lithuanian private equity and venture capital landscape &...
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Lithuanian Private Equity and Venture Capital Market
Market Overview: 2016
LT VCA represents virtually every major player of the private equity and
venture capital industry in Lithuania and is dedicated to promoting the
private equity and venture capital industry for the benefit of funds, entrepre-
neurs, private equity and venture capital professionals and the economy as a
whole.
VC/PE market players in Lithuania create jobs, increases economic growth,
set the standards for more transparent business environment & creates
liquidity!
*****JEREMIE (Joint European Resources for Micro to Medium Enterprises) is a joint initiative launched by the European Commission (DG Regional Policy) and the European Investment Bank group to improve access to finance for SMEs in the EU within the Structural Funds framework for the period 2007-2013. Hence, private equity and venture capital funds which carry out the activities under the JEREMIE initiative in Lithuania is financed from the EU Structural Funds under 2007-2013 Economic Growth Operational Programme of Lithuania.
Lithuanian private equity and venture capital landscape & BIF
70,0M EUR****
70,0M EUR****
40,0M EUR****
Early Late Early Late Early Late
Seed Start-up Growth Buyout*
Stage of VC / PE Investment
Fund managers
**End of Investment period*Turnaround, Maturity, MBO, LBO, Sale, etc.
***Note: the amounts indicated are targeted and can di�er in the final process****Including private investor monies attracted
Lithuania SME Fund
LitCapital I (2016 01 01)**25,0M EUR****
20,0M EUR****
Start-up funding
Private Equity funds
VC funds
Start-up funding & VC funds
8,0M EUR**** Practica Seed Capital (2016 12 31)**
(not a Jeremie fund)
Karma Ventures Fund
Livonia Partners Fund
BPM Mezzanine Fund
VC I15,6M EUR
17,4M EUR
13,8M EUR
14,8M EUR
11,6M EUR Co-Investment Fund I
11,0M EUR Business Angels Fund
***
VC II ***
Seed Fund ***
***
***
Seed and VC Fund ***
Fund size 58,5M EUR
JEREMIE***** Holding Fund
Fund size 130,0M EUR
BIF Fund-of-Fund
Fund size 84,2M EUR
New VC/PE Instruments in the Pipeline
Business Angels Fund I (2015 12 31)**8,4M EUR****
Practica Venture Capital (2016 12 31)**
EUR 188,0M of private investor monies attracted to date (May 2016)EUR 188,0M of private investor monies attracted to date (May 2016)EUR 188,0M of private investor monies attracted to date (May 2016)EUR 188,0M of private investor monies attracted to date (May 2016)EUR 188,0M of private investor monies attracted to date (May 2016)EUR 188,0M of private investor monies attracted to date (May 2016)EUR 188,0M of private investor monies attracted to date (May 2016)EUR 188,0M of private investor monies attracted to date (May 2016)EUR 103,2M from pension fundsEUR 103,2M from pension fundsEUR 103,2M from pension fundsEUR 103,2M from pension fundsEUR 103,2M from pension fundsEUR 57,9M invested in companies to date (May 2016)EUR 57,9M invested in companies to date (May 2016)EUR 57,9M invested in companies to date (May 2016)EUR 57,9M invested in companies to date (May 2016)EUR 57,9M invested in companies to date (May 2016)EUR 57,9M invested in companies to date (May 2016)EUR 57,9M invested in companies to date (May 2016)
15,7M EUR****
81,5M EUR**** BaltCap PEF II
Fundraising
VC/PE funds performance of Jeremie Holding Fund
Fundraising of VCA members, EUR M Cumulative fundraising Capital attracted GPs commitment
47,7
0,41 0,70
22,86
1,906,95
1,400,03 0,86 0,14 0,10
48,1 48,8
72,5 74,681,6 83,0
2010 2011 2012 2013 2014 2015
Lithuanian VC fundraising activity commenced in 2010, fuelled by EU structural funds and steered by EIF.
The funds have completed general fundraising rounds, with most capital raised in 2010 and 2012.
VCA member funds includedin this report and main year
BaltCapLitCapitalBusiness Angels Fund I Practica Capital
(2010)(2010)(2010)(2012)Investment
Funds invested, EUR M Cumulative investment Capital invested
0,20
6,39 8,55 9,89
14,68
9,36
0,20
6,59
15,12
25,01
39,69
49,05
2010 2011 2012 2013 2014 2015
34M EUR (40%) is still to be invested, subject to funds allocated to cover operational expenses
As funds are nearing the end of their investment cycles, investment activity is declining, after reaching peak of 14.7M EUR in 2014.
