the state of the lithuanian startup ecosystem · estonia €128m lithuania €110m ... • startup...

The State of the Lithuanian Startup Ecosystem

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NOVEMBER 2019

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Contrarian Ventures is an early-stage European Venture Capital firm focusing on

investments in emerging technologies in the energy and e-mobility sector. Primarily

based in Vilnius, Lithuania and with venture partners in the UK, the Netherlands and

Israel, Contrarian Ventures is an active player in European venture capital tech scene.

With a portfolio of 14 companies across a variety of countries and verticals such as

energy storage, e-mobility and hydrogen (among others), they are aiming to become the

go-to platform in Europe for founders, LPs, industries and other VCs that want to build a

more inclusive energy tech and e-mobilityecosystem.

This report is brought to you by:

Startup Lithuania is the national startup ecosystem facilitator, powered by Enterprise

Lithuania, the governmental institution under the Ministry of Economy and Innovation.

Startup Lithuania connects different players of the startup ecosystem, organizes

different events, hackathons and Startup Fair – the main startup event of the year. As

well as Startup Lithuania provides consultations for startup founders, administrates

Startup Visa and Startup Employee Visa – talent attraction programs, designated to

attract non-European startupfounders and employeesto Lithuania.

Koinvesticinis fondas is a venture capital fund that invests alongside other groups of

business angels or funds. During the investment period, the Fund is capping its return to

6% annually. Excess return is a premium to private investors who co-invest with the

Fund. A co-investment fund is an umbrella fund designed to encourage the development

of venture capital community in Lithuania. The Fund's has more than EUR 28M available

for investment. Formore information visit:www.koinvest.lt/en.

TGS Baltic is a full service top-tier law firm, well known for its business-oriented mindset.

TGS Baltic has a great deal of experience in advising local and international businesses,

the public sector, working with the European Central Bank, the European Investment

Bank, institutions of the European Union, and collaborating with leading international

law firms. In addition to that, it is also the only law firm in the region supporting startups

through the UP HUB initiative - a free of charge platform aimed at providing quality legal

assistance for those looking to become the next unicorns.

1. Venture Capital in the Baltics

€ 0.3B € 0.6B

€ 1.0B € 1.3B

€ 2.4B

€ 3.8B

€ 5.5B

2013 2014 2015 2016 2017 2018 2019YTD

Page / 5

Venture Capital in the Baltics

Value created by Baltic startups since 2013.

Source: Dealroom.co.

Most valuable startups in the Baltic region

The State of the Lithuanian Startup Ecosystem | November 2019

Baltic startups have created over €5 billion in value since 2013.

Page / 6


$175MEstonia

€128MLithuania

€110MLithuania

$60MEstonia

$50MEstonia

$25MEstonia

$14MEstonia

$11MEstonia

$7.7MEstonia

€5MLatvia

Venture capital investment in the Baltics

Source: Dealroom.co. Excludes buyouts, secondary transactions, debt, ICOs, lending capital, grants.

Top rounds in the Baltic region

Across the Baltics, over €1.5 billion has been invested since 2013, as a result of several large VC rounds such as Bolt, Vinted, Citybee, Monese, Pipedrive, Starship.


€ 108M € 122M

€ 220M

€ 110M

€ 411M

€ 534M

€ 283M

2013 2014 2015 2016 2017 2018 2019 YTD

Page / 7


Source: Dealroom.co. Excludes buyouts, secondary transactions, debt, ICOs, lending capital, grants.

Estonia Lithuania Latvia

+88% +135% +8%

Average Growth (2013-2018)

…and it’s showing a substantial growth since 2013. Lithuania has the highest growth rate in the region.


Venture capital investment in the Baltics by country.

€ 59M € 68M

€ 138M

€ 77M

€ 365M€ 347M

€ 179M

€ 38M € 36M€ 61M

€ 12M€ 26M

€ 175M€ 158M

€ 11M € 18M € 22M € 21M € 20M € 12M € 15M

–

€ 100.0M

€ 200.0M

€ 300.0M

€ 400.0M

2013 2014 2015 2016 2017 2018 2019E 2013 2014 2015 2016 2017 2018 2019E 2013 2014 2015 2016 2017 2018 2019E

Page / 8


Source: Dealroom.co

VC investments since 2013.


By invested venture capital, Lithuania ranks #4 in CEE and #2 in the Baltics.

