Originally posted by LabsofLatvia here.
The Ministry of Economics (ME) hopes to double government support for startups in 2024 to €400,000. In return, the startup ecosystem promises specific, measurable results which will boost overall economic development.
Olga Barreto Goncalves, head of the Latvian startup association Startin.lv, explains that state support for implementing joint activities is currently distributed to six organisations in the startup sphere: Startin.lv; the largest technology and startup event organiser, TechChill; the Latvian Business Angel Network (LatBAN); the Latvian Private Equity and Venture Capital Association (LVCA); Riga Technical University (RTU); and startup support organisation TechHub Riga.
“We are the organisations which oversee all aspects of the industry. We work together to ensure that students catch the innovation bug. We work towards the development and visibility of existing startups, as well as attracting investors. And this requires financing. Furthermore, we don’t just ask for money; on our part, there is enormous focus on maximum returns and financial benefits to the Latvian economy,” emphasises Barreto Goncalves.
In 2022, Latvian startups attracted €93 million in investments and provided more than 3,200 jobs. In 2023, the six startup organisations have received €200,000 in state support to promote startups both in Latvia and abroad, as well as to promote the further development of the startup environment in Latvia in general.
On a development wave
The Strategy for Startup Ecosystem Development for 2022-2025 stipulates that total investment in startups should increase by €300 million by the end of 2025, while the number of people employed by startups should increase by 1,500.
Trends show that these figures are achievable:
- LV, LatBAN and LVCA, who receive state funding, have record-high membership levels;
- the TechChill conference, which brings overseas investors and media to Latvia, also recorded a record number of participants;
- the RTU Science and Innovation Centre has asserted itself as the heart of the science and science-based startup ecosystem this year;
- TechHub Riga is on the finishing straight with its Startup House;
- this year’s Latvian Startup Awards, which will now be organised annually, attracted unexpectedly large interest in Latvian startups from investors and the public.
- State support is used to organise these kinds of international-scale events, investor involvement sessions, startup training and similar activities.
Support is a significant prerequisite for economic growth
Minister of Economics Viktors Valainis is pleased to have successfully increased financing for the startup sector — which improves Latvia’s business culture by skillfully adapting to consumer needs and concentrating on sustainable business models, the circular and digital economy, industrial innovations and climate change goals — by 50%.
“Startups play an important role in the overall innovation ecosystem, both by bringing new business ideas into the local market and by skillfully demonstrating their ambitions on a global scale. This is why government support is such a crucial prerequisite of this economic growth, helping us to manufacture more products and services for export and recruiting high-level professionals from around the world, at the same time increasing the professional skills, competitiveness and income level of Latvians,” emphasises Valainis.
Financing available through various programmes
An additional €400,000 has been earmarked for startup support from next year’s state budget, reported Labs of Latvia. The 2025 and 2026 budgets will also require equivalent financing. The ME promises additional support over the next few years through various programmes allowing the businesses themselves to receive financing.
“Support programmes have been developed and confirmed for the 2021–2027 European Union fund planning period. Through these programmes, businesses including startups will be able to receive support. For example, to encourage the creation and development of new, innovative businesses with high growth and productivity potential in Latvia and promote new investment, a programme for venture capital investment in business has been approved. Total financing available through the programme is €93 million,” says Raimonds Lapiņš, Deputy State Secretary of the Ministry of Economics, as he reveals current support opportunities and future plans.
Applications will also open in November 2023 for a support programme for small and medium enterprises with the aim of providing access to financing for the implementation of business ideas through business incubators in order to develop entrepreneurship in Latvia, thus increasing exports for the supported businesses. €73.38 million will be available for this programme. “In addition the the aforementioned programmes, more than €100 million in support is currently available for the digital transformation of businesses, including startups: the purchase of new equipment, digitalising the business process, and training,” adds Lapiņš.
About the writer:
Written by Cyril Golub, a tech entrepreneur and venture capitalist awarded as the Latvian Business Angel of the Year 2022, who is known for his dedication to the development of Latvia’s startup ecosystem. He is the Chairman of the Latvian Business Angel Network (LatBAN) and a founding member at Lithuanian Business Angel Network (LitBAN) and Angels Band international network.
In addition to his role at LatBAN, Cyril is also an e-commerce sector expert at PeakSpan Capital, a venture fund based in New York, USA. He leverages his deep industry knowledge to identify promising software tech startups and provide strategic guidance to help them scale.
Cyril’s entrepreneurial journey began with Aheadworks, a software company he co-founded and led as CEO, until its successful exit in 2019. He has since dedicated himself to supporting the next generation of entrepreneurs through his involvement in various business angel associations, including LitBAN (Lithuania), EstBAN (Estonia), and Angels Band. Cyril has been working hard to promote the startup community in Latvia and other Baltic States, facilitate innovation, and promote the growth of the Latvian economy.
With his extensive network, industry expertise, and entrepreneurial spirit, Cyril is a sought-after speaker and mentor for aspiring founders and investors. He brings a wealth of knowledge and experience to every conversation, inspiring others to pursue their dreams and positively impact the world.