- Siena Secondary Fund II secures EUR 20M from EBRD and SmartCap, boosting regional momentum
- The fund targets growth-stage CEE and Nordic tech firms with EUR 10M+ in revenue
- SmartCap and EBRD emphasize secondaries’ role in liquidity, efficiency, and ecosystem maturity
- Siena aims to become the default liquidity partner, driving reinvestment and regional innovation
This September, Siena Secondary Fund II—the Estonia-based VC direct secondaries vehicle focused on the CEE and Nordic region—announced having received a major commitment of EUR 20M from the EBRD and SmartCap, the Estonian state-owned capital fund manager. The Fund II now comprises EUR 50M.
Targeting CEE Scale-Ups and Building Momentum
Siena Secondary Fund II is building strong momentum with backing from institutional investors and over 100 private stakeholders, including founders, early backers, and employees of leading European tech companies such as Bolt, Vinted, Pipedrive, Twilio, and Wise. Building on the success of Fund I—which invested in standout scale-ups like Bolt, Oura Ring, and Booksy—the second fund continues to attract capital across Europe and is on track to reach its target size by year-end.
Siena focuses on growth-stage technology companies in the CEE and Nordics with revenues above EUR 10M, executing direct secondary transactions by purchasing equity from early investors, founders, and employees. This approach provides liquidity to early stakeholders while ensuring long-term alignment with the company’s growth and exit strategies. The fund’s success highlights the growing role of venture direct secondaries, a maturing asset class that strengthens Europe’s most promising tech scale-ups while enabling early liquidity.
Fueling Capital Efficiency and Driving Ecosystem Maturity
Sille Pettai, Managing Partner at SmartCap
According to SmartCap’s managing partner Sille Pettai, her firm decided to invest in Siena because of the apparent tremendous potential in VC secondaries to amplify capital efficiency and fuel regional success stories. She is convinced that this asset class not only provides access to strong companies on attractive terms, but also helps accelerate the tech flywheel, enabling the launch of new startups and attracting fresh investors into the ecosystem.
‘Siena itself is an ambitious emerging manager with a clear vision of scaling to the next level: building a larger fund, adopting a more international strategy, strengthening institutional quality, and partnering with reputable co-investors such as Isomer and EBRD. Through this investment, we also have the opportunity to contribute to the development of the Estonian capital market by creating liquidity in the VC asset class. This, in turn, makes the entire asset class more attractive for all market participants and supports the long-term growth of the ecosystem,’ Ms Pettai adds.
‘Direct secondaries are becoming a key driver of maturity and sustainability in the European venture ecosystem. They provide targeted liquidity while supporting long-term value creation and governance,’ the EBRD’s head of venture funds Michael Parry agrees.
Accelerating Baltic and CEE Tech Growth Shaping the Future of the Region’s VC Secondaries
ITKeyMedia approached Siena Secondary Fund’s general partner Lauri Isotamm to find out more about the fund and its ambition within the peculiarities of the secondary market of the Baltics and CEE.
First of all, why did the founding partners of Siena Secondary Fund decide to launch a firm specializing in secondaries in the Baltic markets back in 2020? What gap or opportunity did you see in the market that prompted you to step in?
Lauri Isotamm: Our founding team brings together complementary expertise: an exited founder paired with two partners who’ve spent years collaborating in corporate finance and tech-enabled investments.
The lightbulb moment came in 2018 when we were presented with a secondary opportunity in Bolt, the Estonian ride-hailing company – likely their first secondary transaction ever. That deal opened our eyes to a clear market reality: there was a significant untapped supply of secondary opportunities and genuine demand for buyers willing to provide liquidity. While others were organizing ad-hoc syndicates, we saw the potential for something more systematic and launched the Siena Secondary Fund.
As for the name? Pure serendipity. We recycled it from an existing company name that was gathering dust after a potential Italian deal in Siena fell through. Sometimes the best stories write themselves.
How do you source your deal flow? Are you primarily relying on intermediaries, direct outreach, or unique networks?
LI: We’ve built our sourcing engine on three pillars. First, our deep network roots through different communities like founders society, angel networks, and other GPs – relationships matter in this business.
Second, we’re proactive about expanding our reach through conferences, our venture partner in Southern Europe, and targeted outreach to promising startups across the region.
