COBALT advised Practica Capital on the launch of new venture capital fund Practica Capital Venture II, which will invest in the Baltic innovation- and technology-driven ventures. Invega has committed €15m of public funds with the rest committed by Practica Capital team and a number of other local and international investors. The fund will make several investments soon after the closing. Over the next 3-12 months, Practica Capital will hold the subsequent closing of the fund targeting €40m (max €50m) in total commitments.
The new fund will focus on early stage venture capital (“VC”) investments in the Baltics (Lithuania, Latvia, Estonia) and Baltic-origin (e.g. Baltic diaspora, other Baltic connection) ventures in Europe. Selectively, it will also invest in the neighbouring EU and ventures from non-EU neighbours relocating to the Baltics. The fund will invest from €200k to €2m+ in seed, early and select growth stage ventures as cross-industrial investor focusing on backing great teams behind the innovation and technology driven businesses.
Invega will invest through the Business Financing Fund, a fund of funds managed by Invega, established by the Ministry of Economy together with the Ministry of Finance of the Republic of Lithuania and financed by the EU Funds.
„The growth and strengthening of venture capital funds are one of the main drivers of the start-up ecosystem growth. Besides funding needed for business launch and development, the young and innovative enterprises will also receive additional knowledge and investor advice necessary for their growth. We expect this investment of public funds will encourage the venture capital fund to be less conservative and make bold investments into young and innovative businesses, especially in Lithuania“, – said the Minister of Economy Virginijus Sinkevičius.
According to Silvestras Tamutis, partner at Practica Capital, this is their third fund under management with a natural evolution towards regional Baltic-focus VC investment strategy and Lithuania as one of their prime target markets.
The Baltics are Emerging Nordics with dynamic economies outgrowing the rest of Europe over the past two decades, rapidly converging with advanced economies and the Nordics. With their governments supporting innovative businesses, proactively improving business and investment environment, the region is becoming an emerging hub for technology businesses with favourable ecosystem, top quartile rankings in indexes globally (e.g. 2019 World Bank Doing Business Ranking: #14 Lithuania, #19 Latvia, #16 Estonia) and one of the centres of gravity for talents in Europe).
The COBALT team prepared and coordinated founding documents of the fund and the management company, represented Practica Capital before the Bank of Lithuania and in negotiations with investors, also dealt with other issues related to the formation of the fund. The project team was composed of COBALT Partner Elijus Burgis, Managing Associate Eva Suduiko, Senior Associate Aurelija Balčiūnė, Associate Viktorija Dusajeva.