€ 1,173M

€ 1,085M

€ 941M

€ 503M

€ 308M

€ 163M

€ 136M

€ 112M

€ 101M

€ 94M

€ 51M

Estonia

Romania

Poland

Lithuania

Hungary

Czech Republic

Croatia

Latvia

Slovenia

Bulgaria

Slovakia

Page / 9


Source: Dealroom.co

Number of funding rounds since 2013.

813

477

408

326

318

308

252

236

213

145

80

Poland

Estonia

Hungary

Lithuania

Czech Republic

Bulgaria

Romania

Slovenia

Latvia

Slovakia

Croatia

The State of Lithuanian Startup Ecosystem | November 2019

By number of rounds, Lithuania ranks #4 in CEE and #2 in the Baltics.

The State of the Lithuanian Startup Ecosystem | November 2019Page / 10


The Baltic region has created one third of total unicorns in Central & Eastern Europe, and 3% of unicorns in total Europe, worth a combined €13 billion…

Source: Dealroom.co

55

299

98

5 115

UK Germany France Nordics CEE excl. Baltics Baltics TotalBaltics

Number of unicorns created since 2013 per hub.

Page / 11


Source: Dealroom.co

TOTAL VALUE OF

UNICORNS€11.8B €1.0B N/A

UNICORNS

RISING

STARS

Estonia Lithuania Latvia


…and many fast-growing rising stars are in the pipeline across the region.

2. Lithuanian Tech Ecosystem Potential

Page / 13

Lithuanian Tech Ecosystem Potential

invested in Lithuanian tech since 2013

€300M+

of the startups are deep tech

16%

Startups and scaleups are based in Lithuania

900+

Professional software developers in Lithuania

27K

Globally for ease of doing business11th

To register a business using an e-signatureOne Day

In CEE region, 23rd in the worlds for e-gov development3rd

In the world for procedures to start a business2nd

Vilnius ranks first by number of greenfield projects per capita1st

How does Lithuania attract startup founders and investors?


Population: ~2.8M

How Big Is the Lithuanian Startup Ecosystem?

Page / 14


Source: Dealroom.co

Value created in Lithuania since 2013 Most valuable startups in Lithuania

€ 0.0B

€ 0.2B € 0.2B

€ 0.3B

€ 0.5B

€ 0.9B

€ 1.9B

2013 2014 2015 2016 2017 2018 2019YTD

Since 2013, Lithuanian tech startups have created €1.9 billion in value, and over 8.3Kdirect startup jobs.


Page / 15


Source: Dealroom.co

Venture capital investment in Lithuania.

€128MSeries E

€10MSeries A

€2.5MSeed

€2.5MEarly VC

€2.4MSeed

€2.1MSeed

€1.6MSeed

€1.5MSeed

€0.75MSeed

€0.6MSeed

Selected funding rounds in Lithuania in 2019


The Lithuanian ecosystem is still in early stages of development. Since 2013, almost €500M has been invested, mostly driven by a few large rounds.

€ 38M € 36M

€ 61M

€ 12M € 26M

€ 175M

€ 158M

2013 2014 2015 2016 2017 2018 2019E



Source: Dealroom.co

INVESTORS TYPE STAGE FOCUS NOTABLE INVESTMENTS

Contrarian Ventures VC Fund SeedEnergy Tech and

E-Mobility

Practica Capital VC Fund Seed, Early VC Generalist

Open Circle Capital VC Fund Seed Generalist

Iron Wolf VC Fund Seed Generalist

70Ventures VC Fund Seed Generalist

Startup Wise Guys Accelerator Seed Generalist

Ko-Investicinis Angel Fund Seed, Angel Generalist

Business Angels Fund II VC Fund Seed, Early VC Generalist

Page / 16

Selected local investors active in the ecosystem.



Supporting Governmental Institutions

• Startup Lithuania is the main coordinator and facilitator of the startup ecosystem in Lithuania helping start-ups get started and succeed.

• Non-profit agency under Ministry of Economy and Innovation. It helps you find a reliable business partner in Lithuania.

• The Agency for Science, Innovation and Technology provide qualitative and professional services aiming to foster the development of Lithuanian science, industry and services sectors.

• The official governmental agency for Foreign Direct Investment and Business Development providing free advise and support for global companies interested in doing business in Lithuania.

• The Official Business and Tourism Development Agency of the City of Vilnius. Go Vilnius works with all the national partners above to promote international business and talent in the city.

• The Mobility Innovation Center, initiated by the Ministry of Transport and Communications, is a platform on a mission to attract innovation to Lithuania’s transport and communications sector.

