FUNDRAISING NEWS: Practica Capital closes €80 million fund committed to early-stage investments in the Baltics
Our member Practica Capital announced the final closing of its third vintage and largest fund to date at an €80 million hard cap. Practica Venture Capital III is a 3x uptick in size from its predecessor and will significantly increase the capital available for the Baltic founders. The fund is the biggest seed fund in the region to date and establishes Practica Capital as a pan-Baltic early-stage investor.
“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.
About Practica Capital
Practica Capital is an early-stage VC dedicated to backing Baltic founders. The firm has been invested exclusively in tech potential in the Baltic States for over 10 years. Practica Capital backs great founders in their ambition in seed, selected pre-seed, and Series A stages and partnering with them as company builders. Practica Capital manages four funds with more than €130m in AUM. To date, the firm has made over 60 investments, including great companies like PVcase, TransferGo, Interactio, Eneba, Ovoko, Trafi, CGtrader, and others.
About European Investment Fund
The European Investment Fund is part of the European Investment Bank Group. Its central mission is to support Europe’s small and medium-sized enterprises (SMEs) by helping them access finance. The EIF designs and develops venture and growth capital, guarantees, and microfinance instruments that specifically target this market segment. In this role, the EIF furthers key EU policy objectives such as competitiveness and growth, innovation and digitalization, social impact, skills and human capital, climate action and environmental sustainability, and more.
The InvestEU programme provides the European Union with crucial long-term financing by mobilizing significant public and private funds to support a sustainable recovery. It helps generate additional investments in line with key EU priorities, such as the European Green Deal, the digital transition, and support for SMEs. The InvestEU programme brings together a multitude of EU financial tools to support investment by making project financing simpler, more efficient, and more flexible. The programme has three components: the InvestEU Fund, the InvestEU Advisory Hub, and the InvestEU Portal. The InvestEU Fund is implemented via various financial partners. They will invest in projects by using the EU budget guarantee of €26.2 billion to mobilize at least €372 billion in additional investments.
- About Practica Capital: https://practica.vc/en