Baltic Startup Funding Report

September 2023 update (rounds through H1 2023)


The Baltic Startup Funding Report by Change Ventures and FIRSTPICK is a semi-annual publication of detailed data about funding rounds for startups in the Baltics, including companies with HQs elsewhere but with a dominant base in Estonia, Latvia, or Lithuania.

To assemble this report, the FIRSTPICK and Change Ventures teams have tracked all the venture funding round news in the region and reached out to founders to gather, in confidence, valuation and other investment terms for pre-seed and seed rounds. As a result, we have transaction data for more than 60% (290) of the pre-seed and seed rounds closed during the past 36 months, so now founders and investors can understand where they stand relative to market transactions.

We are grateful and honored to be trusted by founders with this sensitive data.

Highlights & conclusions

In terms of startups per capita, Estonia is already far ahead of Europe and Israel and the Baltic states together are almost at parity with Europe's best both in terms of startups and unicorns per capita.

Sources: State of European Tech 2021 &, Delloitte.

The number of series A and growth rounds has continued to decrease in the first half of 2023; however, the number of pre-seed rounds has risen significantly showing continued angel and pre-seed fund willingness to back new teams. Seed rounds are also starting to rise again.

Total number of rounds by stage

While median pre-seed round valuations remained fairly stable with a slight decrease in the first half of 2023, median seed valuations jumped to almost €12M as fewer early seed rounds were closed and the market rewarded solid metrics of later seed stage teams with pre-A valuations.

Median pre-money valuation for pre-seed/seed rounds


The Baltic states punch way above their weight, generating startups per million inhabitants across the Baltics on par with the UK and the Nordics, in Estonia exceeding all of Europe and even the “startup nation”, Israel. In terms of unicorns per million inhabitants, the Baltic states are also catching up fast.


Total capital deployed in the Baltic states continues to drop as the global market for Series A and growth funding has slowed to almost a standstill. The venture capital industry is still digesting the overhang from the excesses of past years and, despite all the talk of dry powder, additional growth capital is very difficult to raise. However, pre-seed and seed capital continues to be deployed steadily.


Further, the number of pre-seed rounds has risen from 40 in H2 2022 to 58 during H1 2023, showing continued angel and pre-seed fund willingness to back new teams. Seed rounds are also starting to rise versus the prior 12 months of stagnation or decline. It is likely that our report also undercounts the actual total of rounds as we are likely not to know about some but not all the bridge and extension rounds that take place across the industry.


Round sizes across pre-seed and seed are relatively steady, hovering around €300k for pre-seed and €1.75M for seed during the past 18 months.


Median valuations for pre-seed rounds have held relatively steady during the past 18 months, but the disparity between upper and lower quartiles grew significantly during the past half year, showing investors willing to pay top dollar for few startups. Seed valuation disparity also grew massively and the median valuation jumped to almost €12M as fewer early seed rounds were closed and the market rewarded solid metrics of later seed stage teams with pre-A valuations.


The use of convertible notes for pre-seed rounds jumped to 71% versus only 40% in 2022. Otherwise, round mechanics seem to have been unaffected by the market turmoil.


In terms of revenue required to raise a round, limited data indicates that further bifurcation is happening in the market. At pre-seed, the median monthly revenues at the time of raising are zero, while for seed rounds it has jumped to €50k (albeit with limited data). This aligns with our observation that only startups with strong seed stage traction have been able to raise funding

The Baltic states are a 🦄 unicorn factory

Veriff was recently crowned the latest unicorn from the region, adding to the list of success the region has experienced to date, including both bootstrapped and venture-funded unicorns.

The global investment slow-down continues, shaping the new normal. While series A & growth rounds have come to almost a standstill, the activity in pre-seed is picking up

The funding market downturn that was observed in H2 2022 continued to have an impact on startups being able to attract funding in H1 2023. The number of series A and growth rounds has decreased even more and reached pre-pandemic levels. On the contrary, the number of pre-seed and seed rounds in H1 2023 has increased, leading to a return to growth in the number of rounds closed.

We know that bridge and extension rounds have proliferated, many of which are undisclosed, so the actual number of pre-seed and seed rounds is, we believe, somewhat undercounted as we are aware of many, but not all, of these.

Total capital raised by stage

With series A and growth rounds being at a standstill - the total capital raised by startups at these stages has decreased significantly. The series A startups have raised €38.5M and growth startups €75.5M, both more than two times less than in H2 2022. At the same time, pre-seed stage startups have increased the total capital raised from €16.5 in H2 2022 to €22.7M in H1 2023. Total capital raised by seed stage startups remains almost the same - in H1 2023 they have raised €52.1M, just €2M less than in H2 2022.

Pre-seed and seed round sizes have become more stable over the last 18 months. Only the best seed stage startups are able to raise additional funding.

