Change Ventures and FIRSTPICK funds announce the release of the latest issue of their semi-annual Baltic Startup Funding Report, which examines the investment landscape in the second half of 2024 across Lithuania, Latvia, and Estonia. The most comprehensive outlook of the region includes the transaction data covering over 60% (564) of pre-seed and seed rounds closed in the past six years.
“Once again, we are humbled that founders willingly share their confidential data on funding rounds with us—all for the good of the community. The most recent data shows that funding is still tough for founders to access, though the stomach ache of the post-boom pullback seems to be passing,” says Andris Berzins, Partner at Change Ventures.
The volume of funding rounds stabilized
The earliest stage of funding in the Baltic states is resilient, as the number of pre-seed rounds has finally stabilized after a decline that started in H1 2023.
While the number of seed-stage rounds has slightly decreased in H2 2024, it coincided with a shift towards more significant seed investments, suggesting a healthier pipeline of early-stage companies progressing through the funding cycle.
Series A and growth-stage activity also remained steady. The report states that growth-stage funding amount in H2 2024 hit its lowest level since 2019, citing investor caution.
AI and deep tech startups drive pre-seed rounds
The report shows that the median pre-seed round size has declined from its H1 2024 peak, now around €400K, while valuations have stabilized at €3.85M. In H2 2024, the gap between top and lower-tier startup valuations expanded significantly, returning to the levels of H1 2023, which shows a more polarized investment environment.
“While overall funding volumes have decreased, we see investors prioritizing stronger, more capital-efficient companies, especially at the seed stage. Notably, AI startups and those led by experienced, serial founders are securing larger pre-seed rounds at higher valuations, signaling investor confidence in high-potential teams and the wave of AI. The fact that pre-seed valuations remain high with the best securing capital at even higher valuations than before underscores that investors remain eager to back the most promising startups, even in a more selective market,” says Andra Bagdonaite, Partner at FIRSTPICK.
Seed-stage recovers
Based on the analysis, the median round size in the seed stage rose back to €2M in H2 2024 from €1.5M in H1, signaling the prevalence of full seed rounds rather than the bridge rounds like before. The median valuation of seed stage startups has rebounded to just below €10M, with lower-quartile valuations rising significantly. However, the gap between upper and lower quartiles widened, showing that well-established teams attract most of the capital while others face challenges.
Traction needed to raise successfully
Similarly to 2023, in 2024, many pre-seed startups raised rounds with none or hardly any revenues, i.e., top-performing startups raised with just around €10K in revenue. At the seed stage, the median revenue declined somewhat to €38.5K, while the lower and upper quartiles increased, reflecting the overall trend since 2022 towards higher traction needed at seed to raise a round.
Lithuania and Latvia catching up with Estonia
Estonia continues to lead in the number of Series A and growth rounds. However, Latvia and Lithuania have surpassed Estonia in median valuations for pre-seed rounds, with Lithuanian and Latvian startups achieving valuations ~30% higher. This shift signals an increasingly competitive early-stage landscape in the region and the potential for Lithuania and Latvia to follow Estonia’s steps in reaching the maturity of their startup ecosystems.
Full report
Anyone interested in learning more about the Baltic startup funding in H2 2024 can access the full report here: https://firstpick.vc/baltic-startup-funding-report/. The next issue of the report dedicated to H1 2025 is planned to be released in Q3 of this year.