In the Baltic country of , the sector has great ambitions — but achieving them might not be that straight forward.
A construction site in the south of the country’s capital Vilnius will be key to the plan.
Dozens of workers were bustling about there, on a recent Thursday morning. A truck was mixing cement with a humming sound, a dredger was flattening a small patch of earth.
The area is supposed to turn into Europe’s biggest startup hub by the end of 2028. So-called TechZity will host 5,000 workers on roughly 55,000 square meters (65,7779 square yards). It will accommodate cafes, restaurants, a fitness center, and flats.
Darius Zakaitis, one of TechZity’s founders, notes that office spaces in the project will have high ceilings which is “very important.”
“Scientific research has proven that the so-called cathedral effect boosts creativity,” he told DW while walking across one of the floors of one building, which used to be a sewing factory.
“Plus, the young entrepreneurs will be surrounded all day by equally creative people. That’s how they come up with fresh ideas — and the magic starts,” he added.
The entrepreneur and his business partners are investing €100 million ($117 million) in the startup hub. As Lithuania does neither have natural resources, nor many inhabitants, “we need to be very good in something,” he explains.
“I think startups are a good choice, as we know how to work hard and a lot of us speak good English. In 2030, we could achieve 25% of our GDP through the startup sector. And yes, that’s very ambitious — the share now amounts to five percent,” Zakaitis said.
Startup sector in fintech footsteps
Lithuania’s startup community is hoping to follow the lead of the country’s fintech sector which is using to provide financial services and goods.
According to the Lithuania’s central bank, which also regulates domestic financial markets, the country has issued the most fintech licenses in the European Union.
Marius Jurgilas, a former member of the board at the central bank, says it all started with a visit to London by a Lithuanian finance ministry delegation in 2015 and a speech by then British Prime Minister David Cameron.
“He declared that the UK had the ambition to become the world’s fintech hub. We looked at each other and wondered — what do they have that we don’t?” Jurgilas told DW.
Subsequently, Jurgilas and his team elaborated a national fintech strategy, which was later adopted by the cabinet.
“We created a financial gateway for non-banks to be directly connected to the Central Bank. And we set up a special banking license with a minimum capital requirement of €1 million instead of €5 million at the initiation of institution,” he explained.
Jurgilas has meanwhile founded his own fintech, called Axiology and aimed at creating a European capital market union.
Röntgen, a Vilnius-based crowdfunding platform for investment in real estate, was one of the first fintechs to jump on that bandwagon in 2017. Founder Martynas Stankevicius thinks the country’s selling points are a clear framework and its small size.
“Here, we have direct access to the Bank of Lithuania [central bank] and the ministries,” he told DW, which allows for “a lot faster innovation process.”
“When your new business model encounters unprecedented problems — which is inevitable — it’s easy to get in touch with the regulator and agree on a path that’s both acceptable to the regulator and won’t stop the innovation process at our side,” said Stankevicius, adding that his fintech Röntgen now has 17 employees and an annual turnover of €2 million.
Lessons from Wirecard scandal
By the end of 2024, Lithuania had issued 282 fintech licenses. But the initial zeal has meanwhile made way for a more prudent stance.
Lithuania now assesses new applications more thoroughly, says Lukas Jakubonis, chief business development officer at the country’s central bank, the Bank of Lithuania.
“The major wake-up call was the scandal at [German] financial services provider Wirecard. We suddenly understood that each of these licenses adds a little bit of extra risk to the jurisdiction,” he told DW.
after a series of corrupt business practices and fraudulent reporting had come to light.
The scandal was reason enough for Lithuanian authorities to become “extra strict” regarding breaches of the rules to avoid money laundering, said Jakubonis.
Indre Dargyte still opened her startup Bemybond, another crowdfunding platform, last year. Even though she had to wait nine months for her license — instead of up to six in the sector’s early days.
Speaking with DW, she noted that starting a business from scratch required “a lot of advice” which is why it is “very useful” to get this from other Lithuanian companies who have already “gone through the same kind of experiences.”
Agne Selemonaite echoes Dargyte’s view saying the small size of the capital Vilnius also allows for a good work-life balance.
Selemonaite is member of the board at fintech Payhawk, a Bulgaria-based platform for spending management that also has a license in Lithuania. She came back to her home country after having worked in the UK, Sweden and China for 15 years.
“Setting up here also makes sense as there’s still quite a large talent pool, which fintechs can tap into,” she told DW.
More growth is needed
But scaling up is an issue, even in Lithuania. The Baltic state has only three so-called unicorns, which are startups valued at more than $1 billion (€850 million).
Martynas Gruodis, policy analyst at the Vilnius-based Lithuanian Free Market Institute, says access to private and institutional capital is indeed a problem for startups, especially in early stages.
A 2025 tax reform, which raised corporate and personal income taxes, has further restricted the startups’ “ability to reinvest,” the economist explained.
“The government should also invest more in specific training, as additional qualified personnel will be needed — especially in the defense sector, which has a large potential for startups,” Gruodis told DW.
One of Lithuania’s most prominent startup success stories is Vinted, an online platform for second-hand clothes. Founded in 2008 by two Lithuanians, it became .
Last year, Vinted garnered revenues of €813 million and now has more than 2,000 employees and numerous offices across Europe.
Vinted Vice-President of Payments, Modestas Tursa, believes Lithuania still provides extraordinary conditions for innovative companies.
Speaking with DW, he said that Lithuania was “in many ways quite a new country” after it gained independence from the Soviet Union in 1990, and started “transitioning to a market economy.”
“So we had to build companies from scratch as opposed to some of the older, established market economies. That’s why there’s a hunger to build and innovate, and a remarkable ability to adapt to new technologies,” Tursa said, proudly adding that his company is currently in the process of setting up its own internal payment system called Vinted Pay.
Edited by: Uwe Hessler
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