Compared to H2 2022, the pre-seed round size (excluding accelerator investments under €55k) in H1 2023 has increased, and for the last 18 months has been hovering around €300k. Both the top quartile and the lower quartile have decreased somewhat, likely reflecting a more cautious attitude from investors in terms of capital deployed at the pre-seed stage.

Median pre-seed rounds increase slightly while the top and lower quartiles decrease

The opposite can be observed with the seed rounds - with the top quartile increasing and the lower quartile decreasing - the data suggests that the size of seed rounds is increasing in variability. The median round size in H1 2023 has decreased, dropping back to €1.5M. The increase in size variability is a consequence of startups struggling to secure additional funding and the increasing prevalence of late seed or pre-A rounds.

Seed rounds taking a step back and increasing in variability

The disparity in valuations has grown for both pre-seed and seed stage startups. Late seed rounds are dominating the seed funding market.

The past 6 months have reversed the trend of steadily rising median pre-seed valuations after 36 months of steady rises, now decreased to €3.55M from the peak of €4M in H2 2022. At the same time the disparity in valuations has grown, reflecting the increasing difference between the most sought-after startup teams that can raise at higher valuations (top quartile now at €6.26M) and those that cannot command such pricing.

Median pre-seed valuations decreasing slightly

Similar to pre-seed rounds, the valuation disparity has grown for seed rounds as well, reverting to the previous broad range from H1 2022. The median valuation jumped to €11.75M in H1 2023. Fewer early seed rounds were closed, with more late seed rounds dominating the market. Teams that were able to present solid metrics were rewarded by the market with pre-A-level valuations.

Seed valuations at an all time high

Monthly revenues at the pre-seed stage continue to have less impact on startups being able to raise. On the other hand, seed stage startups are using these metrics as a tool for securing additional funding.

Although at the moment we have data only on the first half of the year for 2023, a change in median monthly revenue metrics can already be observed. Compared to the previous years, data from H1 2023 indicates that the majority of startups raising pre-seed rounds do not have any existing revenues; however, the increase in the top quartile shows that some startups are able to achieve higher revenue metrics even at an early stage.

Pre-seed rounds

The data from H1 2023 indicates that the median monthly revenues at the time of raising for seed rounds have increased from €12.5k to €50k, which aligns with our observations that currently only startups with strong seed stage traction have been able to raise funding. Furthermore, these findings are indicative of seed moving to late seed.

Seed rounds

Convertible notes stage a comeback

Change Ventures has also gathered details of the legal investment form and funding round mechanics for many of the region’s pre-seed and seed rounds closed during the past 4.5 years.

The Baltic funding market round structure and mechanics have been shaken up after years of following a steady pattern. Previously 60% of pre-seed rounds and over 70% of seed rounds were being closed via equity. Now in H1 2023, only 27.5% of pre-seed and 41% of seed rounds are closed via equity, and convertible notes have become the most common investment type. Founders want to quickly and easily add funding, leading to less equity round efforts.

Over the years more investors have become comfortable investing directly in Baltic equity entities, especially driven by the fact that the Baltic states have the most advanced e-signature and digital governance infrastructures in the world. This is also reflected in the data that shows 60-80% of pre-seed and seed rounds closed in the Baltic jurisdictions.

Uncapped convertible notes are hardly seen in the region, even during the heady market of 2021. Valuation caps on pre-seed round convertible notes have, however, risen sharply from €1.2M in 2019 to over €3.5M in 2022 and have remained at that level in H1 2023 as well, reflecting the general rise in pre-seed valuations. Mean discount percentages on those notes have hovered in the 15-20% range, with median discount consistently at 20%.

Percent of rounds closed via equity investment (vs. convertible notes)

Valuation caps are stable

Number of rounds by jurisdiction (Pre-seed & seed)

Estonia still solid leader in number of funding rounds across the Baltics

Estonia’s leadership of early stage investing a few years ago has translated into a solid lead at later stages as the first scale-ups have generated multiple generations of new startup teams that raise large funding rounds. Skype has already spawned four generations of founders, with Veriff now spawning startup teams as it has scaled following the unicorn round in 2021. While Estonia has double or less the number of pre-seed and seed rounds versus their neighbours, they dwarf the region in terms of Series A and growth rounds. However, during the coming years we should see Latvia and Lithuania catching up as their pre-seed and seed rounds start to approach Estonian levels.

While many would expect Estonian valuations to be priced significantly higher, due to more competition from investors, the difference is not significant. Baltic valuations are relatively consistent across the region, with the biggest difference being pre-seed rounds that are slightly higher priced in Estonia.

Pre-seed and seed rounds by country
Median pre-seed valuation by country w/o accelerators
Series A and growth rounds, by country
Median seed valuation by country

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