The global startup funding landscape continues to recalibrate in the wake of the 2021/2022 boom, and the Baltic region is navigating these changes with mixed results. The latest data reveals a decline in both the number of funding rounds and total capital deployed in the first half of 2024, continuing a downward trend from the previous year.

FIRSTPICK together with Change Ventures, both  early-stage venture capital funds, have published another iteration of their semi-annual report that overviews the Baltic region’s investment landscape for the first half of 2024. AIN shares the key figures of the report, the full version of which is available by following the link.

Decline in Funding Rounds and Capital Deployment

  • In the first half of 2024, the number of pre-seed rounds continued to decrease for the second 6 month period in a row, reaching 32 pre-seed rounds — the lowest number recorded in the report.

  • Total capital deployed also fell to €349 million as the number of growth rounds was smaller than in 2H 2023.

  • The lack of Series A capital available meant that while seed round numbers were flat, they mostly consisted of bridge rounds.The median round size for seed round declined from about €2 million to €1.5 million, with valuations continuing to fall for the second consecutive period.

Graph: Baltic Startup Funding H1 2024 report

  • Between pre-seed, seed, and Seria A stages, the total capital raised has stayed flat at around €115 million for this period.

  • Furthermore, the median seed round valuation has nearly halved over the past year, dropping from approximately €12 million to below €7 million.

  • Notably, only 10 Series A rounds closed in the last 12 months, compared to 25 during the same period two years ago.

Shift in Pre-Seed Funding Dynamics

While overall funding activity slowed, pre-seed capital is increasingly being concentrated on the most promising opportunities, like AI.

  • The median pre-seed round size nearly doubled from H2 2023 to H1 2024, reaching approximately €500,000, with significant increases in both upper and lower quartiles.

Graph: Baltic Startup Funding H1 2024 report

  • Valuations have jumped correspondingly, driven in large part by AI startups attracting favorable terms at early stages.

  • The majority of pre-seed rounds are now pre-revenue. Seed rounds are experiencing monthly revenue convergence with increased minimum revenue expectations.

The first half of 2024 reflects ongoing challenges in the global startup ecosystem, with the Baltic region experiencing its share of pressures. However, as stated in the report, the resilience of Baltic startups is evident in the concentration of pre-seed capital towards high-potential opportunities and the continued focus on quality over quantity in funding rounds. As the region adapts to these shifts, the coming years will likely see increased competition and further advances in later-stage funding.