Estonian, Latvian, and Lithuanian venture capital and private funds raised a record EUR778m in investments last year. This is a 16 per cent increase compared to the previous year.
By 2023, the amount that Baltic private equity and venture funds still have to invest is close to EUR1.6billion. The amount invested in Baltic companies by 2023 was EUR239million, while 297 transactions involved Baltic companies last Year.
Kadri Lindale, managing director of Estonian Private Equity and Venture Capital Association said that there are more than 100 private and VC funds operating in the Baltic States, who are currently expanding their team and strengthening their expertise.
“The market is very strong and the last 2 years were very active when it came to attracting investment, which is why capitalisation is so good today.” Lindpere stated that this is a new trend. We are pleased to see more funds expanding their global reach through investments in new countries.
Kaari Kink is the chair of the Estonian Private Equity and Venture Capital Association’s management board. He said that the Baltic private and VC market has proven its resilience in spite of geopolitical and economical challenges.
Attracting foreign investment more actively than before
“Despite the difficult economic times, the amount managed capital today is unprecedented.” The public sector’s support has also decreased. This shows that fund managers are able to attract private capital. This is especially noticeable when it comes to venture capital funds. In the Baltics, the share of public sector is 10%, while the European average of 37%,” Kink said.
The analysis shows that Baltic funds expanded their international reach in the past year, attracting more foreign investments than ever before. They also attracted capital from European, Asian and North American markets. Last year, Estonian, Latvian and Lithuanian venture capital and private funds made 147 investments abroad with a value of EUR95million. Croatia, Ghana and Indonesia were the new countries in which investments were made.
In 2023, EUR53 million in total was invested into Estonian companies. 100 transactions were completed. Venture capital funds accounted for 56 percent of the total investment amount in the Estonian market. Investors in Estonia were, as in previous year, most interested in the local electronics and IT sector.
In 2023, new funds Plural Fund II NordicNinja Fund II 2C Ventures Fund I will begin their operations in Estonia. The national fund Smartcap has also expanded its operations. It started direct investments in Estonia last year to encourage green technology companies’ growth.
The Baltic Private Equity Market Overview 2023 has been prepared by the KPMG Baltics Deals Team and the Baltic VCAs, with the assistance of various experts. 42 fund managers from all three Baltic countries and more than 100 funds were involved in the preparation.