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Tuesday, February 27, 2024

Practica Capital secures €80 million, becomes largest seed fund in Baltic tech landscape

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Practica Capital has successfully closed its largest fund to date, Practica Venture Capital III, at €80 million, making it the largest seed fund in the Baltic region. This fund is a significant step up in size compared to its predecessor and positions Practica Capital as a leading early-stage investor in the Baltic region. The European Investment Fund (EIF) joined as a key investor, along with other institutional partners, and the fund exceeded its hard cap. Practica Capital’s focus on technology investments, especially in areas like SaaS and Deep/Industrial tech, has already resulted in over €10 million deployed to support six startups. The fund aims to fill a funding gap in the maturing Baltic tech ecosystem, contributing to the region’s venture capital landscape and providing crucial support to early-stage tech ventures in Lithuania, Latvia, and Estonia.

“The majority of capital deployed at early-stage in Europe is domestic. We saw the clear funding gap in a maturing Baltic ecosystem,” said Arvydas Bložė, partner at Practica Capital. “We are pleased to facilitate the interest of Baltic pension fund managers alongside the continuous support by EIF, EBRD, and INVEGA. Venture capital in the Baltics is finally emerging as an asset class and it is a game changer.”

The final closing was completed with the European Investment Fund (EIF) joining as a cornerstone investor. European Bank for Reconstruction and Development (EBRD), SEB Investicijų Valdymas, and Investicijų ir Verslo Garantijos (INVEGA) joined Swedbank Investicijų Valdymas and Swedbank Investeerimisfondid as anchor investors. Institutional capital comprised more than 80% and returning capital more than 70% of the commitments. The fund was once again supported by many individual LPs, such as the co-founders of Lithuanian unicorns Vinted, Nord Security, and other successful tech companies, including several Practica Capital previously backed startups.

EIF Chief Executive Marjut Falkstedt said: “After the EIF supported the 2012 vintage fund, which pioneered venture capital in Lithuania, this new fund is set to become one of the largest early-stage funds ever launched in the Baltics. With highly skilled fund managers at the helm, we firmly believe that the launch of Practica Venture Capital III, backed by the InvestEU programme and the Baltic Innovation Fund 2, will play a pivotal role in both fortifying the region’s emerging venture capital ecosystem and also ensuring a steady flow of seed funding for ambitious local entrepreneurs, a crucial factor considering the challenging economic landscape ahead.”

Seed to Series A graduation cohort approaching 40%, 0.7x DPI achieved in 2023, top quartile performance for Europe at Practica Venture Capital II, and robustness and resilience of Baltic tech ecosystem contributed to the investor appetite surpassing the hard cap of the fund even during the period of market recalibration and tough fundraising environment.

Practica will continue its role as lead investor and support the break-out attempts of the early-stage tech startups in Lithuania, Latvia, and Estonia. The strategy is tailored for the seed stage and is equipped to deploy up to €3 million in initial tickets and support winning companies up to €8 million over the lifetime of the fund. The fund has already deployed more than €10 million and backed 6 companies, such as Heavy Finance, Sentante, Amlyze, and Breezit. 3 companies are in the term sheet stage.

“We are a local lead investor serving and evolving with the ecosystem and acting from within.“ said Donatas Keras, founding partner at Practica Capital. “With recent team expansion, we now have secured a presence in Latvia and Estonia, and we are excited to finally fulfill our promise for the ecosystem in the Baltics.”

Practica Capital remains focused on technology investments, with a solid track record in SaaS, Marketplaces, and Deep/Industrial tech. To date, Practica Capital has an AUM of more than €130 million and has invested in over 60 companies in total, including emerging category leaders such as PVcase, TransferGo, Interactio, Montonio, Ovoko, Eneba, and others.

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Nurcin Metingil
Nurcin Metingil
A permanent student, a passionate first reader and nowadays doing master’s degree in Publishing Management. Beside these, I am up for games! I have been playing games since I was 6. Now, I am whispering "Business. Business. Numbers. Is this working?"

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