Latvia will receive €55.8M from the European Union to launch and manage three venture capital funds

Latvia will receive €55.8M from the European Regional Development Fund to launch and manage three venture capital funds. The first tender for funds managers has already been started. Applications are open until 31 January 2024. 

The new VCs will invest in Latvian and other European pre-seed and seed-stage startups during the next five years. Each fund will receive €18.6M, and it will have to raise €2.07M extra from private investors. The maximum investment per startup at the pre-seed stage will be €250K, and at the seed stage - up to €1.5M.

According to Ieva Jāgere, head of the financial intermediaries department at the state financial institution ALTUM, the previous VCs made pre-seed investments in 157 early-stage companies for a total investment of €7.8M. The investment period continues until June 2024. For instance, the VCs, supported by the European Regional Development Fund, invested in Latvian deep tech NACO Technologies, Riga-based biotech Alternative Plants, autonomous robotic kitchen RoboEatz, and others.

In the middle of December 2023, ALTUM plans to announce another tender to select one fund manager to invest in startups and another one - to invest in growth-stage projects. Both of them will receive €37.2M.

ALTUM is a state-owned development finance institution, which invests in venture capital funds and offers loans, credit guarantees, etc. In 2019, ALTUM supported three accelerator funds: Overkill Ventures, Buildit Latvia, and Commercialization Reactor Fund. Back then, the accelerators received  €15M  from the European Regional Development Fund and public funding, which it had to invest in startups by 2021.

European Regional Development Fund is supported by the European Union. The purpose of the Fund is to transfer money from more successful economic regions and invest it in the infrastructure and services of underdeveloped regions. European Regional Development Fund finances the Estonian governmental organization Startup Estonia, the Lithuanian venture fund Coinvest Capital. It has also provided grants to some Baltic startups, including Estonian tax and customs company Eurora, Estonian startup Crespect, which develops work management software for law firms, and others.