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Lithuanian Startup Ecosystem: Insights from 2023

Lithuanian Startup Ecosystem: Insights from 2023

In 2023, the Lithuanian startup landscape saw a surge in average investment, reaching an impressive EUR 10 million, according to data compiled by Unicorns Lithuania, a pivotal association within the country’s tech ecosystem. Although the total investment in Lithuanian startups for the year amounted to EUR 272 million, it marked a 7% decrease compared to the preceding year of 2022.

“Last year was a challenging yet defining period for startups globally. Our focus wasn’t solely on securing investments; it was about fostering sustainable growth, enhancing profitability, and nurturing top-tier talent,” expressed Inga Langaitė, CEO of the association. Notably, only three countries in Europe, including Lithuania, experienced a rise in startup investments by September 2023, as highlighted by researchers at the venture capital company Atomico.

In the photo Inga Langaitė

The substantial investment figures were significantly influenced by the remarkable achievements of two standout startups – cybersecurity startups Nord Security and Surfshark, along with solar park design software leader PVcase, each securing an impressive EUR 100 million. Nord Security and Surfshark witnessed their valuations doubling to €3 billion in 2023 compared to the previous year. Furthermore, PVcase expanded its operations by acquiring Anderson Optimisation, a successful US company.

A notable mention goes to CAST AI, which secured two major investments totaling USD 55 million and USD 20 million in 2023. Despite their founders not being Lithuanian, their close ties with Lithuania, establishing a workforce in Vilnius, and contributing taxes to the country’s economy were noteworthy.

Reflecting on the investment trends, Langaitė highlighted that while the world witnesses a surge in AI startups, Lithuania’s largest investments were in sectors spanning cybersecurity, energy, medicine, finance, and biotechnology. This diversity underscores the versatility of the startup ecosystem, catering to varied investor interests.

The top 10 startups that attracted significant investments in Lithuania in 2023 were:

  1. Nord Security – USD 100 million
  2. PVcase – USD 100 million
  3. CAST AI – USD 55 million
  4. Sentante – USD 6.5 million
  5. GenusAI – USD 6 million
  6. Atrandi Biosciences – USD 4.8 million
  7. Oxipit – USD 3.8 million
  8. Heavy Finance – USD 3.3 million
  9. GoRamp – USD 3 million
  10. Inbalance Grid – USD 2 million

Looking ahead to the investment landscape in 2024, Langaitė predicts a focus on efficiency among Lithuanian startups. She noted an increase in startups operating profitably even at early stages, with investor attention shifting towards profitability rather than sheer growth.

Langaitė emphasized key factors vital for attracting investment in startups, including agility in meeting market demands, acquiring, and retaining top talent, innovative technological solutions, and optimizing operational processes. Additionally, a transparent and motivating tax environment contributes significantly to Lithuania’s competitiveness within the region.

The cumulative investment in Lithuanian startups tells an intriguing story: EUR 293 million in 2022, EUR 429 million in 2021 (which notably includes EUR 250 million for Vinted), EUR 43 million in 2020, and EUR 170 million in 2019. Noteworthy is the average investment, reaching €8 million in 2022 and €7 million in 2021. According to Dealroom’s estimates, the current valuation of the Lithuanian startup ecosystem stands at EUR 9.5 billion.

The venture capital firm Atomico predicted that venture capital investment raised by European startups should almost halve in 2023 to €45 billion compared to €82 billion in 2022. Researchers noted that Lithuania, Romania, and Luxembourg emerged as the only countries witnessing a rise in startup investments by September 2023.