Lithuanian open data startup Okredo raises $650K in follow-up funding despite venture capital slowdown
Despite the slowdown in venture capital funding due to the global economic downturn, Lithuania-based open data tech startup Okredo announced today it has raised €650,000 ($650,000) in follow-up funding to expand into the UK and other markets, and the development of an Open Banking solution.
The investment, which is a continuation of its 2021 round, was led by the Lithuanian Business Angels Fund, Czech Presto Ventures, and Lighthouse Ventures. The latest round brings the startup’s total funding raised to €1 million.
According to recent data, venture capitalists have decreased their annual investment in early-stage deals by 22%. Venture capital and angel investor funding for various firms have declined since at least 2010. Despite the sector hitting a troubling time, a total of $1.7bn was raised by 34 companies this week.
Founded in 2015 by co-founder and CEO Gerda Jurkonienė, Vilnius-based Okredo is an open data platform that provides credit scores, financial ratios, and insights into both freemium and premium accounts, helping companies accelerate growth and mitigate risks. The startup also sets a new standard in the data industry by joining open data, open banking, and credit bureau functionalities.
Since its establishment seven years ago, Okredo has become a trusted SaaS platform that enables SMEs to assess the credibility, stability, and sales potential of prospective and ongoing business partners and clients.
Okredo’s success in securing funds is an exception in the current state of the startup market. A recent report revealed that the value of venture investments has ticked lower in most months since November 2021, before dropping another USD 5 billion from March to April 2022. The investments into scalable and practical solutions seem to be holding investor interests.
Okredo is one of the tech startup companies that has shown steady growth by delivering a solution to a broad issue — access to data. More specifically, an issue that SMEs are now experiencing — most countries’ data is fragmented across several sources, requires numerous integrations, takes a long time to acquire, and is challenging to comprehend. This data could be utilized for both sales and credit risk management. Consequently, there is a need in the market for a product that allows data to be easily understood and aid businesses in resolving these issues — and Okredo plans to offer such practical solutions.
In a statement, Jurkonienė said, ”The decision of some venture capital funds to continue investments is a sign of the company’s efficiency and ability to deliver results. The general proliferation of the data market — with its ability to increase the overall speed of business — has also helped attract further investments. The data industry, which has even been dubbed by some as the ‘new oil’, is an attractive field for investors.”
She added, “Most importantly, our platform offers a variety of tools that make it simpler to assess businesses’ risks and sales potential. These tools are highly valuable due to the current economic instability, brittle logistical chains, ongoing geopolitical tensions, and the reorientation of international commerce. However, European companies currently lack a widely-accessible open data platform to analyze such factors, which is exactly what we want to change. To help tackle this situation, we have also created a number of API solutions for our partners who create ERP, CRM, and accounting systems, adding the value of current data to their services.”
The burgeoning of the data industry is a result of the 2019 EU Directive on Open Data and the Re-use of Public Sector Information, which urges EU countries to make publicly financed and public sector data as accessible as possible to enable information re-use, which can result in financial gains.
This data market development especially impacts SMEs, which are often exposed to greater risks as they have insufficient knowledge and resources to collect and interpret data and no funds for expensive credit risk management solutions such as credit bureaus or credit insurance.
Having successfully launched in the Baltic States, Okredo now plans to take advantage of the EU directive and expand into new markets. The platform was introduced in all three Baltic nations last year and currently has over 17,000 users and more than 3,000 corporate clients.
Roman Nováček, partner at Presto Ventures: “Having invested in Okredo a few months ago, we had the opportunity to observe the company’s operations from the inside, to get to know the processes and the team. Our investment has exceeded our expectations and we still see potential in further developing their product and adding new features to broaden the market potential. We want to play a more active role in Okredo’s expansion to other countries. We have no doubt that a single European platform for corporate data can make doing business across Europe more secure, especially for small businesses that were traditionally priced out of the market. They will definitely appreciate it in these uncertain economic conditions”
In addition to the planned expansion to the UK and other markets, Okredo is developing an open banking solution for its users. More specifically, the company wants to tackle the critical element in a company’s risk assessment — the financial status based on annual reports that become obsolete even before the official declaration.
The solution, with the company’s consent, will categorize cash flow and other financial parameters and enable the sharing of its financial performance with relevant stakeholders throughout the year. Businesses will be able to make financial decisions quicker by engaging business partners, investors, or lending institutions with access to up-to-date data. Even if the financial performance is weakened, the company will be able to address issues sooner, initiate credit amendment actions, etc. In turn, up-to-date data would provide a more thorough basis for business assessment, allowing to improve the structure of internal operations and accelerate business processes.