You may not have ever been to Lithuania or have heard much about it, but this small baltic country of 2.9 million is going to surprise you in the near future.
Lithuania, is probably the most courageous and progressive of the Baltic states at the moment. With a young workforce and vibrant startup atmosphere the country is railing towards a fast modernisation and economic development.
The “Startup Fair”, arranged for the third time in the capital Vilnius is a testimony to this ongoing development. The two day event attracted over 2500 attendants on 29th and 30th of May. Lithuanian and international startups and investors gathered to listen to speakers and panels, to meet one-to-one, and make deals.
The event started with an excellent panel with four of the most successful founders of Lithuanian startups. Damantas Dvilinskas from Transfergo, Martynas Gudonavicius from Trafi, Tuomas Okmanas from Tesonet, and Andrius Šlimas from Oberlo were interviewed by the head of Startup Lithuania Roberta Rudokiené.
The founders spoke openly about their success and failures and gave valuable advice to the audience.
Trafi is a mobility app with info about all public transport and beyond. Tesonet is a VPN and digital service company with 12000 servers worldwide and a staff of 650+. Oberlo on the other hand is a drop-shopping ecosystem acquired by Shopify in 2017.
TransferGo is probably the most successful startup in Lithuania. TransgerGo is a Fintech startup focusing on remittance money transfer for immigrants established in 2012. The company uses a digital account-to-account business model, which means that money transfers do not have to leave the country as funds are paid in and out locally.
The company currently operates in 47 countries around the world, with offices in London, Vilnius, Berlin, Warsaw and Istanbul. It claims to have a customer base of 833,000 users, and adding more than 1,000 new customers per day. The company just raised over $17.6 million in Series B funding last year.
Fintech is one of the focus areas of Lithuania and the authorities are working hard to make the country a Fintech investment hub. Lithuania is the first EU country to implement the new banking directive and issue “light” banking licences to companies with a capital of 1 million Euros.
Over 170 Fintech companies are based in Lithuania and one of the attractions facilitating their development has been a suite of sandboxes launched by the Bank of Lithuania to provide Fintech startups with a regulatory environment for testing their solutions.
The Central Bank has also launched a Blockchain Sandbox. The Open Banking Sandbox, Launched by Lithuanian commercial banks gives access to third parties to innovate new solutions in banking. There are also Energy and Poptech Sandboxes for experiments in energy solutions and real estate.
Going around in Vilnius, it is obvious that the country has an open mind for new technology and startups. Mobility startup Citybee offers cars, bikes and electric scooters with one app to go around the city seamlessly. Citybee is already vlued at €300 million after raising €110 million from Moduc Groupd LLC last year.
Uber, Taxify, Yandex and any other app and service is available and public transport works well. Prices are low and quality of food and services are good. The country offers 10 years of tax free earning for foreign direct investment in certain geographical areas.
In addition to availability of educated workforce in different fields, Lithuania is extremely cost-competitive when it comes to establishing R&D centres. As an example an R&D center with 55 employees would have a monthly cost of €64 777, while the same would cost €224 556 in Finland and even more in Germany. Expenses for R&D are fully deductible 3 times and corporate tax can be reduced by up to 50%.
Situated right beside the city’s old prison, Ministry of Finance of the Republic of Lithuania is where many of the jailbreaks from regulations are planned. Minister of Finance Vilius Šapoka moved to this position from the Central Bank of Lithuania where he was the director of Financial Services and Market department.
“We decided that we want to be number one in Fintech, and this is why we developed a strategy called STIG” explains Minister Šapoka. “S stands for Start. We have made it easy to start a company. Our central bank has a fast licensing program and there is a newcomers program. Also a Sandbox regime has been introduced. T Stands for Technovate. Our tax system is oriented to support development so you can deduct development costs 3 times and we have a world class ICT infrastructure with a cyber security among top 3 in Europe. I stands for invest, i.e. we invest a lot in the future regulatory framework in order to keep abreast with the market and great cooperation with the central bank. Investments in new tech is up to 100% deductible form taxes. G stands for Grow. We have a big talent pool in the area of Fintech and a flexible labour code recently introduced, to the extent that Lithuanians are coming back for other countries including london.”