• The Public Institution Lithuanian Business Support Agency is a non-profit institution established by the Ministry of the Economy and Innovation administering the European Union funds granted for the development of Lithuanian business, R&D, tourism, and energy sectors.

• Lithuanian Business Angel Network (LitBAN) fosters business angel activity through communication, events, networking, syndication of deals both locally and across Nordics.

• A tribe of innovation managers who help entrepreneurs to develop their business, scale and attract funding through various programs.

Lithuania has a clear strategy for attracting tech start-ups through a focus on emphasising its business-friendly regulatory environment and open data policy…

Co-working spaces and hubs

Vilnius

…

Kaunas Klaipėda

Kultūros fabrikas

GeneralSpecialised

http://www.govilnius.lt/coworking-spaces-in-vilnius/



Page / 18

Baltic Innovation Fund II INVEGA

• Launched in 2019

• Over the next five years, the Baltic Innovation Fund II (EUR 156m) will invest in private equity and venture capital funds that focus on the Baltic States.

• The European Investment Fund (EIF) contributing a further EUR 78m.

• KredEx (Estonia), Altum (Latvia) and Invega (Lithuania) are contributing EUR 26m each.

• In addition to other private investors, the total amount available for investments into the Baltic companies will reach over EUR 300m.

• First investments deployed: Change Ventures Fund II (Nov 2019) and BaltCap PE Fund III (Oct 2019).

• Baltic Innovation Fund I consisted of €130M and has already been fully committed (BaltiCap Growth Fund, BaltCap Private Equity Fund II, BPM Mezzanine Fund, Livonia Partners Fund, INVL Baltic Sea Growth Fund and Karma Ventures Fund I)

• Launched in 2001

• INVEGA is a financial entity incorporated by the state. The main objectives of operations of the entity are as follows:

• Providing Strategic orientation.• Managing soft loan instruments.• Issuing loan guarantees.• Providing global grants.• Creating venture capital funds.

• In 2016, INVEGA and the European Bank for Reconstruction and Development (EBRD) signed a cooperation agreement to help Lithuania implement risk capital instruments to develop its private equity and venture capital markets.

• In 2017, INVEGA has established a subsidiary company UAB "Kofinansavimas" with the purpose to create Co-Investment Fund which, together with private investors, willco-invest into small companies operating for less than 5 years:

• Includes 120 business angels and venture capital funds (Including Contrarian Ventures).

• 4 sub-funds with different investment strategies and sources, mainly focused on micro and small enterprises.

…and through governmental financing.

Startup Sandboxes

Blockchain Sandbox by Bank of Lithuania

IBM and IT services firm Tieto were selected as the finalists contending to develop the

blockchain platform

Open Banking API Sandbox by Swedbank

Lithuania

Companies can try and test functionality of integrations, and in next stages can get access

to live data and integrations

Open Banking API Sandbox by SEB Baltics

Developers and companies can get live access to customer data to build convenient

applications and services for customers

PropTech Sandbox by PropTech Baltics

RealBox is the first proptech sandbox in the world, aimed at companies and inviting them

to test and pilot their projects in Lithuania

Energy Sandbox by Ignitis Group

Companies in the energy sector will provide free access to the infrastructure and data it manages, enabling participants to test new technology solutions in real-life conditions.



The regulatory sandbox allows potential and existing financial market

participants to test financial innovations in a live environment under

the guidance and supervision of the Bank of Lithuania.

SubmissionThe startup founder and his team provides reasonable arguments proving

that the financial innovation meets the eligibility criteria.

EvaluationThe Bank of Lithuania reviews and evaluates the application.

TestingThe startup and Bank of Lithuania agree on testing conditions such as duration

and protection of consumer rights, among others.

ImplementationIf the testing is successful, the startup has the green light to implement the

financial service after obtaining a license, if applicable.

However, the biggest advantage are the Sandboxes.

https://www.lb.lt/en/regulatory-sandbox

https://www.swedbank.com/openbanking.html

https://www.seb.ee/eng/open-banking

http://proptechbaltic.com/realbox/

https://ignitisinnovation.com/open-infrastructure/

Real estate

Enabling software

Mortgage & lending

Wealth management

PaymentsBanking & Insurance

Blockchain & Crypto



Source: Dealroom.co

"I'm very excited to see that Lithuania has emerged as one

of the European Fintech hubs. We are playing well on our

strengths which is a tech-savvy population with passion for

financial services. This in combination with a progressive

regulator focused on enabling the good innovators, is a

winning formula. Plenty of challenges ahead but I'm

positive we are on the right track."

Daumantas Dvilinskas

CEO at TransferGo.

