When the Saeima adopted the Startup Activity Support Law, one of the goals set was to create an ecosystem that would make Latvia the No. 1 choice in the Baltics for startup founders, reminds the report by the Ministry of Economics, which is being reviewed by the government today. After almost eight years of the law being in force, it does not appear that this goal has been achieved. However, industry experts say that “things are not actually that bad.”
When assessing the number of startups in the Baltic states, Latvia lags significantly not only behind the more populous Lithuania, but also behind the smaller Estonia. Thus, according to publicly available information, Estonia has more than 1,300 startups, Lithuania more than 1,100, while Latvia has more than 600 startups. “Objectively speaking, looking at the figures and statistics, this goal has not been achieved by 100 percent. However, if we look at what is happening in our sector – the number of companies is increasing and they are developing – things are not actually that bad,” says www.Labsoflatvia.lv editor Anda Asere.
According to the www.Startin.lv database, in the period from 31 December 2023 to 31 December 2024, the number of startups grew on average by 14% based on aggregate accounting data.
Growth is also evidenced, among other things, by the fact that Latvian startups are able to attract significant investment. For example, on 6 August the biotechnology startup Cellbox Labs announced that it had raised 3.3 million euros, while on 1 August the Latvian biometrics technology startup Handwave raised 4.2 million US dollars. The largest funding in the Baltics this year has also been raised by the Latvian wind energy robotics startup Aerones. At the beginning of June it announced a 62 million US dollar raise.
According to information provided by http://www.Startin.LV, over the last 10 years Latvian startups have raised 620 million euros.
Another target was to support at least 20 startups per year. And this goal has been achieved by the program: since the law came into force, 168 startups out of the 235 that applied have received support.
When the law was adopted, support programs were created that provided for a fixed minimum payment for each employee and the attraction of highly qualified employees. Within the framework of these programs, 168 startups received support worth 10.33 million euros, of which 3.15 million was allocated to attracting qualified employees.
It is also pleasing to learn that startups not only receive state support, but are paying more and more taxes into the state budget. Thus, in 2023 they paid 71.4 million euros in taxes, which is 15.5% more than in 2022.
The majority of the startups that requested state support operate in the IT sector – 69%, only 5% of companies are engaged in experimental development in the natural sciences and engineering, and 2.6% in the manufacture of electromedical and electrotherapy equipment. The share of startups from other sectors ranges from two to one percent. Moreover, this percentage breakdown has remained unchanged since the introduction of the support programs in 2017.
Interestingly, of the 111 companies that received state support and for which the support period has ended, only three have been liquidated.
Originally published at https://inc-baltics.com/startapu-skaits-aug-bet-nepietiekami-atri-merka-sasniegsanai/
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