Deep Dive: What makes Latvia’s startup world tick
With a population of just under two million, Latvia may be one of the smaller countries in Europe, but its innovative strength is impressive even within Europe. The capital city of Riga in particular has developed into a dynamic center for startups in recent years, impressing with its creativity, technological expertise and international network.
Despite its manageable size, the Latvian startup scene offers a remarkable variety of young companies that want to conquer global markets with fresh ideas. Trending Topics gained an insight into Riga’s startup ecosystem during a media tour organized by the local agency TrueSix.
Latvia is “Smart, Digital, Green”
Although the Latvian startups are very diverse, they have one thing in common: the majority of them were focused on an international presence from the outset. “We are a small country, which is why it is very important that we have international access. Latvia has an innovation scene that is characterized by creativity, business friendliness and easy access to the European market. More than 90 percent of the population speaks English and our founders know that they can only grow if they think beyond our borders,” explained Agnese Oļševska, Deputy Director for Innovation at LIAA, the Latvian Investment and Development Agency.
In order to stand out internationally, Latvia is focusing on the basic principles of “Smart, Digital, Green” in the area of innovation. According to the LIAA, many public services are digital. Smart energy and biomedicine are also major priorities in the country’s policy. DefenseTech has also become important for the EU and NATO member since the start of the war in Ukraine.
“Diverse and innovative startup scene”
“A diverse and innovative startup scene has emerged in this biotope. At the end of 2024, we counted a total of 513 startups,” says Oļševska. The biggest vertical these days, as in many other countries, is AI. The DeepTech, HealthTech, Fintech and IoT sectors are also strongly represented. Latvian startups have also already raised large amounts of growth capital.
Latvia received its first unicorn in 2021 with Printful. The scale-up is a print-on-demand provider that allows customers to create printed products for online retail. Last year, Printful completed a merger with its biggest rival Printify.
Latvia could also have a DeepTech unicorn in the future, as the young company Aerones is well on its way to a billion-dollar-valuation. The scale-up, which aims to revolutionize the maintenance of wind turbines, recently raised 62 million dollars in a financing round.
TestDevLab is international software testing champion
Another company that has been around for almost 15 years but is still full of startup spirit is TestDevLab, which we were able to visit during the media tour. This company specializes in quality testing for software. TestDevLab carries out various stress tests to ensure that all software functions work properly. The two founders, Andrejs Frišfelds and Ervins Grīnfelds, both previously worked at Skype. Skype was also one of the company’s first customers after it was launched in 2011. The two founders already had strong international contacts due to their previous work, which still has an impact on TestDevLab’s approach today.
“We have always had an international approach. For example, we offer courses for companies, mainly remotely and in English. Representatives of software companies from all over the world attend them,” explained Josh Griffiths, Digital Marketing Manager at TestDevLab, during our visit. According to him, the company has outgrown its status as a start-up, but the startup spirit is still there.
“We still have the mentality of a startup and employ a very young team. Many of our customers are also start-ups. They know that we understand their challenges and concerns,” says Griffiths. Another remarkable thing about TestDevLab is that the company is still financed by bootstrapping.
The Startup House Riga and its young companies
However, many more exciting startups have also made their debut in Riga in recent years. Many of them can be found in the Startup House, a coworking and event space in the heart of the city. The institution was co-founded by Janis Berdigans, co-founder of Printify. We were able to meet some of the young companies based there.
RivalSense
One of these start-ups is RivalSense. This startup offers its customers an overview of the activities of certain companies. Among other things, this should provide them with important information about the competition. The start-up’s AI connects to more than 80 sources to provide deep insights into companies in areas such as cyber, AI, hardware, healthcare, biotechnology, enterprise software and more.
Trace.Space
Trace.Space aims to revolutionize mechanical engineering with AI. The startup offers an AI-powered manufacturing system for complex hardware specifications that aims to cut research and development costs in half.
Monetizr
Monetizr brings brands into mobile games. The start-up helps brands to cleverly position themselves in such games, for example through in-game rewards that players can unlock by watching advertisements.
Convershake
Convershake wants to rethink call centers with artificial intelligence. The startup’s AI co-pilot is designed to support employees in their work. This should significantly reduce processing time and work after calls.
Adsmom
Adsmom focuses specifically on the field of advertising. The startup uses AI to analyze data on advertisements from specific companies. Similar to RivalSense, this service is designed to provide an overview of competitors’ activities, among other things.
StartSchool
The Startup House also offers StartSchool training for prospective founders. In a 12-month full-time program, they learn the basics of full-stack development as well as practical business knowledge so that they can found their own startup or develop their own tech products.
AI boom has also reached Latvia
It was apparent that the AI boom is in full swing in Riga. A large part of the local startup scene has already been working on the topic of AI and many have made the technology the focus of their activities. The founders of the young companies also all have in common that their ambitions extend beyond national borders. “We focused on the international market right from the start. Latvia is a small country, and a startup can only grow to a certain point here before it has to expand,” said Martins Vaivars, co-founder and CEO of RivalSense.
The international approach is already evident in the fact that the founders and their startups speak a lot of English. “Latvian is a language that relatively few people speak. It therefore makes sense for startups to focus on the English-speaking market right from the early stages. Internationalization is therefore obvious from the outset,” says Kristians Jenciuss, CEO of Startup House.
Riga showcases a diverse and collaborative innovation scene
Apart from the Startup House, we were also able to get to know some examples of the Latvian innovation scene on the media tour. One example of this was the local card production facility of the Finnish IT group Tietoevry. Here we were able to observe the personalization of bank and credit cards from various banks. This takes place under the highest security precautions. Every corner of production must be monitored by cameras at all times. Tietoevry relies heavily on automation. We were able to observe machines that personalize cards, encode chips and even insert them into envelopes in which they are delivered to customers.
We also visited the Draugiem Group, a local tech umbrella organization. It includes subsidiaries such as Mapon, a provider of fleet management and asset tracking solutions. Another Draugiem subsidiary is Idea Lights, a provider of smart lighting systems that can, among other things, adjust the light intensity depending on the situation.
Another general impression that emerged during the media tour in Riga is that the innovation scene there is very collaborative. Founders usually know each other directly or through one or two corners. Startups say they interact a lot with each other and often have a friendly relationship. The visit to Riga showed that even a small country can show entrepreneurial ambitions. With a clear international focus, smart technology and community spirit, the startup scene in Riga shows how big ideas can come from a small country.
