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Why Lithuania is a hidden gem of Europe’s startup ecosystem

Why Lithuania is a hidden gem of Europe’s startup ecosystem


In 2022, over 20,000 Lithuanians returned to their country of birth from abroad. A high quality of life coupled with a booming entrepreneurial ecosystem and a collaborative mentality has contributed to what investors are calling a “reverse brain drain.” Many of their minds reemerge in the country’s startup scene.

It was on a visit to Lisbon that I first heard someone refer to Lithuania as “a hidden gem” of Europe’s startup ecosystem. A recent trip to Vilnius convinced me they were right.

To further drive the inspiring transformation it has achieved since regaining its independence from the Soviet Union in 1990, Lithuania has been betting heavily on its homegrown tech startups.

Already home to three high-profile unicorns — online marketplace Vinted, VPN leader NordSecurity, and ad firm BCG — Lithuania is the fastest-growing ecosystem in the Baltics and Central and Eastern Europe (CEE) region.  Last year, it reached €13.7bn in enterprise value last year, following a seven-fold growth between 2018 and 2023.

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Housing nearly 900 startups, Vilnius alone accounted for 91% of the total value. Startups in the capital city raised 96% of the total funding (€281mn), enabling Lithuania to become the second biggest VC investment destination in Central and Eastern Europe, after Estonia.

“Lithuania is a startup itself.

Vilnius is also building Europe’s largest tech campus, set to open later this year.

But what lies behind the country’s exponential growth? I met with various ecosystem players to find out.

A startup (-friendly) mentality

Lithuania is “a startup itself compared to big countries,” according to Karolis Žemaitis, the country’s Vice Minister of Economy and Innovation.

“Because we don’t have that many resources and we don’t have that many people, we need to act on this mentality to be able to compete,” he explains.

This has fostered a risk-taking, make-do-with-less mindset, which is also reflected in the mentality of the startup ecosystem. “We have to be faster, we have to be bolder in some cases, and we have to be more adaptive to the global changes that are happening,” Žemaitis says.

This has built ecosystem resilience — a virtue of Lithuania not only throughout the era of the Soviet occupation, but also through its political and economic reinvention since the 1990s.

Karolis Zemaitis, Vice Minister of Economy and Innovation, Lithuania