10 million, Naspers, 2012
Zeroturnaround – €4.29 million, Bain Capital, 2012
Smartpost – €1.3 million of Estonian Development Fund Stock, Itella, 2010.
CV Online – Undisclosed amount, Alma Media, 2012


Ask.FM – Multiple rounds of undisclosed amounts, Rubylight


SAF Tehnika – €52 million, IPO, 2004
Forticom – Undisclosed amount, Digital Sky Technologies, 2010
Inbox.lv – Undisclosed amount, DDT.


GetJar – €40 million, Accel, 2007, 2010, 2011
Yplan – €1.3 million USD, Wellington partners, Octopus Investments, 2012


The Baltic Investment market has come a long way since the beginning and there is now a growing number of companies and entrepreneurs that are supported by seasoned members of the community from the first two waves. Additionally there are various financiers and government initiatives available in all three countries. Finally previous successes also attract talent and ambitious entrepreneurs in addition to recognition of the global markets.

With these developments and changes, it is now becoming an asset for startups to be from the Baltic States.

And although the overall market in the Baltic States is tiny, it is also one of the reasons for growth. Since the companies realize very quickly that the home market will simply be too small to generate decent revenues, they have little choice but to think global, which is also why international VC’s and investors are interested in the region.

For instance investors such as Dave McClure and Naval Ravikant are praising companies from the region. McClure even invented the now famous #EstonianMafia Twitter hashtag. While Ravikant compared Estonia to London in terms of the hottest areas for startups in Europe in one of his interviews. Vitaly Rubstein from Rubylight tells us that “the investment soup is starting to cook and soon it will be boiling. The companies and people from Latvia and the Baltics are starting to think global, which was not the case previously. ”

From our calculations and input from the interviewees, Baltic companies have raised around 45 million EUR in 2011. Out of those, most were seed and early stage rounds. As we mentioned earlier and as is clear from the analysis, Latvia and Lithuania are investing a lot into early stage companies thanks to JEREMIE funds. However according to many of the respondents, the A-Round investments have dried up with ASI, MTVP and Estonian Development fund not investing as actively as before. Both MTVP and ASI are however considering raising new funds and Estonian Development Fund is planning to turn itself into a fund-of funds. These developments certainly propose very interesting years ahead of us.

We would like to thank all of the people that helped us to bring this information to you, especially those that found the time to comment and add data:

Allan Martinson (MTVP), Sven Illing (GameFounders), Herty Tammo (Gamefounders), Margus Uudam (Ambient Sound Investments), Agnė Adomaitytė (StartupHighway), Andris Berzins (Creandum, TechHub Riga), Vitaly Rubstein (Rubylight), Ivar Siimar (EstBAN).

International VC Zone
Editor’s Note: This post is part of a partnership with International VC Zone.

The purpose of International VC Zone is to increase the activity of international risk capital investors in Finland, the greater St. Petersburg area in Russia, and the Baltic States of Estonia, Latvia and Lithuania. VC Zone offers financiers services that facilitate entry to these markets, by increasing visibility among local companies and making reaching them as easy as possible. International VC Zone helps financiers find interesting opportunities, organize meetings and visits, and network with local financiers and other players. VC Zone strengthens International financiers’ networks by sharing them and introducing them to the players in the Baltic Sea Region.

Partners of International VC Zone are Aalto Center for Entrepreneurship, Greater Helsinki Promotion, Sitra, Technopolis, and Tampere. Upcoming events for investors and financing seeking companies, reports and news can be found also at our home page: www.vczone.fi

Top Image Courtesy of Shutterstock.

- Advertisement -

Related Articles


Stay Connected

- Advertisement -

Latest Articles