Fintech startups in Lithuania flourish in a regulation-friendly environment. Today, it has rising stars across all key verticals.



Source: Dealroom.co. (1) ICO values are based on Ethereum/EUR value at the fundraising date.

Selected (ICO) fundraisings(1) in Lithuania

€151MFeb 2018

€40MFeb 2018

€37MAug 2017

€20MDec 2017

€18MJan 2018

€16MFeb 2018

€16MFeb 2018

€6MJul 2019

Regulatory framework

Lithuania's Ministry of Finance has issued guidelines on ICO’s, outlining

when cryptographic tokens would be viewed as securities and how each

token sale should be regulated.

The most defining part of the structure is ‘grants profits or governance

rights’ to obtain the token through an ICO.

All rights are given to tokens that are used as a payment tool, but dissects

by participating in the secondary market exchanges and whether the ICO

itself is a crowdfunding activity.

Lithuania has raised more than €360M and is one of the most active countries in the world of ICOs.

Source: Stack Overflow State of CEE Tech 2016

Number of developers per country (in thousands)


Page / 22

Developers per 100 people in labour force


254

118

100

80

51

38

27

24

20

18

Poland

Romania

Czech Republic

Hungary

Bulgaria

Slovakia

Lithuania

Slovenia

Estonia

Latvia

3.7

3

1.9

1.8

1.8

1.7

1.5

1.4

1.2

0.9

Slovakia

Estonia

Czech Republic

Hungary

Lithuania

Latvia

Bulgaria

Poland

Romania

Slovenia

With 27K developers, Lithuania has the highest concentration of tech talent in the Baltics.



Page / 23

31%

0%

20%

40%

60%

80%

100%

2013 2014 2015 2016 2017 2018 2019YTD

% of rounds where a foreign investor (outside Baltics) has participated.

After 2016, foreign investor’s appetite in Lithuanian tech has increased…

Source: Dealroom.co



Name Employees Investors Source of fund Total funding

Vinted 300Accel, Insight Partners, Hubert Burda media, Sprints Capital,

Lightspeed Venture Partners and othersUS, Germany, UK €232M

TransferGo 170 Seventure Partners, Seedrs, Vostok Emerging Finance France, UK, US €40M

Trafi 70 Octopus Investments, EBRD UK €13M

AimBrain 17 BGF Ventures, Episode 1 Ventures UK €4.5M

Genus AI 10 Hannover Digital Invest, Maschmeyer Group Ventures Germany, US €4.0M

OME Health 5 Inventure Finland €1.2M

Eneba 43 InReach Ventures UK €2.5M

Argyle 15 Bain Capital, Checkr US €2.4M

cgtrader 65 Intel Capital, Practica Capital, Karma Ventures US, Estonia €2.2M

DappRadar 19Naspers Ventures, Blockchain.com Ventures,

and Angel Invest BerlinNetherlands, US, Germany, €2.1M

Page / 24

…especially from western Europe & the US.

Source: Dealroom.co



Page / 25

Connecting Shopify merchants with suppliers who ship products directly to consumers

Multi-Purpose Nano-Satellite Bus SaaS for small appointment-based businesses

Industry: E-commerce

Launch year: 2015

Employees: 70+

Industry: Aerospace

Launch year: 2014

Employees: 40+

Industry: SaaS

Launch year: 2008

Employees: 10+

Investors: InReach Ventures

Exit: Acquired in 2017 by Shopify

Valuation: $15M

Investors: Practica Capital

Exit: Acquired in 2018 by AST

Valuation: ~$30M (estimate)

Investors: N/A

Exit: Acquired in 2012 by Treatwell

Valuation: N/A

Some VC backed exits across different sectors have already been realised.

Source: Dealroom.co

Page / 26

Source: Dealroom.co. Rounds since 2013.


€ 0.44M

€ 1.04M

–

€ 0.2M

€ 0.4M

€ 0.6M

€ 0.8M

€ 1.0M

€ 1.2M

2013 2014 2015 2016 2017 2018 2019

Median Average

The evolution of the median Seed round in Lithuania.


A sign of the ecosystem growing up: the average and median size of a seed round is increasing, getting closer to the more mature tech ecosystems.

Page / 27

Source: Dealroom.co

Venture capital investment per capita (2013-2018 average)


€ 80

€ 53

€ 33

€ 33

€ 18

€ 7

€ 4

€ 3

€ 3

€ 2

€ 2

United Kingdom

Estonia

France

Germany

Lithuania

Latvia

Slovenia

Poland

Czech Republic

Hungary

Bulgaria


On a per capita basis, Lithuania still has a massive upside potential compared with other European countries.

