A new report published by Swedbank Latvia on July 24 states that one in five new Latvian startup companies is part of the financial technology, or fintech, sector.
To boost the sector, Swedbank Latvia has partnered with the Latvian Startup association and as the results of the cooperation released last week the first-ever thorough report on Latvian fintech. It surveys active fintech companies registered in Latvia and offers a view of the fintech landscape.
The report says fintech startups are playing an increasingly important role: the Latvian startup ecosystem consists of 450-500 startups, of which 91 work directly with products and services in the fintech segment.
Of the 91 active fintech companies currently registered in Latvia, most are operating in the B2B (business-to-business) sector. Europe is the key market for 89% of companies that participated in the survey and almost half of the surveyed companies say that it is easy to establish a startup in Latvia and the local ecosystem is business-friendly.
However, attracting talent from abroad is a challenge and providing a startup visa is important for the industry. The report shows that 40% of startups based in Latvia have international teams and the gender balance at the management level in Latvia is higher than elsewhere in Europe. 57% of companies have female executives in the management structure.
Despite the situation with COVID-19, most of the surveyed startups are planning significant growth, and 88% plan to attract new employees in the near future.
“In a very short time, Latvia has built a large talent pool of world-class experts in both finance and innovation, and over time, as the borders of traditional industries became too narrow, they have gone further to build companies around finance and technologies,” said Ģirts Berzins, head of innovation at Swedbank Latvia.
The finance industry in Latvia in general, and its capital Riga in particular, has been traditionally strong for at least the last decade. Finance services consistently rank among the leading service export areas in the Baltic region, which has seen a recent meteoric rise of the IT sector.
The talent pool in both sectors, helped by Latvia’s advantageous geographic location and local innovation infrastructure, has benefited the growth spurt of fintech startups. Fintech so far is the strongest startup sector in the country, with a wide scope of players from crypto hardware giants to small payments services.