Beyond funding rounds

work in progress

• Tankers keep us all inspired to try harder. In a Sifted interview, Nord Security founders explain they are ready for IPO but have no plans – would do only if it makes sense. Obviously, explosive growth for years and now the biggest VPN provider globally, actively looking at more early-stage acquisitions. Another heavyweight – Vinted – in talks with TPG to buy stake at EUR 5bn (!!!) valuation.

• HR acquisitions. Apax’s Zellis to acquire Swedish employee benefits platform Benify – for EUR 300m - EUR 400m; Benify ops LT team is 47 people now. Estonian Wisnio is getting acquired by Assessio, a leading talent assessment provider in Europe.
• You've got to live (along with your startup). Milda Mitkute is interviewed by Sifted, talks how 8 years of "project Vinted" was followed by "Project Kids" (now four of them); also mentions edtech startup she is getting involved. Simona (Perfection42) is fundraising being pregnant..second time already. Eddy is relocating to San Diego (Such Much AI or smth else?). Jonas (Nord Security co-founder) takes the podium at ADAC GT Masters race – congrats!
• Edtech. EduChallenger accelerator is launched – a combined effort of xEdu, Civitta and EdTech Lithuania. Anyone new building edtech? Alfa Erdve closed a round (find below).
• Builders. Despite the slowdown in rounds, we're seeing a lot of entrepreneurs in building mode. Finally, isLucid is accelerating and needs to grow the team. Others include Ada with Hero.io, Dainius with Rubedo Circular, Ignas with Memstagram, Agmis with EasyFlow and EasyODM, Mindaugas with empatick, Carmen with Elnora AI, Tadas with GotBilled. For them and others:
  • Tesonet inviting to AI-only hackathon (Oct 4-6), ready to invest straight away.
• Cheers. Recently we've seen Akola investing in both Brite (new, 6th generation release) and OMG Bubble Tea. Cannumo drinks and tinctures are on shipment to Tech BBQ (Denmark) next week. Estonians have Yook – an oat drink brand.
• Retailtech landscape is broader than one might think. IKI launched new autonomous store powered by PIXEVIA, and also ran Startup Night by REWE digital and IKI. They have been instrumental for several startups to launch and connect in other markets – the list includes LastMile, Walk15, Inbalance Grid, PIXEVIA; there are more entrepreneurs in this space – watch Traxlo, Workofo, Envelope.
• Events. Practica Capital is throwing a Block Party next week (13th) – we are nervously reviewing their portfolio.. who got acquired or raised a gazillion? Slide into our DMs. Also for the calendar – both Sept 24 – Autumn Sales Summit (20% off with code TECHPHILOMATHS) and GovTech Leaders 2024 (Sept 24).
  
  If you're making deals (and sometimes leave money on the table), learn from the best negotiators – Derybos2024 Summit is Oct 3. There is 10% discount with code techphilomaths (until Sept 25).

rounds and capital

• Alfa erdvė (team from Alfa Klase) closed EUR 315k pre-seed round from angels (not disclosed). They are bringing AI into Math learning (so we re-read Sifted's interview with Milda from Vinted and now having ideas regarding names of these angels...)
• airvolve-aero raised EUR 815,000 from with Coinvest Capital, Baltic Sandbox Ventures, along with Rita Sakus as the lead angel. They are building heavy-lift aircraft with operating costs 10X lower than a conventional helicopter and we can't wait to see some videos.
• Inobiostar was awarded with EUR 2.3 million grant from the EIC Accelerator. Developing a waste paper-based sorbent with integrated oil-degrading microorganisms, to address aquatic oil spills.
• Cambridge Phenotyping receiving EUR 100k R&D grant for product development – Smart-Kage.
• With more EU cash: Estonian Mifundo secured EUR 2.5m grant (EIC) to build technology layer to passport credit histories across borders through one single API (makes sense, yet challenge is more institutional inertia + politics, vs technical execution; we talked that cross-border solutions are on the rise, previously). Latvian Sorsera (AI-native platform for procurement and supply chain) received EUR 1.27 m in funding (950k EU project).
• ERA Capital joined Kredete investment round – they raised $2.25M to support African immigrants in building credit score and sending money home. 
• Inovo applied AI to make a custom high-signal sourcing model, and also recently made LT investment. In the news soon.

three questions

Efi Dahan, VP, General Manager, Central and Eastern Europe & Israel, PayPal

It is fascinating to capture payment management aspects in your survey, especially when most startups are still early stages. What surprised you?

