Vilnius-based deeptech VC Iron Wolf Capital has raised more than €30m of a target €100m for its second fund. If it hits that target, it would be among the largest such funds in the region, along with the likes of Estonia and UK-based VC Plural’s €400m fund and Estonian state LP and direct investor SmartCap’s €100m vehicle to back startups and VCs, launched earlier this year.
LPs in the new fund include Lithuanian state bank ILTE, as well as more than 40 family offices and high-net-worth individuals in Europe. 90% of the firm’s LPs from its €21m first fund re-upped, Iron Wolf tells Sifted.
Founded in 2017, Iron Wolf has backed companies like Lithuanian online AI college Turing College (which was on Sifted’s list of fastest-growing consumer startups by revenue late last year) and Lithuanian legaltech startup Amberlo, which was recently acquired.
For the new fund, the team wants to shake things up: focusing more on areas like biotech, energy and spacetech, as well as AI. It typically invests between €500k-€2m for initial cheques, and plans to invest in 25 startups.
The firm is laser-focused on Baltic founders — including the diaspora, meaning the team might back founders who left the Baltics to move to the US. “I think that this US-based diaspora, particularly, is something that we are yet to tap into,” Kadi-Ingrid Lilles, a newly-promoted partner at Iron Wolf, tells Sifted.
But managing partner Kasparas Jurgelionis adds they’re keen on supporting the local ecosystem: “We are very much aware of the vibe…that the only way for a deeptech startup to grow is to raise a pre-seed round and use it to relocate to Delaware. I don’t think we buy into this,” he says.
The ‘situation is looking dire’
Iron Wolf has also promoted Lilles to partner from investor and head of platform — making her one of the very few senior women in the Estonian VC ecosystem.
“The situation is looking dire, unfortunately, and in Latvia and Lithuania, largely the female GPs that we have in the ecosystem have founded the funds that they’re partners in, and have not been promoted internally,” says Lilles. “We’re hoping that this is a positive signal.”
Biotech, photonics and dual use
Jurgelionis and Lilles are keen on deeptech in the Baltics, where certain areas like photonics — which uses light to transmit data and information — are having a moment.
“In Estonia, we’re seeing a cluster of battery and energy tech companies that are…spinning off of the Tallinn Technical University,” says Lilles. “Historically, Lithuania is very strong in photonics and laser technologies, which is spilling out into spacetech applications as well.” The integration of photonics into spacetech is “going to be a big topic for us in the next five, 10 years,” says Jurgelionis.
Lilles adds that biotech and medtech are areas that they’re increasingly seeing in the Baltics — and are of particular interest for the firm right now.
A lot of that could also be considered defence or “resilience”, Jurgelionis points out — invoking the buzzword du jour. While he says that the firm doesn’t have restrictions around investing in weapons, it’s far more interested in the technologies underpinning a drone that could carry a weapon, for example. “Lethal, I think, is still a complicated word for a lot of LPs in Europe,” he says. Lilles says the team’s “cautiously” approaching defence as a theme.
Iron Wolf is also eyeing AI — but warily. “We’re definitely still holding out for some of the more exciting developments. I think that because the space is so buzzy, we are also approaching it a little cautiously,” Lilles says. Jurgelionis says there are some interesting opportunities within AI around computer vision.
Read the orginal article: https://sifted.eu/articles/baltic-deeptech-vc-fund-100m/
