Despite headwinds, Lithuania’s fintech sector remains resilient

A regulatory environment conducive to the development of the fintech industry, and ongoing dialogue between market players and institutions has helped Lithuania sustain its position as a fintech hub.

Lithuania’s financial technology sector remains robust and forward-moving, affirming its place as a key hub for fintech innovation in Europe.

A recent report by the country’s investment promotion agency, Invest Lithuania, highlights the sector’s continued development in the country throughout 2023, despite a challenging economic landscape worldwide.

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Even as global fintech funding has dipped to its lowest point in seven years, the Lithuanian sector has maintained its ability to attract investors. This resilience underscores Lithuania’s commitment to fostering a welcoming and supportive environment for financial technology companies.

There has been no shortage of investment. TransferGo, a global money transfer service with operations in London and Vilnius, the Lithuanian capital, recently announced a successful 10 million US dollars investment funding round, a sign of the sector’s health and future prospects.

“This investment…reinforces Lithuania’s position as a thriving centre for fintech,” says Daumantas Dvilinskas, co-founder and CEO of TransferGo.

Several other enterprises in the sector have also secured significant funding in recent months.

For example, the Lithuania-based HeavyFinance, a platform focused on providing sustainable financing solutions for the agricultural industry, recently raised a 50 million euros fund aimed at promoting sustainable practices.

In a similar vein, Axiology’s recent two million euros funding announcement for establishing a fully functional compliance infrastructure further solidifies Lithuania’s presence in Europe’s fintech scene.

Drivers of fintech success

As one of the leading revenue generators in Lithuania’s fintech sector, ConnectPay, a Vilnius-based all-in-one financial platform for online businesses, has an inside perspective on the country’s attractiveness as a fintech hub.

Marius Galdikas, ConnectPay’s CEO, attributes the recent surge in investments within the Lithuanian fintech sector to a combination of factors beyond its welcoming regulatory framework.

“Lithuania’s strategic approach to nurturing fintech is not just about having a receptive regulatory environment, but also about the collaborative culture and the highly skilled talent pool that we enjoy here,” says Galdikas.

Such support is exemplified by the Newcomer Programme, facilitated by the Bank of Lithuania, which offers guidance to new market participants, smoothing their entry into the sector.

Additionally, the association Fintech Hub LT, where Galdikas serves as a board member, plays a pivotal role in the sector’s growth, promoting collaboration, sharing insights, and fostering a community that can proactively address upcoming challenges and opportunities.

“Dialogue between marketplayers and institutions like the Bank of Lithuania, and the government’s clear vision for innovation are key elements that make this market attractive to investors and new entrants,” adds Galdikas.

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