HQ: Vilnius, LT

Investors: Bootstrapped

Founded: 2008

Employees: 780+

Total funding: None

Founders: Tomas Okmanas, Eimantas Sabaliauskas

HQ: London, UK / Vilnius, LT

Investors: Practica capital, Seedrs, Vostok Emerging Finance and others.

Founded: 2012

Employees: 170+

Total funding: €40M

Founders: Edvinas Šeršniovas, Daumantas Dvilinskas , Justinas Lasevičius,

Arnas Lukoševičius

HQ: London, UK / Vilnius, LT

Investors: Practica capital, Octopus Ventures, BaltCap and others.

Founded: 2013

Employees: 90+


Founders: Mantas Vizbaras, Martynas Gudonavicius, Dr. Jurgis Pasukonis



Success stories:

Source: Dealroom.co

HQ: Vilnius, LT

Investors: Accel Partners, Insight Partners, Hubert Burda Media and others.

Founded: 2008

Employees: 300+


Founders: Justas Janauskas, Milda Mitkute, Mantas Mikuckas



“Just 10 years ago Lithuania was not even on the map of Venture Capital. There was almost no way

to raise capital for a tech company. But our hunger for innovation and hard work combined with

strong survival instinct broke the ice. Today I'm very proud to see world class products made in

Lithuania by very talented and dedicated people. We proved that we could win dominant positions

in global markets while teams are fully operating from here. Soon there will be first unicorns and

this is just the beginning.”

Mantas Mikuckas

Co-founder & COO

“The difference between great and freaking amazing is only 10% of the effort. It doesn't matter if we

are here in Lithuania - we need to push ourselves just a little bit to take things to the next level, we

need to think and act globally. Who says we're less smarter than guys from Silicon Valley?

Everything is in our heads and we all have unlimited power, so use it wisely.”

Tomas Okmanas

Co-founder

"Starting Oberlo in Lithuania was one of the critical success factors. Grit, commitment, curiosity,

motivation, and pure talent of our people is what sets Lithuania apart. Bundled with advanced

communication and financial infrastructure, favourable tax and regulatory environment, low cost,

and high standard of living puts Lithuania in position to become The Place for starting a tech

business.”

“Lithuania is the new Nordics. We are small, but sound with our ambitious founders who are scaling

businesses globally. Lithuania has proved itself to be the competence hub for Fintech, Energy Tech,

Life Science and Gaming industry companies, with support of tech-friendly regulators, growing

Venture Capital community and strong experienced founders. Having seen ecosystem grow from

day 1, we can assure it is just a beginning, and Lithuania should be on the radar for every VC investor

globally.”

Rokas Peciulaitis

Managing Partner

Andrius Slimas

Co-founder & CEO



Startup & Tech Conferences in Lithuania.

Source: Dealroom.co

Page / 30

November 16-17, 2019Vilnius

• GameOn is the trailblazing video gaming event in the Baltic region.

November 27-28, 2019Vilnius

• Fintech Inn is a forum, where established companies, startups, investors, associations, policymakers and technology leaders from over 60 countries gather together to exchange knowledge and discuss the challenges facing the industry today.

April 21-22, 2020

Vilnius

• The annual Energy Tech Summit is hosting top European energy and mobility investors, entrepreneurs, and government leaders at an exclusive two days event in Vilnius, Lithuania.

May, 2020Vilnius

• Startup Fair is an annual and the main international startup ecosystem event in Lithuania. Changing business environment invites us to discuss more about sustainability, failure tolerance, and enhance knowledge in the leading technologies.

May 28-29, 2020Vilnius

• The largest two-day innovation festival in the Baltics, aka the celebration of digital culture.

August, 2020Klaipeda

• Each summer Baltic Private Equity & Venture Capital professionals gather at one of the beautiful Baltic resorts to discuss industry developments, network & enjoy various activities together.

Sep 30 – Oct 1, 2020Vilnius

• Life Sciences Baltics is the only international forum in the Baltics for world-class biotechnology, pharmaceutical and medical devices experts from all around the world.

The most complete and detailed picture of

Lithuania’s tech ecosystem, in partnership with:

www.startuplithuania.com/startup

Where Does the Data Come From?

A rapidly expanding network of European ecosystems, powered by Dealroom’s API.

The state of tech in Germany & Berlin | August 2019

Data powered and crunched by Dealroom.co

in partnership with

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