Accounts for almost 60% of total committed capital.
Investment
1,7
38
57%(27,6)
Value of investments (EUR m and % of total) # Of investment Average investment (EUR M)
0,2
0,2
0,6
17
7
19
12%(5,8)
28%(13,3)
3%
Seed Start-up Growth Turnaround
The average investment value for all stages is at 0.9M EUR. Lithuanian funds are limiting their maximum investment into one company at 3M EUR, as is imperative by structural funding requirements by EU.
Lithuanian funds are allocating most of its funds into companies that already have an estab-lished revenue and client bases. Investments in seed stage companies are frequent, yet significantly smaller (average invest-ment of 0.2M EUR).
High number of investments into seed stage companies can be explained by the recent boom in start-up culture in Lithuania.
(1,3)
14 14 718 1280 1543 2790
12
3
4
5
67
891011
12
0,90,4
0,8
0,2
0,8
0,5
0,30,30,40,30,01
3,0
As firms continue to pay taxes, government investment in 2010-2012 is fully repaid in 5 to 7 years
Investment
Industrial and business products1
Consumer goods and retail2
Consumer services3
Communication4
Energy and environment5
Business and industrial services6
Computer and consumer electronics7
Financial services8
Transportation9
Chemicals and materials10
Construction11
Other12
investments(EUR M, 2010-2015)
Industry investments(# of companies, 2010-2015)
11,3
7,2
6,7
6,1
5,1
4,2
3,5
1,2
0,4
0,3
0,013,0
12
17
8
30
6
8
13
4
1
1
11
Average investment (EUR M)
(EUR M)(EUR M)
(EUR M)
Capital invested by county
2,26,2
26,43,8
3,7
1,5
1,9
Panevėžys
VilniusKaunas
Tauragė
Marijampolė
Alytus
Performance indicators of portfolio companies
(EUR M, 2010-2015)
Taxes Turnover R&D investments Employees
0,3 0,10,0
18,9
0,13,6
35,1
1,25,0
36,5
4,27,2
52,4
0,5
12,0
38,5
7,37,6
2010 2011 2012 2013 20152014
Of investments are made into innovative
industries with high added value return in the future.
50%Investment is directly paid back in taxes, indirectly - in R&D, which are expect-ed to grow significantly
Employees in portfolio companies
1300
26New jobs created bythe governmentinvesting EUR 1M
56New employees on average in a single company
38,500 11,500 0
In 5 to 7 yearIn 4 to 6 yearAt the beginning
Average new job cost for government (EUR)
Has been invested into
R&D by the portfolio companies until 2016.
13,3M EUR
Has been paid back in taxes until 2016 and is expected to grow
significantly in the coming years.
35,5M EUR
Newly created jobs in portfolio
companies stimulated by the
investment
1 3
46
2
5
Selected success stories of Lithuanian firms backed by local and foreign VC and PE funds & investors
Phone: +370 525 46713Mail: [email protected]: +370 525 46978
Case Investment Business case Investment (EUR M) Invested byInvested by
An innovative peer-to-peer market-place to trade clothing
Start-up56
A last-minute mobile event booking mobile application
Start-up33,3
+ 13 other
CGTrader is an online 3D models marketplace
Start-up0,2 + undisclosed amount
Start-up
Route planning mobile and desktop application
Start-up6,2
Co�ee shop chainStart-up1,5
Growth
Distribution of labratory equipment and chemical consumables
Start-up1
Growth
10,7 21,3 24,0
1,5 10,6 21,2
0,2 n/a
0,4 5,8
Seed Series A Series B Series C Undisclosed
Key Highlights
This material published and prepared by solely the Lithuanian private equity and venture capital association (LT VCA) for member firms, portfolio companies andpublic who find the findings being useful. It must not be reproduced or disclosed without prior consent. Whilst every e�ort has been made, the LT VCA cannot guarantee the accuracy of the information contained herein.This publication has been prepared for general guidance on matters of interest only and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice.
VC
Lithuanian legal, tax and business areas have improved and are on par with the best international practices
Lithuania has a low cost base to establish a fund
Local pension funds are becoming more active in dedicating the part of their portfolios for investment in venture capital and private equity market in Lithuania
Market development has established a compre-hensive start-up culture in Lithuania, leading to a strong pipeline of
businesses that seek equity
financing
Creates capital liquidity in a relatively small Lithuanian market
Creates a more
transparent business
environment
Backed companies in Lithuania
create jobs & increases economic
growth
Plays a major role in
commercializ-ing the innovation
Allows companies to be more e�cient