FinTech companies in the Baltics raised $175.3m across 45 deals last year.
- The FinTech industry in the Baltics recorded strong growth in deal activity between 2016 and 2018 as the number of transactions increased from 21 to a record high of 59. Funding peaked at just over $600m in 2017 driven by large transactions as Coinverco, a crypto investment management and trading platform, and 4finance, an online lending group, raised $120m and $325m, respectively.
- However, FinTech investment declined in 2019 with deal activity falling to 41 transaction and funding levels dropping 76.4% to $45.7m. Even if we exclude volatile over time large deals above $30m from the analysis total capital invested still declined by 51.4%.
- Despite being a small market, the countries in the region – Latvia, Lithuania and Estonia – possess a high level of technology penetration which has produced a disproportionally high number of tech hardware and software startups. As such the ecosystem showed resilience in the face of the pandemic last year with FinTech funding growing 3.8x to $175.3m. Deal activity also picked up from 41 deals in 2019 to 45 transactions in 2020.
Five of the top ten FinTech deals in the Baltics took place in Q4 2020 as economic outlook improved
- The top ten FinTech deals in the Baltics completed in 2020 collectively raised $160.8m, making up 91.7% of the overall investment in the region during the year. The high levels of concentration of capital in large deals is normal given that the average deal size in the Baltics last year was just $5.7m. Additionally, half of the ten largest deals were completed in the last quarter of 2020 as outlook improved with the approval of several vaccines.
- Estonian companies took six spots on the list with Veriff, a global identity verification service company, closing the largest deal in the country. The company raised $15.5m via a convertible note from NordicNinjaVC, Change Ventures, Mosaic and Y Combinator. Veriff will use the funding to expand sales to enterprise customers before it raises a larger Series B round in the future.
- The largest deal last year was completed by SME Finance, an online invoice finance company based in Vilnius, which collected €80m in debt financing from European Investment Bank in October 2020. The company will use the investment to meet the working capital financing needs of enterprises through its self-service factoring platform. SME Finance also stated it is planning to launch a neobank for business clients, which it intends to have operational by mid-2021.
The data for this research was taken from the FinTech Global database. More in-depth data and analytics on investments and companies across all FinTech sectors and regions around the world are available to subscribers of FinTech Global. ©2021 FinTech Global
