VILNIUS - November has been a busy month for the burgeoning entrepreneurial scene in the Baltics. Promising entrepreneurs and startup companies have had numerous opportunities to pitch their business plans to investors through a series of events spearheaded by local and international organizations. Many of these events have been concentrated in the up-and-coming entrepreneurial markets of Riga and Vilnius, which hope to foster a startup culture as internationally renowned as in Tallinn.
Skype spurred the development of a vibrant entrepreneurial community in Estonia. Today it has the most startups per person in the world. Now investors are turning their attention towards the Latvian and Lithuanian startup scene.
One of the largest entrepreneurial events in the Baltics took place in Vilnius from Nov. 9-10. Aptly named “Silicon Valley Comes to the Baltics,” this event brought approximately 2,500 attendees to listen to over 20 speakers. Almost all of these speakers were currently working in northern California’s Silicon Valley.
Throughout the event, startups were provided with booths and various informal opportunities to pitch their businesses to venture capitalists and angel investors. They were also afforded with the opportunity to get advice from some of the most successful entrepreneurial incubators and business accelerators in the world today.
Many of the predominantly American speakers recommended that Baltic startups consider relocating to Silicon Valley to secure funding and gain access to their larger, more homogenous market. However there were a few notable exceptions of European entrepreneurs who encouraged a more local focus on the EU.
Peter Halacsy, CTO and co-founder of Prezi, described how his company developed an innovative software application for creating zoomable presentations. Originally based out of Budapest, Prezi expanded to San Francisco and is now considered one of Eastern Europe’s most successful tech startups. After his product was scaled up to reach a more international audience through the contacts he made in Silicon Valley, Prezi was able to return to its home country and establish permanent offices in Budapest.
“I wanted to change how people communicate. Not just how people in the U.S. communicate. But it’s a good place to start if you want to go global.” He suggests that this might be a preferable route for Baltic startups to follow, since they have the opportunity to tap into the large U.S. market without turning their back on their home country.
As a long-term venture capitalist that previously founded Berlin-based Rocket Internet, Uwe Horstmann also emphasized the importance of maintaining a local presence in Europe. Many of the early IT startups in Europe fled to the U.S. to secure funding. Now they are returning to Europe, which he says is a sign of the more robust startup culture that is emerging throughout the EU.
There are many signs that suggest the Baltic startup scene is taking off. Startup Wise Guys, a startup accelerator based out of Estonia, has already supported over 20 startups in the past two years.
StartupHighway is a Lithuanian-based accelerator that has already supported eight tech startups as well. And earlier this year the Riga-based incubator, Eegloo, opened for business after securing 200,000 euros in funding for future investment in new startups.
Mailigen is one of the many tech startups that have helped increase the profile of the Latvian startup community over the past several years. CEO and founder Janis Rose described how his startup, that provides Web-based integrated marketing solutions, has rapidly expanded. “Two years ago we were a very young company but we were already competing with large, international companies. They all had far more money and resources. Now we’re top five or six in our industry and we have offices in St. Petersburg, Moscow, Beijing, and Hong Kong. The future of our business is to expand to the larger markets of Russia, China, and the U.S.” He stated that the younger generation of entrepreneurs in the Baltics has less fear of taking risks and is more willing to target the larger international markets.
Another event that took place in November was #InnovationRiga 2013 Conference at the Stockholm School of Economics-Riga. Co-sponsored by TechHub Riga and four embassies in Latvia—Denmark, Finland, Sweden, and the U.S.—this event provided a rare opportunity for venture capital professionals, startup incubators and policymakers to discuss the future of the entrepreneurial scene in Riga.
The Global Entrepreneurship Monitor presented their annual report at this event, which supported the fact that Latvia’s entrepreneurial sector has many aspects in common with Estonia. Approximately 13 percent of all working age Latvians are engaged in starting or running a business that is less than three-and-a-half-years old. Estonia is statistically identical to Latvia in this category, while all other EU countries are below 11 percent. The findings of this report suggest that Latvia has many of the necessary components to have a booming industry for tech startups.
Startup Sauna—a nonprofit business accelerator based out of Finland—provided an interactive session at the event in order to help entrepreneurs understand the challenges of starting a business and achieving funding. This type of collaboration between countries in northern Europe has increased substantially over the last year and has fueled a substantial increase in the number of new startups in Latvia and Lithuania.
Similar to Estonia’s “Skype effect,” much of Finland’s success as a startup ‘mecca’ can be attributed to the Angry Birds game. This franchise revolutionized the mobile gaming world and ignited a tech startup boom in Helsinki. Now Latvia and Lithuania look to emulate their northern neighbors’ successes.
Most recently, Latvian-based Fun Generation Labs achieved a major victory for the country’s startup community with “Motocross Elite.” This mobile gaming app is currently ranked the 42nd most popular paid app on iTunes, making it the fastest selling app in Latvian history.