BaltCap joins java wars

RIGA - BaltCap, the leading independent private equity and venture capital firm in the Baltic States, has agreed to invest in Coffee Inn, the largest branded coffee shop chain in the Baltics, reports LETA. Coffee Inn intends to invest up to two million euros of debt and equity capital over the coming two years to finance the future growth of the business in Lithuania and other countries, the investment company BaltCap said in a statement.

Coffee Inn was established in Vilnius in 2007 by a group of Lithuanian entrepreneurs.
Today the company operates 28 branded coffee shops and expects to have sales of over three million euros in 2012.
Coffee Inn cafes are located in Vilnius, Kaunas, Klaipeda, Palanga, Siauliai and Riga, Latvia.
Vygantas Maksele, the CEO of Coffee Inn said: “We are very pleased with having attracted BaltCap as a new investor in Coffee Inn. With BaltCap’s financial and strategic backing, we are confident that the company will continue its strong growth in the coming years. The regional market for branded coffee bars is at a very exciting stage of its development and we should capitalize on this opportunity.”

“We believe that Coffee Inn has the strongest growth potential among local chains of branded coffee shops in the Baltics. We look forward to working with the competent management team of the company, which has demonstrated an impressive record over the last four years in both expanding the chain across Latvia and Lithuania and building a highly loyal customer base,” said Kornelijus Celutka, investment director at BaltCap.
Indeed, the cafe industry has been on a tear over the past several years. Spurred on by the economic crisis, entrepreneurs have found a large gap in the market, previously served by Soviet-style venues, which are being swept aside by new-to-the-Baltics concepts and creative designs.

Despite Starbucks having seemingly written off the Baltics, Coffee Inn will still face plenty of pressure in the market. Though not yet offering the equivalent of the San Francisco, Vienna or Turin cafe life, the industry has nonetheless been evolving in Riga. Stalwarts include the Double Coffee chain, Costa Coffee (which took over the Coffee Nation network), as well as relative newcomer France Express, and the popular French ex-pat-owned and ever-expanding Cadets de Gascogne, among numerous independent operations.

The Lithuania SME Fund is a growth capital fund established by BaltCap in 2010 as part of the JEREMIE initiative in Lithuania. The total size of the Lithuania SME Fund is 20 million euros, and it provides growth equity financing of up to three million euros per company for small- and medium-sized enterprises.
BaltCap has strong presence in all three Baltic countries with local offices and an experienced team. Since 1995, BaltCap has been managing several private equity and venture capital funds with total capital of over 190 million euros, and has made more than 50 investments.