Move over, Silicon Valley, it’s Lithuania’s time to shine. Late last year,
Vinted was crowned
Lithuania’s first tech unicorn - the online used-clothing retailer raising 128 million euros in a funding round that valued it at more than 1 billion euros. But this is just the tip of the iceberg that is the tech start-up scene in Lithuania.
Calculated on an annualised growth rate, the Funding Growth Index in Lithuania is
ranked at 9 out of 10, proving that the country is experiencing a significant growth in total startup creation. The Index measures growth in early-stage funding (Seed and Series A) on a scale of 1 to 10. Currently, there are
921 startups in the country and these attracted a record 138 million euros in investments in 2018. Lithuania’s capital, Vilnius, is also becoming one of the most attractive destinations for foreign businesses. Take Revolut for example: the British FinTech start up recently announced that it is
shifting its European payments to Lithuania post-Brexit.
Earlier this month, I happened to be visiting my home country so this provided the perfect opportunity to learn more about the Eastern European (although we would love to be called
Northern Europeans now!) startup ecosystem. The Startup Museum, a joint initiative of Go Vilnius and the Talent Garden Vilnius which opened in December 2019, is a unique space which tells stories about Vilnius-based startups that have grown to become well-known international companies. So, what is it about my home country and its capital that makes it the perfect place for these innovative new businesses to thrive?
Easy to do business
Forget long registration forms and complex legislation. All you need is an e-signature. Once you have it, it takes one day (yes, only 24 hours!) to register your business. Lithuanians might be perceived as people of few words, but they certainly know how to get things done.
Besides ranking
11th for ease of Doing business globally, there are more than 39 platforms available for innovators to expedite their businesses: 12 incubators/hubs, 11 investment organisations, 11 accelerators and 5 sandboxes not only help attract new companies but enable existing ones continue flourish too.
Additionally, with initiatives such as the Startup Visa which has no capital or employment requirements or individual consultations, the local government offers plenty of support to new businesses and help when they are looking for the right talent. For example, this fantastically supportive environment is why
Vilnius has been ranked as No 1 in Financial Times’ fDI Attraction Index.
World class talent
Vilnius is one of the youngest European capitals: almost half of its population are under 40 years of age and 85% of young professionals speak fluent English. This is one of the main reasons why, in the last 20 years, the government has invested heavily in the talent base resulting in an estimate of 31,000 IT and over 6,000 Research and Development professionals which make Vilnius a city like no other. In addition, the high-quality education programmes in local universities such as Vilnius University, Kaunas University of Technology, Vilnius Gediminas Technical University and others helped Lithuania rank No 3 in the list of best educated graduates among EU capitals.
The country’s main technology hubs, like
Vilnius Tech Park, the biggest tech startup hub in the Baltics, and
Sunrise Valley Science, which provide space, support and access to this world class talent are supported by higher education institutions like Vilnius University, Vilnius Gediminas Technical University. Their graduates have immediate access to these exciting job opportunities and the burgeoning start ups can source the brightest and most innovative minds from their cohorts.
The experts in fintech and mobility
Two of the sub-sectors where Lithuania is seeing particular success are fintech and mobility. According to Forbes, Lithuania has become
one of Europe's most exciting fintech hotspots. This comes after local organisations like the Bank of Lithuania have offered support and provided a sandbox that allows them to test their solutions in a regulated environment before launching worldwide. The country then saw a 45% increase in fintech companies in 2018 - from local startups like
TransferGo to global players like Revolut and Earthport.
CityBee and
Trafi are among the biggest local mobility companies in the country. Trafi, the world's first mobility-as-a-service and the biggest mobility software supplier for Google, Lyft, Volkswagen, was also the official travel planner during the 2016 Rio Olympics. CityBee whose biggest success year was 2018 is one of the leading car, bike and electronic scooter sharing service in Central and Eastern Europe. These two giants, together with other mobility startups, are revolutionising city traffic and the way people travel. Such success stories only prove that this Lithuanian support system is helping startups to spread their wings and become world renowned companies.
The Vilnius
Startup Museum also features other successful startups including
Deeper,
Bored Panda,
Nanoavionics,
Tesonet,
Oberlo,
Pixelmator,
Brolis Semiconductors,
MailerLite and
CGTrader. This broad range of specialist businesses in Lithuania illustrates the constantly growing startup ecosystem and also proves that it’s not just investments and support which help the businesses to flourish - innovative ideas, creativity and passion for what you do are the crucial ingredients for success.