As we enter the New Year and start looking ahead towards 2021 and beyond, EBAN is looking to expand more than ever, welcoming new members to our community. Baltic Technology Ventures, a recent addition to our network, is a platform connecting innovation with expertise and experience, giving wings to scalable and ambitious Baltic Tech innovations to build international and sustainable business unicorns. EBAN caught up with BTV’s CEO Mr. Gene Zolotarev to discuss the various aspects of their mission as the only exchange traded VC investor in the Baltic region, and how their uniqueness is an asset in the eyes of investors and companies alike.
What kinds of companies do you invest in, and what are some of your portfolio companies today?
BTV invests in scalable technology companies across the Baltics, focusing on seed and early-stage investment. Our investment thesis is to back companies in the post-revenue, pre-series A stage, which places us on the optimal part of the curve with high upside and limited downside. Typically, companies may have already gone through an accelerator or received third-party investment, and they have proven their product-market fit. Currently, BTV has a portfolio of seven tech companies, all of which have an excellent growth potential both regionally and beyond, fueled by a strong management team.
You have chosen the Baltic states as your geographic focus. What are the most exciting opportunities in the region?
In the past few years, the Baltic states have emerged as an innovative powerhouse in Europe and continue to display tremendous progress every year. The region has produced more unicorns per capita than anyone else. There are a multitude of exciting tech start-ups/companies which create value in the fields of software, technology, energy, biotech, data security, media, and communications. It is with the abundance of tech talent, state support and low cost of doing business that the Baltics offer one of the best risk-reward value propositions for investors and startups.
BTV launched in the midst of the coronavirus outbreak which hit the VC investment landscape. How did it affect your deal flow and what does BTV’s current growth look like?
If one asset class benefitted from this outbreak, it is technology. VC tends to be tech-biased. As a result, we’ve seen a lot of positive developments in the VC world, new records being set in funding, valuations of startups are ever-increasing. The investment universe has realized that VC is an asset class that is going to go from strength to strength. Moreover, our unique positioning in the ecosystem allowed us to close multiple deals in few months and our deal flow is continuing to increase. One of the great indicators of our rapid development is BTV’s stock price which went up by 1800% during the pandemic. We believe we’re just at the beginning of our growth cycle.
What value do you bring to your portfolio companies, other than capital?
BTV portfolio companies benefit in many ways, besides funding. They have direct access to our investors and their networks. We also leverage our expertise and network to help companies increase sales globally, gain access to industry professionals and attract third-party investment. Just recently, we introduced a portfolio company to one of the top motorcycle racers in the world who will help with product development and marketing. The value of such partnerships is immense. Our hands-on approach aims to generate tangible results and help our companies scale in the most efficient way in the shortest time frame.
BTV is the only exchange traded VC investor in the region. What does it mean for investors and how does it differ from the traditional VC model?
BTV is harnessing a new model, in which the barrier to entry to venture capital has been lowered, first by crowdfunding VC firms, by revenue-based investors, and even by private equity firms that have started to go upstream. BTV investors can access the full economic upside of our portfolio companies with no management or success fees, no lockup and no investment minimum. On the other hand, traditional VC investing usually ties up investors’ capital for 7-12 years and is subject to various fees and carried interest while getting access to the same deal flow. BTV’s shareholders get exposure to all of our portfolio companies, and the ability to co-invest with us in our pipeline of fully vetted tech start-ups. Anyone around the world can buy BTV shares through Nasdaq Baltic Exchange members/brokers.
Why is being exchange-traded attractive to your limited partners?
Investors can get involved with BTV by either purchasing its shares or through co-investment opportunities in specific portfolio companies. In the first way, we offer secure and transparent investing – financials are fully audited, there is regulatory oversight under Nasdaq. With BTV, investors can get exposure to the entire BTV portfolio and benefit from our companies’ growing valuations, without the long lockup seen in traditional VC funds. In the case of the latter, we welcome investors interested in any of our portfolio companies to contact us and BTV will facilitate their participation in funding rounds.
Tell us more about the SPO. Why is it a good opportunity for investors to join right now?
This is an early stage of our corporate development and looking at other exchange listed peer group investors, we see a huge upside. The Baltic startup ecosystem is rapidly evolving and SPO presents a great opportunity for investors to get exposure to VC in a more flexible way.
What’s in the cards for BTV in 2021 after the completion of the SPO?
We will use new share capital to invest and develop more exciting companies that meet our investment criteria. We have presently 15 startups in the pipeline with great potential where BTV can contribute a great deal of value through our network and contacts.
Interested? Find out more about Baltic Tech Ventures here: https://www.baltictechventures.com/