30.12.2022 - Economy, Startups

This year, Latvian startups raised €61 million

In 2022, Latvian startups raised €61 million in investments, with Juro, Giraffe360, Aerones, Colizeum and SaltoX scoring the largest funding rounds. This year has also seen three sales – Vendon, GetaPro and Nordigen are now under new ownership.

Agnese Veckalne, Chair of the Board of the Latvian Startup Association Startin.LV and Head of Longenesis, points out in the association’s annual review that it can take four to six years for startups to achieve results. Investing in startups is a long-term affair, and you never know how it will turn out – just two or three startups in the whole sector can bring in 10 times more money than their initial investment.

“This is a relatively small industry at the moment, but it has huge potential – the numbers are starting to show it. This is the best time to put the startup sector at the top of the list of priorities,” Veckalne emphasises.

In 2021, startups contributed €43.6 million in taxes to the general state budget. Of this, €27.10 million came from six to 10-year-old businesses. Three startups account for almost half of this: Printful (€7.98 million), Mintos (€4.96 million) and Printify (€3.97 million).

Investors are becoming more prudent

As seen in other sectors, this year is split into two phases – before and after the Russian war on Ukraine. Until the war, the outlook was very rosy, but more than one startup admits that the war has affected many areas, including the investment environment. Investors have become more cautious.

Andris K. Bērziņš, Board Member of Startin.LV and partner of investment fund Change Ventures, points out that stock market prices have dropped significantly this year and the macroeconomic slowdown has been tough for many founders and investors. Investors are trying to understand how much money is reasonable to invest in these conditions, so many startup teams are tightening their belts and biding their time to avoid attracting new investments.

“However, great companies continue to attract investment, including two Latvian robotics success stories, Giraffe360 and Aerones,” stresses Bērziņš.

The amount of investment attracted this year is much lower than last year, when a record of €247 million was achieved. Although the amount of investments is not nearly as large as last year, Olga Barreto-Goncalves, Head of the Latvian Startup Association Startin.LV, remains positive: if the major investment deals of Printful, Printify and Lokalise were excluded from the 2021 statistics, the average investment deal this year exceeds last year’s. “This is a good signal,” she indicated in September.

War-related sanctions are also affecting holders of the so-called startup visa. Previously, many such temporary residence permit holders came from Russia. However, in 2022, only 30 startup founders of foreign origin received this visa. Compared to 2021, when 135 people were issued the startup visa, this is a significant decrease.

One must mention that this year saw the launch of BADideas.fund, an investor alliance that includes many startup founders and high-level employees. They are ready to invest in other startups and have already invested in at least five projects, wrote Labs of Latvia.

Year’s Top 5 biggest investments 

  • Juro, a legal technology startup, raised $23 million (€20.2 million) in a Series B investment round. The funding is intended for the development of Juro’s browser-based contract automation platform.
  • Giraffe360, a robotics startup, raised $16 million (€15.3 million) from Founders Fund, a San Francisco venture capital firm with a portfolio including Airbnb, Spotify and SpaceX. Giraffe360’s latest camera will further facilitate and improve the way homes are advertised online in the real estate industry.
  • Aerones, a robotics startup, raised $9 million (€8.6 million) in seed capital.
  • Colizeum raised $8.4 million (€7.5 million) to introduce tokenised gaming modes.
  • Salto X, a startup co-founded by Krists Avots, raised a €5.2 million seed investment to create a remote worker-friendly alternative to stock options. The startup offers companies to issue blockchain-registered tokens, replicating the economic value of stock options and simplifying their issuance to employees in different jurisdictions.

For more information: labsoflatvia.com. Author: Anda Asere. Photo: Shutterstock.

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