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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% (564) of the pre-seed and seed rounds closed during the past 6 years, 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.
Nord Security is 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.
After decreasing for two consecutive 6-month periods, the number of pre-seed rounds has stabilized and around 35 rounds per half year. All other funding rounds have remained at the same level or decreased slightly. Interestingly, the drop in the number of rounds is mostly in Estonia, whereas Lithuania and Latvia are stable. At the seed stage - although the total number of rounds closed has decreased, we are observing fewer bridge rounds and more “proper” seed rounds. While the number of growth-stage rounds remains around the same level as in H1 2024, the majority of these rounds have been smaller in size, reflecting the increasing requirement to demonstrate a capital-efficient plan for growth.
While we observe a decline in the overall number of such rounds, bridge and extension rounds remain prevalent—many of which go undisclosed. As a result, we believe the actual count of pre-seed and seed rounds is somewhat underestimated, as we are aware of many undisclosed rounds, but not all of them.
During the second half of 2024, pre-seed, seed, and Series A investment continued to stagnate or decline. Pre-seed capital remained largely flat over the past 18 months, with a slight dip compared to H1 2024—likely driven by an increase in angel rounds, which tend to be smaller in size. Seed funding, however, saw a steeper decline, falling nearly 40% from H2 2023 levels, marking a continued downtrend at this stage. While the total amount of seed funding secured slightly decreased from H1 2024, the number of deals declined more. Hence, the companies that did manage to secure seed funding raised larger rounds on average.
In contrast, Series A funding deployed was very similar to H1 2024. Collectively, the three early-stage round stages raised €108M—slightly down from prior periods, but still broadly stagnant.
Growth funding, on the other hand, experienced a sharp contraction, recording its lowest half-year total since 2019 at €49.5M. The absence of significant, large rounds contributed to this decline, signaling continued caution in later-stage investments.
The tendency of larger pre-seed rounds continued throughout 2024, though the median round size has decreased from an all-time high of close to €500k in H1 2024 to €400k in H2. The trend of larger pre-seed rounds continues to be driven by select AI and deep tech startups are either highly competitive deals to back serial founders or simply require more capital to get started.
Seed stage funding in H2 2024 saw a meaningful recovery in the median round size, climbing to €2M from €1.5M in H1 2024. This rebound points to a continued focus on supporting high-potential startups, even as total seed funding remains subdued. The disparity between the upper and lower quartiles persists, reflecting a market divided between well-established teams, often led by experienced founders, and others struggling to secure investment. This trend highlights investor caution, with a preference for backing fewer but stronger opportunities amid ongoing market uncertainties.
In H2 2024, the median pre-seed valuation was stable at just under €4M pre-money. While lower quartile valuations did not move significantly, the upper quartile saw a further jump again this past 6 months, reflecting increased investor willingness to back the hottest startups at even higher valuations. This dynamic points to cautious optimism among investors, with a particular focus on selective, high-potential opportunities which may attract strong competition between investors.
In H2 2024, the median seed valuation jumped back to almost the same level as a year back in H2 2023, now hovering right below €10M. While the disparity between the lower and upper quartile has increased - so has the lower quartile - from €5M in H1 2024 to €8.5M in H2 - indicating that the startups that are able to secure seed funding are thriving and can command higher valuations. Given that there was a drop in seed rounds closed, it seems clear that only the best teams are able to raise at all, but there is demand from investors to back these companies at ever more attractive terms.
While in H1 2024 the majority of pre-seed rounds were secured before the startup began earning revenues, the additional data from H2 2024 has changed this and for 2024 as a whole the median revenue at the time of closing a deal was above zero, while still remaining very low. Compared to 2023, the disparity between the lower and upper quartile has decreased with even the highest-performing startups achieving lower revenue at the time of closing a round. More data would be needed, but we surmise that the ease of generating the first small revenues by a new crop of AI startups might be offering opportunities to raise more preseed rounds with at least initial traction.
In 2024, the median revenue at the time of closing a seed round declined to €38,500, suggesting an easing of focus on revenue traction compared to 2023. However, both the lower and upper quartiles increased, indicating that the minimum bar is higher (less seed rounds took place overall) and that some teams had to wait for more traction maturity before securing a seed round.
We have 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 6 years.
In 2023, the Baltic funding market experienced a significant shift in its round structure and investment mechanics, deviating from the steady historical pattern. The proportion of rounds closed via equity investment saw a notable decline. For pre-seed rounds, this trend continues also in 2024 with 44% being closed via equity. Therefore, convertible notes still remain the dominant investment type at least for pre-seed rounds, reflecting founders' preference for quicker and simpler funding methods, minimizing equity round efforts, and also utilizing the option to kick the valuation question down the road to the next equity round.
Seed rounds, on the other hand, bounced back to mostly equity rounds, most likely as the number of bridge rounds dropped in favor of more full, proper seed rounds.
Investors remain fairly comfortable investing directly in Baltic equity entities due to the advanced digital governance and e-signature infrastructures in the Baltic states.
Uncapped convertible notes remained uncommon in the region. Valuation caps on pre-seed convertible notes have been hovering at around €3M for the last 3 years after rising sharply in 2021. In 2024 the median valuation cap for pre-seed has risen further to €4M. The mean discount percentages on these notes have stayed within the 15-18% range for the last 5 years but have dropped to a historic low of 13% in 2024, perhaps as competition has risen.
The collected data suggests that Estonia remains a market leader in the number of Series A and growth rounds closed, with these deals increasing in 2024—highlighting the maturity of Estonia’s startup ecosystem. However, when it comes to pre-seed and seed rounds, the gap between Estonia and Lithuania especially is narrowing. In 2024, Estonian startups closed 46 pre-seed and seed deals, while Lithuanian startups closed 45.
According to the collected deal terms - there is a noticeable shift as Estonian funding round valuations have dropped both at pre-seed and seed. At pre-seed, the drop in Estonia was matched by a rise in Lithuanian and Latvian startup valuations to ~30% higher valuations than their Estonian counterparts. This could be explained by the high number of AI startups, especially in Lithuania, with serial founders behind them raising rounds at particularly high valuations. Seed round valuations dropped sharply in Estonia too, to below those in Latvia and Lithuania.
As Latvia and Lithuania's early-stage activities grow, we can anticipate a more competitive landscape in the coming years, potentially leading to more significant advances in later funding stages, and emulating Estonia's development pattern.
Change Ventures and FIRSTPICK will continue to gather confidential data about the funding rounds taking place in the Baltic States, releasing a report every half year or year. We appreciate founders’ trust placed in us to keep valuation and other data confidential.
Change Ventures and FIRSTPICK Baltic Startup Funding data set (H1 2019 - H2 2024):
1093 funding rounds registered
“Baltic startup” is defined as a company with a highly scalable product-oriented business model (or the potential to become one) that has at least one Baltic founder (or firmly established immigrant) and active operations in one of the Baltic States.
Valuation data based on confidential information shared with Change Ventures and FIRSTPICK by founders for 564 pre-seed and seed funding rounds, or 60% of all the rounds at that stage during the last 6 years.
Baltic founders, want this report to get better next time? Then please share your detailed round data with us at info@changeventures.com. We promise to keep it confidential.
