Baltic Startup Funding Report update H2 2020

Our H2 2020 funding report is finally available on our website. The key conclusions from last year can be seen in the snapshot below.

The second half of 2020 saw a big drop in pre-seed funding rounds, even though total capital raised reached a record. The reduction in the number of seed deals is a combination of two effects — the larger pre-seed bridge and extension rounds in H1 2020 that were raised to survive the pandemic, and the increasing selectiveness of angel and pre-seed investors. Round sizes and valuations grew, meaning that the teams able to raise rounds did so at more attractive terms than before. However, interestingly, revenue receded as a driver of valuations, as we saw more pre-seed rounds close with zero revenue traction and the bottom quartile in monthly revenues drop for seed rounds also.

Seed and Series A deals continued to grow in round size and valuation, showing a maturing of the Baltic ecosystem, as more startups approach product-market fit and are able to raise solid rounds. Estonian seed rounds grew especially strongly, almost doubling from H1 2020 in number, as Estonia's mature angel ecosystem showed readiness to fund startups aggressively, several skipping pre-seed rounds altogether.

Thanks especially to the founders who trusted us with their confidential transaction data in order to help bring more transparency to the ecosystem (here is the link to submit your data for the next report) and, as always, to Startup Wise Guys and 70V for their collaboration in assembling the data for this report.