Earlier this summer, I had the opportunity to spend a few days in Lithuania to check out the startup scene there. I’d never been to Lithuania before, but the country has long been on my radar. Part of the reason for this is the many initiatives the country is putting forward to help develop their technology and entrepreneurship ecosystem, with a special emphasis on fintech. These actions have been garnering quite a bit of attention (see here, here and here), with good reason. When it comes to building advantageous policies for startups, Lithuania has learned from some of the best outcomes of it’s neighbors Estonia and Latvia, and added some unique elements of their very own. The result is a comprehensive package for fintech companies, with the fastest payment and e-money licensing in Europe, a regulatory sandbox to test financial innovations, a startup visa to welcome entrepreneurs from around the globe, and a unique bank license specifically designed for challenger banks.
While policies and infrastructure are important components for building a vibrant startup ecosystem, at the heart of the best tech communities in Europe is people. People that are willing to put in the work and commitment to help one another. People who understand that, at the early stage, collaboration will move things farther further, than competition. It is these places that networks are built and shared, and where the different actors in the ecosystem learn from one another and work together for the benefit of the community. Importantly, I’ve found that Vilnius has this crucial element. The Vilnius tech community is tight-knit, but accessible. You can’t help but notice how the entire ecosystem seems committed to pitch in to help one another, and that the community rallies around its success stories (case in point, Lithuanian-Australian startup Evarvest who raised nearly 3x their sought investment on Seedrs this summer). You see it in how the Mayor takes time out to attend demo day, and when the startup community wants to connect with government, they know excatly who to contact and know that their concerns will be listened to.
In this series, I’ll be sharing some of my impressions of Vilnius, through conversations with some of the ecosystem’s most important stakeholders. One of my first destinations in Vilnius was to Invest Lithuania, the country’s one-stop destination for business development. You can listen to my interview here, or read the transcript below.
Hi, Invest Lithuania, thank you so much for meeting with me today. Can you tell us a little bit about what invest Lithuania does? What makes it a great time to move your startup to Lithuania right now?
Three or four years ago, we started working on the FinTech industry. Specifically, we saw that Brexit gave us a chance to put ourselves on the FinTech map. We built our value proposition together with the local institutions, and we're basing it on three main pillars. The first one is the regulatory environment. We have the fastest licensing procedure in the European Union. In three months, you can get a payments license and work across Europe. This procedure is two to three times faster than other places in Europe.
We also have a specialized banking license, which is dedicated to challenger banks that want to scale their portfolio and do lending and deposits across Europe from Lithuania. All the documents can be submitted in English. There's a new commerce program and a lot of initiatives to help startups from the FinTech sector come to Lithuania. The second part is that Lithuania has “railways” for the FinTech startups. They can connect directly through the Bank of Lithuania’s regulator, to set up a payments system and make payments in euros, which allows companies to skip the middleman, manage risks and save costs. And the final point is the talent pool that we have here. A lot of companies have leveraged the local talent to scale their operations here.
In a number of conversations that I've been having in Vilnius, it's always coming back to talent, and the really great strength of your technical talent here. Something I've also learned is that you have an almost nearly 50-50% balance of women in ICT positions. Can you talk a little bit about some of the competencies of the Lithuanian talent pool?
Historically, Lithuania has attracted a lot of financial service companies. Barclays, Western Union, NASDAQ, and a lot of Scandinavian banks have been developing their technologies in Lithuania for a long time. [Because of these competencies] we saw that this is a good foundation to build on the new FinTech sector. We have also attracted a lot of product development teams, from companies like Uber, and Wix.com. They have helped to build a really strong product development background, as well as scale the local talent pool as well. I think this combination has helped companies from the FinTech sector scale in Lithuania.
Let's talk a little bit about some of the impacts of some of these great companies coming to locate and in Lithuania. So you mentioned Wix. com, but you've also had Google, Oracle, Revolut, some of the world's top name brands are have come here. What have been some of the impacts on the local startup ecosystem?
What we see is from from the macro level, when we were looking into this sector, we see that when a company brings their own international experience, their way of working, and their way of understanding different markets, it helps the local startup community to actually scale in a fast manner. Now we have quite a few people who’ve worked at the international companies, they learn the ways of doing things in the international business scene. And then they started their own companies. Now, they’re attracting talent from abroad. This has kickstarted our entire startup ecosystem.
Something that this new regulatory environment has done is increased the attraction of Lithuania for companies from all over the world. Can you give us an example of a company that's come from abroad to it to Lithuania and some of the success that's come out of that?
Today, there's more than 170 companies in the FinTech sector already in Lithuania. Most of them are coming from the UK, United States, Singapore, and China and Israel. The case that I'm most excited about is a company from Singapore. We started talking with them a few years ago, and understanding what they were looking for. We convinced them to choose Lithuania. Since then, they have already raised a series C, and have more than 30 people working in business office. This is a really exciting time when you see international teams here in Lithuania.
If an international company or startup is looking to startup in Lithuania, where's their first destination? Who do they need to talk to?
First of all, we would like to invite companies to visit Lithuania. I think that's that's the best way to to discover business opportunities here. We [at Invest Lithuania] would be more than happy to introduce them to the local ecosystem to help build connections here to understand the regulatory environment here and maybe even some clients on the way.
In closing, what's one thing that everyone should know about Lithuania?
Lithuania is going to be the next FinTech hub in Europe in the coming years.