In order to facilitate the movement of people and make it easier for companies to have a branch or their headquarters in Lithuania, a subsidised direct daily flight to London City Airport has been started which is operated by LOT.
The medical image analyses company Oxipit is just under 2 years old, but has been able to get a CE certificate for its chest X-ray analysis algorithm, which recognises pathological finings with a 94% accuracy. It all started in a hackathon where founder Gediminas Pekšys and couple of other AI specialists where mentoring and there they met their co founder Naglis Ramanauskas, a medical doctor who is now a radiology resident. The team had wanted to do something with medicine and when they learned about the backlog of X-ray images, they decided to put their AI and image recognition capabilities into solving that problem.
Gediminas graduated in Mathematics at the University of Cambridge, then spent 7 years working at the intersection of Data Science and Software Engineering. His team has won largest Computer Vision competition in 2017 on Kaggle.
They managed to get X-ray image data from Lithuanian centra hospital, although it was not easy. “The situation is getting easier as several anonymised datasets have been released recently”, says Gediminas. The solution is in trial with hospitals in Lithuania. “we are now trying to show what can be done with AI and think of revenue later.”
The filed of X-ray image analysis is hot and crowded and there are many global bigger and smaller competitors. Gediminas is however not worried about it. “One example is the diabetic retinopathy where Google worked on, but later gave in to smaller companies. It’s much easier for small startups to move fast.”
The company has had an EU research funding and now opening a funding round.
CasZyme never needed investment as it hit the ground running. The company was established by Prof. Virginius Šikšnys who had contact with clients through his academic a speaker background. Caszyme is a genetic engineering company focusing on Crisper technology. The founder and chairman of the board Prof. Šikšnys is pioneer of CRISPR-Cas gene editing research and first to demonstrate that CRISPR-Cas9 can be used to operate precise double strand breaks in DNA.
Caszyme focuses on exploring new Cas Proteins for various applications, providing research services for CRISPR applications, and developing and characterising new CRISPR based Molecular Tools.
“Our strategy is to be co-owner fof the IPs and be able to apply it to other industrial solutions, e.g. a solution developed for human use can be applied to industrial biotech where there is no direct competition and mutual benefit for all, and this is how the Crisper industry is operating, everyone is cross-licensing the IP to others and the whole industry is developing much faster.” says CEO Dr. Monika Kavaliauskė.
Caszyme is working with companies like Dupont and agricultural giant Corteva which separated from Dupont and is focusing on GMO plants.
SIMONA SIMULYTĖ started Changemakers’on with zero funding. She is also one of the founders of Lithuanian Social Entrepreneurship Association. Both of these organisations are focusing on social impact entrepreneurship. In his speech in the Startup fair titled Tech4Impact, she talked about leveraging technologies to address grand social challenges.
Social Entrepreneurship Association is an NGO trying to inspire startups to create an impact and also help new social impact startups being founded.
One fo the programs founded by Simona is Voyage Challenge, which takes entrepreneurs to spend one week on a boat somewhere around Sicily or Canary Islands and one week on land to solve problems together. The teams get coaching and brainstorm ideas.
Text and images
Alexis Kouros - 6D
Lithuania Fact box
Population 2.9 mil
84.2% Lithuanians, Poles (6.6%), Russians (5.8%), Belarusians (1.2%) and Ukrainians (0.5%)
56% of population have higher education
80% English language efficiency among young professionals
52% speak at least 2 foreign languages
14th in global ranking in the ease of doing business among 190 countries
It takes only 3 days to start a new business
1st Globally for technological skills
20% increase in IT student pipeline over 2013 - 2016