EstVCA's member BaltCap Growth Fund (BGF) recently invested in Verkter, a Lithuanian e-commerce group selling do-it-yourself and gardening tools, accessories, and aftermarket parts, operating in 11 languages. Our DEAL TALKS had a talk with Marius Miškinis, the Associate Director of BaltCap Growth Fund to learn a bit more about the investment.
1. What makes Verkter unique?
Key pillars of the BaltCap Growth Fund (BGF) strategy are (i) backing strong Entrepreneur and/or Management team, (ii) high-growth potential, (iii) proven business model and cash-positive operations – and investment into Verkter met all these criteria. In particular, Verkter is one the fastest growing pure-online companies among specialized retailers operating from the Baltics. It operates in a big international market and has already established a strong footprint in New Nordics with new projects launched in Western Europe. The Founder and CEO Kestutis Dauksevicius
and his Team are true experts of work tools with a deep understanding of the specific needs of customers in this product category. Over the years, the company has managed to deliver impressive growth while maintaining operations lean and efficient. These all add up as a solid base for further growth, while we also believe it is a favorable time to invest in e-commerce businesses as a structural shift towards consumers purchasing/shopping online is accelerating. 2. How will BaltCap and its investment help to develop the company further?
BaltCap Growth Fund can invest in various situations (financing expansion/consolidation, MBOs, doing small/partial buyouts, etc.) and is flexible in terms of deal and ownership structure. Apart from financial resources, we always strive to add value. In this particular case, we have entered as a minority partner, so the Founder and CEO maintains decision-making power and we are backing his growth journey. Key priorities with the current financing/investment are further penetration of existing markets and investment into tech stack. As part of the BGF strategy, we always initiate positive improvements in corporate governance and other ESG matters as well. 3. Main challenges
As always with growth investments, the key challenge will be to achieve breakthrough growth by figuring multiple new growth initiatives and piloting them, while at the same time keeping the focus on the main strategy and using resources efficiently. Key advisors of the deal
For BaltCap it was SPC Legal
. For Verkter it was Confidentus
and Fort Legal