Unravelling the Secrets of Europe's Rising Innovation Hub


Lithuania has been quietly making a name for itself in the fintech space, with a surprising 263 financial technology companies based in a country of less than 3 million people. This shift began in 2022 when Revolut, a well-known UK fintech provider, chose Lithuania over the UK due to the complexities of Brexit. Revolut spokesperson Ieva Elvyra Kazakevičiōtė said the move was a strategic decision focused on customer satisfaction in light of Brexit uncertainty.

Diana Girdenyté from Invest Lithuania proudly points out that Lithuania is growing through emissions reductions and has become a global frontrunner. The first digital banking license in Europe has been obtained. With a user base of over 25 million people, the country secured 10th place in the world in the Global FinTech Index.

 Vilnius, the capital, gained recognition as the second most attractive medium-sized city for foreign investment, according to fDi's European Cities of the Future 2022 report. The influx of Belarusian companies seeking refuge and Lithuania's status as a haven for US startups are contributing to a thriving innovation environment.

In 2023, in Lithuania, three superpowers have risen: Vinted, Nord Security, and Baltic Classifieds. Group – each valued at over $1 billion. The country aims to position itself as a global leader in digital banking through a combination of flexible regulations, cutting-edge technology and affordable internet access.

Six years ago, there were only 82 fintech companies in Lithuania. Fast forward a couple years and that number increased to 263 in 2022. Half of these companies are homegrown, and their collective funding skyrocketed to €67.9 million ($72.7 million). Noteworthy is the international participation, with 33 companies from the UK, 16 from the U.S., and 8 from Estonia, primarily focusing on the payments sector.

The biggest question is whether Lithuania, a relatively small player, will continue to catch up. and major European cities such as Paris, Berlin, and Stockholm. Initiatives such as Tech Zity, a project to transform old textile factories into innovation centres, aim to improve Lithuania's reputation.

Minister Aušrinė Armonaitė reveals impressive growth in the tech sector, with its value multiplying 17 times in just three years. Lithuania currently boasts 1,000 tech startups, making it the second-largest growth hub in Europe.

Lithuania is diversifying beyond fintech into biotechnology and health sciences, represented by companies such as Kilo Health. The company has 800 employees, sales of more than 230 million, and has tax benefits and a qualified workforce. Lithuania currently ranks eighth in tax competitiveness within the OECD, trailing previous leader Estonia.

Despite its ambitious growth, Lithuania faces uncertainties such as the ongoing war in Ukraine, Language complexity and geographical factors further add layers of complexity to its journey.

As Lithuania continues to develop, the road ahead promises both challenges and triumphs. Stay tuned for more updates on this unexpected fintech powerhouse.