Start-ups are paving Latvia’s road to the modern economy


The new start-up ecosystem in Latvia is developing very rapidly — currently, there are about 320 start-ups in Latvia that have been able to attract investments for more than EUR 210 million and are rapidly entering the global markets, demonstrating a strong competitiveness of these companies and the potential of Latvia to promote the growth of start-ups. The most significant sectors in which the strongest Latvian start-ups have developed are financial technologies, ICT, robotics.

Latvian start-ups have proved themselves on the international market, both by attracting investment and by participating in the world's leading accelerators in Europe and the Silicon Valley. The drone producer Atlas Dynamics has attracted investment in the amount of EUR 8 million last year, one of the largest deals in attracting the investment. I have actively followed successes of our other start-ups, such as Sonarworks, a technology for sound calibration technology, and the financial technology company Notakey.

The environment in which start-ups are emerging and developing around the world is changing very rapidly, and we as a policy makers must be flexible and open to change in the global economy. Law On Aid for the Activities of Start-up Companies which was one of the first instruments of this kind in the EU along with the support programs represent the state's preparedness to support innovative entrepreneurship and to create growth-oriented incentives to that end.

Today, Riga is attracting technology enthusiasts and leading experts from around the world for the start-up conferences TechChill and Digital Freedom Festival. The Investment and Development Agency of Latvia not only offers support tools for start-ups, it also organizes the technological innovation festival iNovuss.

As policy makers, we have worked hard to build relationships with the representatives of start-up sector. Last year we were actively working on the development of regulatory framework and support programs, and the priority of this year is establishing closer links between universities and corporations with the start-up ecosystem.

Universities, providing not only the training of young professionals, but also playing an important role in promoting technology transfer and commercialization of research results, are crucial to building sustainable start-up ecosystems. In January of this year, we organized the first start-up community forum where we discussed the activation of higher education institutions in the creation of a start-up ecosystem. It is positive that changes in the model of co-operation between higher education establishments and star-ups are already present, as witnessed by the first training program for the accelerator blockchain developed by the University of Latvia, as well as the activities of the Riga Technical University in the accelerator of climate change and the implementation of the Design Factory.

Corporations and large public enterprises also play a key role in stimulating research and development, as well as creating a system of innovations. We are pleased that large technology enterprises, such as Lattelecom, are working with start-ups to create the Overkill ventures accelerator fund, while Swedbank has unveiled financial technology accelerator in cooperation with StartupWiseGuys. In the autumn, we are planning to host a second start-up community forum to discuss expansion of synergies between corporations and start-ups.

The active involvement of the industry in international marketing and the expansion of synergies is also important for the growth of start-ups. Last year, together with start-ups and, we visited 3 globally strategic locations - the Silicon Valley, Israel, and Finland. In Israel, the epicentre of innovation and technological development, we gained experience in technology transfer and the involvement of universities in the culture of start-ups. For the first time there was the Latvian National Stand in the largest start-up festival in Northern Europe held in Finland – Slush; we introduced the international investor's elite with the Latvian start-up ecosystem, investment environment and support instruments.

            Meanwhile, this year in the Silicon Valley, which is a global start-up and investor networking site, the Ministry of Economics opened IDAL's representative office in the global network WeWork, which means that Latvian start-ups may use office space and international networking opportunities in both San Francisco and more than 50 cities worldwide. Today, more than 10 Latvian start-ups are operating in Latvian representation in the Silicon Valley, and the first trade mission to the Silicon Valley was organized in March.

In the final reading, the Saeima endorsed the amendments to the Law On Aid for the Activities of Start-up Companies, which will further accelerate the development of start-ups in Latvia making state aid more accessible to start-ups, and they will have a positive impact on the development of innovation systems, venture capital and business angel movement in Latvia.

The available investments will also play significant role in the growth of start-ups this year - acceleration funds with a value of EUR 15 million and venture capital funds with a funding of EUR 60 million have been launched in the first quarter of 2018.

Last update:    01-02-2019