Greta Mieliauskaite. The Billion Awaiting Lithuanian Innovators
Just like a princess waiting in a tower for her rescuer, Lithuania's fund ecosystem is sitting on a pile of unused money, eagerly waiting for innovative ideas. There is currently €1.55 billion in available capital (known as dry powder) in the Baltic States, according to the latest report on the Baltic private equity and venture capital market. The best part is that businesses looking to tap into these funds won't have to battle any capital-guarding dragons.
Despite geopolitical tensions, economic uncertainty, and a global slowdown in venture capital investments, Lithuania remains resilient in the fund sector.
For startups and businesses, this translates to opportunities. The ecosystem has funds available for those seeking them, and the funds are ready to invest in innovative Lithuanian companies that promise growth and profit.
Market Accelerators – Venture Capital Funds
Last year, the Baltic region attracted over €778 million. While investments in this region are primarily focused on private equity funds, venture capital funds have significantly contributed to the growth of the Baltic region's fund market and available capital.
Looking specifically at the Baltic venture capital fund managers, they attracted over €542 million last year, making up 70% of the total capital raised by fund managers in the Baltic States.
Early-stage venture capital funding continues to grow actively in the Lithuanian and other Baltic markets, having more than tripled since 2020. Despite this, local funds' investments in Baltic tech startups constituted only 10% of the total capital raised by startups. The region's startups are attractive to foreign investors, giving this market segment significant potential to utilize the available funds and grow exponentially in the coming years.
Key Contenders for the Pot of Gold
Currently, the funds with the most available capital are those focused on early-stage risk, infrastructure, real estate, and buyout strategies.
Early-stage startups have particularly favourable conditions to attract free capital. Funds are constantly seeking innovative ideas with high growth potential, so Lithuanian startups in fields like health technologies, green energy, financial technologies, or artificial intelligence solutions have ample opportunities to attract investments.
The latter field also secured some of the largest sector investments in the US and Europe in 2023. One notable example is the solar park design software company PVcase. Last year, the startup attracted a $100 million investment, making it the third-largest investment round in the country's startup ecosystem history.
Looking at private equity investments, investments in infrastructure and real estate are gaining increasing momentum. Therefore, Lithuanian companies working on smart city solutions, sustainable infrastructure projects, or real estate technologies are attractive to investors.
There are also numerous opportunities for Lithuanian companies with a strong operational history and a clear growth plan – free capital can be a tool to scale up operations or enter new markets.
Whether you are developing an advanced artificial intelligence solution, an innovative health technology, or a sustainable energy project, utilizing free capital can turn your ideas into reality or even future unicorns, making Lithuania the new Silicon Valley.
