Growth capital investments of approximately EUR 850 million are available for Latvian companies in the next few years from private equity and venture capital funds registered in Latvia and from funds based elsewhere with an interest in Baltic companies, the Latvian Private Equity and Venture Capital Association (LVCA) informs.
“Growth capital investments are now available in really large volumes, funds are now very actively looking for companies with ambitious future growth potential,” says Kristīne Bērziņa, LVCA Board Chair and Partner at Livonia Partners. “With a well-developed and sustainable business idea, Latvian entrepreneurs can confidently look also in the direction of foreign private equity and venture capital funds, which have also set Baltic companies as their investment target. Growth investment is a major driver of the economy, fostering innovation, creating new jobs and helping businesses to grow.”
Latvia’s largest investment fund to date launches
KS Livonia Partners Fund II was launched in September this year. It plans to offer €147 million of capital in the coming years, with a particular focus on business ideas that address climate change and environmental sustainability. The fund will offer investments at both growth and buyout stages.
“The registration of the new fund is a great benefit for local companies to get their ideas off the ground, but be prepared to compete fiercely with other Baltic and European companies for funding. Several Latvian companies have already proved that by attracting growth investment capital, it is possible to rapidly grow a company, expand knowledge and contacts, and improve management processes, which allows them to conquer the global market,” emphasises K.Bērziņš.
The largest funding for buyouts
Currently, the largest investments are available for buyouts – more than €400 million offered by 7 private equity and venture capital funds. These deals are typically done at the maturity stage of a company, when a private equity fund buys out another company by acquiring shares from the existing owners.
Currently, 6 funds in Latvia provide investments in growth stage companies. These funds can be invested in production development, expansion of services, entering new markets, buying out competitors or other investment projects that are important for the company.
Late-stage venture capital investments are available from 4 funds and early-stage investments from 14 funds. More information on the funds and their investment stages is available in the “Baltic Private Equity and Venture Capital Market Overview” study published by Deloitte and all Baltic Private Equity and Venture Capital Associations in June this year and on the LVCA website.
LVCA strongly encourages ambitious idea generators to actively take advantage of the early stage investment opportunities available now in combination with acceleration programmes. The investment period for the accelerator funds set up through Altum ends in the middle of next year and there is currently uncertainty about the continuation of these programmes.
“Since 2018, when Altum started supporting accelerator funds in Latvia, around 100 investments have been made in early and high-growth companies. These are significant investments that have given Latvian start-ups the opportunity to grow internationally. Latvia is a good starting point for companies to move on to the Nasdaq Alternative List, international acceleration programmes or to start collaborations with large multinational industrial corporations. This is also an opportunity to create new jobs here in Latvia,” says Matīss Neimanis, Managing Partner of Buildit Latvia.
Bercman technologies, a company supported by Latvian accelerators, has been listed on the Nasdaq Alternative List, and several companies have qualified for important international accelerator programmes, such as YCombinator (Lastbit), EIT Raw materials (Catalyco, 3D Strong), EIT Health (Semantic Intelligence), Brightlands accelerator (Catalyco, Adianano tech), Imec.Istart” (“InLable”), many have started collaborations with large multinational industrial corporations (“Squad Robotics”, “PurOceans”, “Catalyco”, “3D Strong”, “Empyrio”, “Crystals Growing”, “Chemcode”) or have started marketing their products in the US (“Roboeatz”, “Winmill”).