For anybody thinking of starting a fintech business in Vilnius, the city is well-placed to provide networking and support. “Lithuania offers great conditions to get businesses up and running,” Bačiulienė says. “The government is supporting startups via investment funds, grants and acceleration programmes. Additionally, there are opportunities to participate in competitions, crowdfunding, and applying for venture capital funds.”
The city has a fintech co-working hub called Rockit Vilnius that serves as a meeting place for entrepreneurs and innovators. The country’s fintech sector is represented by two different associations – Fintech Hub LT and Fintech Lithuania – and there is ample opportunity around Vilnius for people to network and share knowledge. For busy professionals shuttling in or out of the city, it is possible to get from central Vilnius to the airport gate in close to 30 minutes.
“Numerous businesses are willing to share their experience in various events – meetups, hackathons, discussions,” says Bankera’s Vytautas Karalevičius. “A significant concentration of VC funds and accelerators makes it easy to start new businesses. Local organisations, such as Infobalt and Fintech Hub, are contributing to the expansion of the market, while public institutions, such as the Bank of Lithuania and Ministry of Finance, are also fintech-friendly.”
Smaller cities face a fiercer fight for top talent
Despite the positives, there are still things that Karalevičius would like to see improved in order for Vilnius to really consolidate its position as a fintech hotspot. “Even though operating in Vilnius helps us stay in the middle of the high-quality job market, the competition for employees is fierce, and the lack of talent is critical,” he says.
“Tech companies and their talent acquisition teams work tirelessly to keep their employees happy and potential employees interested in their companies. The competition for new talent raises salaries to such levels that the city loses one of its competitive advantages – workforce affordability. We hope that the government, universities and businesses will join forces and do what is possible to increase the supply of skilled workers.
“What is more, public institutions are often unable to compete with the ever-growing businesses in terms of salary expectations. Consequently, the most talented professionals are working in the private sector. Thus, governmental institutions can only offer limited knowledge and resources when it comes to supporting young fintech companies in the development of their businesses.”
Will fintechs inevitably move out of Lithuania?
A common theme running through our Fintech Frontiers series will be whether smaller tech hubs can realistically hold on to their most successful startups. Is it inevitable that, once a company scales, it will have ambitions that Vilnius just cannot match?
One such company that relocated is Ondato, a KYC compliance provider founded in Vilnius in 2018. Its Co-founder and CEO, Liudas Kanapienis, explains: “We decided to relocate our headquarters to the UK for a number of reasons. First, we wanted to put more of our attention on the market in the UK which, despite Brexit, is still the financial hub of Europe. The relocation of our headquarters also helped in attracting new team members. All this has helped us achieve a greater level of market penetration. Second, the regulatory environment is favourable for new business startups and VCs. Lithuania lags behind in this perspective; its legislative framework is not as flexible for attracting investments from VCs.”
Invest Lithuania tells us that new fintech guidelines are currently being created by both public and private stakeholders to make it easier for fintechs to navigate the regulatory environment. It adds that the Bank of Lithuania regularly facilitates direct consultations, has set up a regulatory sandbox for fintechs, and was responsible for establishing an international-grade AML Centre that boosted Lithuania’s fintech economy.
For Bankera, the plan is less about relocating and more about expanding, as Karalevičius explains: “Our organisation has been operating with a different fintech project in Vilnius for almost a decade, and we do not plan to relocate anywhere in the foreseeable future. As opposed to relocating, we expanded into different countries. We currently have offices or at least a fraction of our workforce not only in Vilnius but in the second-largest Lithuanian city, Kaunas, and other countries – Estonia, Spain, Monaco, and South Korea.”
Credit: Source link
