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bne June 2021 Companies & Markets I 19
Baltic states want to ensure the golden goose keeps producing unicorns
Linas Jegelevicius in Vilnius
Over the past 20 years, Estonia, a country of just
1.3 million people, has given birth to an astonishing seven unicorns, this year’s crop being Zego,
which insures commercial vehicles, ID.me, which offers personal identification solutions, and Pipedrive, a cloud- based CRM tool.
The other Baltic states, Lithuania and Latvia, have been no slouches either. Lithuania in particular is enjoying a startup boom, with Vinted, the secondhand fashion marketplace, becoming its first unicorn (a startup with a value of more than $1bn) after a funding round at the end of 2019.
Nor is the region resting on its laurels. According to a report from Startup Wise Guys and EIT Digital, in the first half of 2020 the region saw significantly more funding than in the same period of last year (see chart on the right).
Overall, the number of startups per capita in the Baltic states has increased, especially in Estonia where there were 39% more startups than last year. Latvia and Lithuania also recorded increases of 15% and 4% respectively.
“I would be brave enough to say that coming from the Soviet past the Baltic states are a unique phenomenon, if not globally, than on the European scale for sure,” says Zane Bojare, Head of Marketing & Communications at Latvia’s Startup Wise Guys, one of the leading B2B accelerators in Europe.
The three Baltic states may have been incredibly successful at hatching startups – particularly given their size and communist heritage – but some big names in the local investment scene are now warning that they may be running out of steam, given the limited size of their
local talent pools.
“Despite some challenges and setbacks, the Baltics, including Lithuania, are indeed a good place for startups. But it is worse now than it was five years ago,” says Ilja Laurs,
a Vilnius-based serial entrepreneur and venture capital investor who chairs Nextury Ventures. “I believe that Lithuania is starting to lose ground on many aspects against Estonia, Poland and the hot startup countries beyond the region, like, for example, Singapore.”
Making a splash
In interviews, top figures from the local startup scene told bne IntelliNews what makes the region special and shared their thoughts on whether and how it can maintain its incredible record.
Although all three Baltic nations are A-listers on the
startup stage, it is Estonia that has made the loudest splash internationally. Like the other Baltic states, it had the benefit of a strong Soviet educational background, especially in sciences, and the links the countries reforged, first with the Nordic states and then with the rest of the European Union after accession in 2004. But Estonia was also quicker to make business-focussed reforms and encourage inward investment.
Perhaps most importantly, with Skype communication soft- ware, which launched in 2003, Estonia made a spectacular start, helping it to build a tech cluster and develop an invest-
2019 H1
€176,347,244
85%
€149,869,608
€15,165,524 €11,312,113
€97,942,648
€6,000,000 €158,626,127
€155,549,605
€11,755,682
€34,491,946
2019 H2
€262,568,776
60% 2020 H1
€201,797,233
37%
2%
77%
6%
9% 6%
Estonia
17% Lithuania
Latvia
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