Vilnius, the capital and largest city of Lithuania, has a relatively unknown startup ecosystem that is on the fast track to becoming one of the key players in the region and has managed to achieve tremendous growth in a very small period of time. Currently the second-best ranked ecosystem in the Baltics, according to our latest Startup Ecosystem Ranking Report for 2020, Vilnius is well-positioned between neighbouring Russia, Scandinavia and Central Europe countries to establish itself as an emerging tech hub.
This article will provide an overview of the Vilnius startup ecosystem, explore insights from our recent Global Ecosystem report and provide an analysis of the challenges and strengths currently present.
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Overview of Vilnius Startup Ecosystem – The City
Vilnius is a small city of 552,000 people known for its baroque architecture, laid back charm and relatively low cost of living. But one really needs to visit Vilnius first to understand the cultural drive, level of enthusiasm and atmosphere of innovation that powers the ecosystem and creates solutions for technology to be used to make life better.
Capitalizing on its obscurity, Vilnius has made headlines with tourism destination slogans such as the award-winning ‘Vilnius – the G-spot of Europe’ campaign, and the more recent ‘Vilnius: Amazing Wherever You Think It Is”. Primarily aimed at European tourists, the campaign led to a tourism increase of 12.5% according to CNN and put Vilnius on the map as a holiday destination.
This quirky, bold and fearless culture of Vilnius, has also appealed to startup founders and overseas investors that are drawn to the vibrant and close-knit community on offer both in the private and public sectors. In particular, the public sector support in the field of startup innovation has created a friendly and open regulatory system for businesses that as Inga Romanovskienė, Director of Go Vilnius has said, creates “… a city with a startup mindset – an extremely fertile soil for a startup scene to thrive.”.
In terms of talent, the maturity of the ecosystem is also progressing at a fast pace, with one of the highest concentrations of highly skilled developers for a country of its size, boosting the local ecosystem. The rapid growth alone is a true testament to the presence of an experienced, and marketing-oriented technical talent pool in Vilnius.
Insights from data on Vilnius
As a young startup ecosystem that has been established only in the last 10 years, Vilnius has managed to increase its ranking for yet another year, with a leap of 10 spots, to sit at a global rank of 75. In Europe and the Middle East region, Vilnius is in the 24th position and is greatly overperforming in the verticals of e-commerce, fintech, hardware, marketing and transportation. As the largest ecosystem in the country, this has led to a positive increase for the Lithuanian startup ecosystem as a whole, that is currently ranked in number 15 globally, just two spots below neighbouring Estonia.
The main vertical focus in Lithuania is fintech, with revolutionary industry practices and considerable effort put forward investments and upgrading of local regulations that have created huge incentives for entrepreneurship activity. With a number 4 place in the Global Fintech Index, and Vilnius ranking 5th in the EU, Lithuania has cemented its position as an emerging European hub, with progressive regulations, a Fintech sandbox and more than 100 Fintech startups in the country. The lack of bureaucratic red tape and complicated paperwork has also earned Lithuania the 11th place in the world for ease of doing business, according to the World Bank’s annual rankings. Lithuania has also recently celebrated its first-ever unicorn, Vinted, showing its tech industry potential both regionally and globally.
Startup Visa in Vilnius
Launched in 2017, the Startup Visa Lithuania is a government initiative and one of the many proactive steps taken that have strengthened the startup ecosystem and attracted foreign investors. Interested parties will find a streamlined and hassle-free process to guide you through relocating and accessing legal, administrative and government support to ensure the smoothest integration.
Notable Startups in Vilnius
Vinted is the largest online international C2C marketplace in Europe, dedicated to pre-loved fashion, with a growing member base of 25 million users spanning 12 markets. In 2019, it became the first startup born in Vilnius to reach unicorn status.
Citybee started in Vilnius as the first carsharing business in the CEE and has now grown to provide users with access to many different modes of transport, such as e-scooters, bicycles, passenger cars, and cargo vans.
MailerLite– provides an intuitive powerful email marketing solution backed by world class support. In 2019, SaaS Magazine recognized MailerLite as the 5th fastest growing SaaS business worldwide
Tesonet– One of the largest Lithuanian startups operating in Vilnius and potential next unicorn even though the company does not attract investors. Tesonet provides expert services in cybersecurity and digital products and has a large team of more than 500+.
Important Players in the Vilnius Startup Ecosystem
Vilnius Tech Park – one of the largest tech parks in the Baltics and a marvelous initiative in a beautiful location of more than 9 thousand square meters. Originally the palace of the Lithuanian noble family, the site was repurposed and used as a military hospital until the Vilnius City Municipality transformed it into a center of innovation. It brings together a hub of coworking spaces, accelerators and global companies
Go Vilnius – the official development agency of the City of Vilnius, is focused, among other things, on supporting visitors, investors and relocating entrepreneurs.
Vilnius University – an active participant of the startup ecosystem and with over 17,000 students Vilnius University has close partnerships with businesses that draw on its talent pool through recruiting events, internships and trainings. The university also runs specific “Innovation Support Services”.
Enterprise Lithuania – a non-profit agency operating under the Ministry of Economy and Innovation and important supporter and facilitator of the startup ecosystem in Lithuania.
Startup Lithuania – powered by Enterprise Lithuania, the governmental institution, which aims to support business establishment, entrepreneurship and fosters export. (Source: Startup Lithuania)
It is always interesting to see relatively smaller ecosystems flourish despite their size and population. Vilnius is one of those ecosystems that continue to improve as years goes by.
This Baltic City’s growth was not overnight, it was the combination of the growing enthusiasm for entrepreneurship and the government’s support that is slowly pushing Vilnius in the limelight.
With programs such as the Startup Museum and several startup support systems, we only expect to see further growth in Vilnius in the coming years.
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