Lithuania's fintechs fuel startup boom

DW (English)

Lithuania's startups are on the rise with fintechs showing the way. There's hope the sector could become an economic backbone. But more young tech companies will need to take the leap.

Transcript

00:00This is set to become Europe's biggest start-up hub – Tech City in the Lithuanian capital of Vilnius.

00:08The 55,000 square meter site will host roughly 5,000 workers once it's completed in 2028.

00:16One of Tech City's co-founders tells us why they decided to pitch camp in this former sewing factory.

00:23An office with high ceilings, like we have here, is very important because it's a cathedral effect.

00:31It's proven by science that it's boosting your creativity.

00:37The airport is nearby, the train station is nearby, and it's very convenient, it's in the middle of a city.

00:46The entrepreneur and his business partners are investing 100 million euros in the hub,

00:51which they think could one day be a driver for Lithuania's economic growth.

00:57We do not have natural resources, we do not have a lot of people,

01:03so we need to be very, very good in something.

01:07And I think in building a start-up, we are very good because we know how to work hard.

01:14A lot of people talk English. In 2030 we will manage to achieve 25% of our GDP from the start-up sector.

01:26Oh, that's very ambitious.

01:28Very ambitious. Now it's 5%.

01:31Lithuania only makes up for less than 1% of the EU's GDP and its population.

01:37But the country tops the EU charts when it comes to fintech licenses.

01:43It has issued more than 280 of them.

01:46This came after Lithuania streamlined its regulations a decade ago.

01:51Röntgen was one of Lithuania's first fintechs,

01:54a crowdfunding platform for investment in real estate set up in 2017.

01:59It now has an annual turnover of €2 million and 17 employees.

02:05Its founder says the country's small size is a clear advantage.

02:10We can access direct conversations with the Bank of Lithuania or ministries

02:15and have a good relation with them.

02:17So it allows a lot faster innovation and problem solving.

02:21After an initial fintech push though, Lithuania tightened the rules three years ago

02:27to prevent money laundering.

02:29Indrada Geeta still opened her startup Bemibond, another crowdfunding platform, last year.

02:35She says Lithuania now has a lead that other countries will struggle to catch up with,

02:41as existing fintechs provide a proper support system for newcomers.

02:47You need a lot of advice in terms of establishing your businesses from the outset.

02:52And these companies, they've gone through these rounds,

02:55they've gone through these sort of activities and experiences that you're going through.

03:00So it's very useful to get this advice.

03:02But investment volume remains a sore spot.

03:06Hello guys.

03:07Hi.

03:08Lithuania only has three unicorns,

03:12that is startups valued at $1 billion or more.

03:15Gintaro Verbekeiter counsels young companies on how to scale up.

03:20She says the government should provide more funding, especially for certain areas.

03:25Deep tech is of course, you know, the sector that needs patient capital.

03:29The government role is very important to support investments in the sector.

03:33We have also this announced 40 million fund for defense companies and dual use developments.

03:39But still, I think, you know, we could definitely raise that, you know, triple at least.

03:43So that one day Lithuania can indeed reach the startup sky.

03:52Getting in touch with the sector to support investments in India.

03:56It's really very interesting to see what the industry is looking at.

03:59What kind of equipment do we need to build a way to build a way to build a way to build a way to build a way to build?

04:04We can be able to build a way to build new funding,

04:08with a way to build a way to build a way to build a way to build them.

04:11We need to build a way to build a way to build.

04:14And I cannot do this in any ways to build a way.

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