Introduction to Lithuania’s Start-up Sector
In the Baltic Land of Lithuania, the start-up sector has big ambitions, but they may not be that easy to achieve. A building location in the south of the country’s capital will be the plan for the project. Dozens of workers were busy there on a recent Thursday morning, with a truck mixing cement and an excavator discharging a small earth stain. The area should be transformed into Europe’s largest start-up hub by the end of 2028, called Techzity, which will organize 5,000 workers on around 55,000 square meters. It will offer cafes, restaurants, a fitness center, and apartments.
The Vision Behind Techzity
Darius Zakaitis, one of the founders of Techzity, believes that offices will have high ceilings in the project, which is "very important". He explains that scientific research has shown that the so-called cathedral effect strengthens creativity. Additionally, young entrepreneurs will be surrounded by equally creative people all day, leading to fresh ideas and innovation. The entrepreneur and his business partners invest EUR 100 million in the startup hub. Since Lithuania has neither natural resources nor many inhabitants, "we have to be very good in something," he explains. Zakaitis thinks startups are a good choice because Lithuanians know how to work hard and many speak English well.
Start-up Sector in Fintech Steps
Lithuania’s startup community hopes to pursue the leadership of the country’s fintech sector, in which technology is used to provide financial services and goods. According to the central bank of Lithuania, the country has given out most Fintech licenses in the European Union. Marius Jurgilas, a former board member of the Central Bank, said everything began with a visit to London through a delegation from the Lithuanian Ministry of Finance in 2015 and a speech by the then British Prime Minister David Cameron. Jurgilas and his team then developed a national fintech strategy that was later taken over by the cabinet.
Creating a Financial Gateway
Jurgilas has now named his own FinTech, which aims to create a European capital market union. He explains that they have created a financial gateway so that non-banks are connected directly to the central bank. And built a special bank license with a minimum capital requirement of € 1 million instead of € 5 million when the institute was initiated. X-ray, a crowdfunding platform for investments in real estate in Vilnius, was one of the first fintechs that jumped on this train in 2017. The founder of Martynas Stankevicius believes that the country’s low-selling arms are a clear framework and its small size.
Lessons from the Ripple Scandal
By the end of 2024, Lithuania had granted 282 Fintech licenses. But the initial zeal has now made a more prising attitude. Lithuania now rates new applications more thoroughly, says Lukas Jakubonis, Chief Business Development Officer of the Central Bank of the State, the Bank of Lithuania. The big wake-up call was the scandal of the German financial service provider Wirecard. The scandal was the reason for the Lithuanian authorities to become "particularly strict" in relation to violations of the rules to avoid money laundering, said Jakubonis.
More Growth is Required
But the scaling is a problem, even in Lithuania. The Baltic State has only three so-called unicorns, which have startups worth more than $ 1 billion. Martyna’s Gruodis, political analyst at the Lithuanian Free Market Institute based in Vilnius, says that access to private and institutional capital is indeed a problem for startups, especially in early stages. A tax reform of 2025, which increased tax and personal income taxes, has further restricted the "ability of the startups for reinvestment", the economist explained. One of the best-known startup success stories in Lithuania is Vinted, an online platform for second-hand clothing. It was founded in 2008 by two Lithuanians and became the first unicorn in the country in 2019. Last year Vinted achieved revenues of 813 million euros and now have more than 2,000 employees and numerous offices across Europe.