One of the biggest surprises of this year’s edition of our ‘early-Stage Startup Index’ research was to find out how challenging it was for startups to provide their customers with local payment methods. As many as 38% of young businesses selling cross-border identified access to local payment options as one of their biggest payment-related challenges. Moreover, only one in five startups pursuing foreign markets provide their international customers with local payment options. This means that approx. 80% of sellers who do not offer such methods are limiting their opportunities for growth in local markets.

Why is that? What are the key factors making it hard for sellers to provide their international customers with local payment methods?

Many factors can stop companies from offering local payment methods – lack of knowledge, poor budgetary planning and even lack of opportunity stemming from, for instance, technical incompatibility. Nonetheless, offering local payment options is a must, as it helps build not only the company’s competitiveness but also trust and credibility among the customers, who like to pay with methods they know and trust.

What is PayPal's value proposition for e-commerce startups scaling beyond home markets?

When it comes to Central & Eastern Europe PayPal’s strategy is focused on the development of our cross-border business. We work with a lot of local startups and help them to develop their operations and reach broader consumer base. By providing Baltic companies with payment tools that help them scale, we help increase their potential customer base from around 3.5 million e-commerce users in Baltics to approx. 400 million PayPal users globally. We provide startups with multiple payment options and broad range of solutions, including mobile, subscription and recurring payments and we offer them one and easy integration process for all their payment needs, including credit cards, digital wallets and local payment methods. Finally, we provide startups with technical support that makes it easy for them to set up and start accepting payments in multiple currencies quickly and smoothly.

P.S. If you want to learn more about global expansion challenges faced by early-stage startups from Central & Eastern Europe, check out the recent edition of PayPal’s ‘Early-Stage Startup Index 2024. Challenges in the Era of Cross-Border Commerce’ report.

Tech Philomaths' community - join

• Lean and Mean - small profitable Baltic tech firms

• Startup lists for the Baltics - Drone startups, Marketplaces, Sportstech
• Repeat Lithuanian founders - 40+ serial founders building now

Baltic Startup Funding H1 2024 update

The number of funding rounds has dropped again, especially for pre-seed. Several factors are driving this, including a concentration into fewer, larger rounds and the drying up of angel funding from the boom of 2021/2022. Total capital deployed also dropped to €349M in H1 2024 as fewer growth rounds were closed.

Pre-seed round sizes and valuations jumped during H1 2024, driven by a concentration on fewer opportunities and the AI funding boom. Seed stage investing moved in the opposite direction, likely a symptom of many bridge rounds and a lack of Series A capital.

founder's guide

• How to Get Meetings With People Too Busy to See You (don't just take)
• The Subscription Value Loop: A framework for growing consumer subscription businesses. And here is what allowed WHOOP to do a subscription instead of hardware / one-off transaction.
• How to write Great One-Pagers

sponsors

Meet our friends pushing the startup scene forward. Would like to see your logo here? Happy to talk more.

Cloudvisor [AWS partner dedicated to startups]
PayPal [Global integrated payments solution]
Vinted [largest C2C European marketplace, always hiring]
Tech Zity [tech hubs and campuses across Lithuania]
Presto Ventures [investing in startups at the forefront of security, defense, aerospace]
Wargaming [award-winning game developer, careers]
15MIN Group [all the news you need to know]

further insights

• Well these Portals are cool and now adding a live view of Earth from space – via partnership with Sen.

ecosystem

• AI productivity effect for programmers: 26.08% increase in completed tasks. And it is a randomized controlled trial using the older, less-powerful GPT-3.5 powered Github Copilot, for 4,867 coders in Fortune 100 firms.
  • Where is that political party wanting to deploy EUR 300m for free and subsidised AI learning? You have my vote.

roleplay