Vilnius-based Practica Capital, a venture capital firm dedicated to backing Baltic founders, announced the final closing of its third vintage and largest fund to date, Practica Venture Capital III, at €80M.
Practica Venture Capital III is three times larger than its predecessor. This capital aims to provide financial support for Baltic founders, making it the largest seed fund in the region and establishing Practica Capital’s role as a pan-Baltic early-stage investor.
Arvydas Bložė, partner at Practica Capital, says, “The majority of capital deployed at early-stage in Europe is domestic. We saw the clear funding gap in a maturing Baltic ecosystem.”
“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,” adds Bložė.
Investors supporting Practica Capital
Practica Venture Capital III concluded its final closing with support from the European Investment Fund (EIF), which joined as a cornerstone investor, alongside institutional investors like the European Bank for Reconstruction and Development (EBRD), SEB Investicijų Valdymas, and Investicijų ir Verslo Garantijos (INVEGA).
Swedbank Investicijų Valdymas and Swedbank Investeerimisfondid served as anchor investors.
Institutional capital constituted over 80 per cent, with more than 70 per cent coming from returning commitments. Individual LPs, including co-founders of Lithuanian unicorns Vinted and Nord Security, and backers of other successful tech companies, also contributed to the fund’s support.
EIF Chief Executive Marjut Falkstedt says, “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,” adds Falkstedt.
What to expect from the fund?
Practica Capital focuses on empowering early-stage tech startups in Lithuania, Latvia, and Estonia. The seed-stage strategy includes the capacity to invest up to €3M initially and support successful companies with up to €8M throughout the fund’s lifespan.
With over €10M already deployed, the fund has backed six companies, including Heavy Finance, Sentante, Amlyze, and Breezit, with three more companies currently in the term sheet stage.
Donatas Keras, founding partner at Practica Capital, says, “We are a local lead investor serving and evolving with the ecosystem and acting from within. 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, with over €130M in AuM, focuses on technology investments, specialising in SaaS, Marketplaces, and Deep/Industrial tech.
The firm’s portfolio includes over 60 companies featuring “emerging category leaders” such as PVcase, TransferGo, Interactio, Montonio, Ovoko, and Eneba.
Brief about the European Investment Fund
The European Investment Fund (EIF), a part of the European Investment Bank Group, aims to help Europe’s small and medium-sized enterprises (SMEs) in accessing finance.
Through the design and development of venture and growth capital, guarantees, and microfinance instruments, the EIF focuses on supporting SMEs and advancing key EU policy objectives such as competitiveness, innovation, social impact, and environmental sustainability.
EIF claims that the InvestEU programme is vital for the European Union’s long-term financing, mobilising public and private funds to support sustainable recovery. Aligned with EU priorities like the Green Deal and digital transition, it streamlines project financing through three components: InvestEU Fund, Advisory Hub, and Portal.
The InvestEU Fund, implemented by financial partners, leverages a €26.2B EU budget guarantee to spur at least €372B in additional investments.