Third, and perhaps most validating, we’re seeing increasing inbound flow. Word travels fast in tight-knit ecosystems, and we’ve now become the go-to call for employees, founders, early investors, and intermediaries when liquidity needs arise. It’s gratifying to see our reputation opening doors.
In the secondary market, you often deal with more mature companies as opposed to fresh startups. What are the ‘green flags’ or ‘red flags’ you look for in the leadership teams and business models of potential investments, especially when the company is already established and operational?
Lauri Isotamm, General Partner at Siena Secondary Fund
LI: Our green flags are straightforward but non-negotiable: clear product-market fit demonstrated through strong customer traction or €10+ million in annual revenue; sustained growth of at least 50% year-over-year; and Tier 1 investors already at the table. That last point is crucial – as minority, relatively passive investors, we want seasoned players driving toward exit within a 3 to 5 year horizon.
The red flags? Complex preference stacks and liquidation preferences above 1.0x are immediate concerns – they can kill economics for common shareholders. Equally problematic are management teams that won’t engage with us on information sharing. We’re not looking to be disruptive, but we do need transparency to make informed decisions.
To what extent does Siena leverage technology and data analytics in identifying and evaluating secondary investment opportunities?
LI: We’re pragmatic about this. While we absolutely leverage all available data and analytics in our evaluation process, the private markets reality is that comprehensive datasets simply don’t exist at the scale you’d find in public markets. We focus on extracting maximum insight from the information that is available, but we don’t pretend there’s some proprietary algorithm solving deal sourcing – it’s still fundamentally a relationship and judgment-driven business.
What sectors and sub-sectors do you view as having particularly high growth potential in the Baltics and CEE?
LI: We’re deliberately sector-agnostic. Great companies can emerge from any vertical, and we’d rather focus on finding exceptional businesses than trying to time sector rotations. Our investment decisions come down to the fundamentals of individual companies, their growth, market position, and path to liquidity, not broad thematic bets.
What trends are you observing in terms of liquidity events in the Baltics and CEE and how do you capitalize on them?
LI: The macro environment has fundamentally shifted how companies approach liquidity. We’re seeing businesses stay private longer, and frankly, many are doing so from a position of strength rather than necessity. Access to private capital remains robust, and staying private has become a competitive advantage for many.
This trend actually plays to our strengths. When liquidity events do occur, they’re increasingly concentrated among the highest-quality businesses. Exactly the companies we target. We’re positioned to capitalize on this flight to quality.
How do regional regulations impact the secondary market and how do you navigate the relevant challenges?
LI: Honestly speaking, regulatory complexity isn’t our biggest headache. Operating within the EU framework, often dealing with US-headquartered targets, creates a reasonably navigable environment. Tax considerations do arise case-by-case, but they’re manageable complexities rather than deal-breaking obstacles.
Looking forward five years, how do you envision Siena Secondary Fund influencing the growth and maturity of the Baltic and broader CEE secondaries ecosystem? How do you see your firm contributing to CEE’s shift from emerging markets to more developed market characteristics?
LI: Our ambition is straightforward: to become and remain the default liquidity partner in the region. When employees, founders, or early investors need an exit, we want to be their first call.
But the bigger picture is what excites us most. By providing reliable liquidity pathways, we’re enabling a crucial recycling of capital and talent. Early employees and founders can realize returns and reinvest in new ventures – think of the Skype ecosystem effect, where one success spawns many others.
Rain Tamm, General Partner at Siena Secondary Fund
This liquidity circulation creates a flywheel: more successful exits attract more foreign investment, which funds more startups, which creates more success stories. We’re not just buying and selling shares; we’re helping build the infrastructure for a self-sustaining, mature venture ecosystem. That’s the kind of long-term impact we’re working toward.
To conclude in the words of Siena Secondary Fund’s general partner Rain Tamm, ‘VC secondaries are no longer niche – they’re a smart, strategic layer in a maturing ecosystem. Siena is proud to lead this movement in one of the most dynamic regions for innovation in Europe.’
Siena Secondary Fund’s role in shaping the Baltic and CEE venture landscape is pivotal for unlocking liquidity for early stakeholders. This approach fuels reinvestment, strengthens high-growth companies, and attracts more institutional capital to the region. In doing so, Siena helps accelerate further transition of our markets to mature, self-sustaining ecosystems for innovation.
Kostiantyn is a freelance writer from Crimea but based in Lviv. He loves writing about IT and high tech because those topics are always upbeat and he’s an inherent optimist!
