In 2024, startups in Riga attracted investments totalling €21.8 million and paid €62.6 million in taxes, a 13% increase compared to 2022, according to data compiled by the Latvian Startup Association "Startin.lv." According to Fredis Bikovs, Director of the Riga Investment and Tourism Agency (RITA), while the geopolitical situation has influenced the volume of investments attracted by startups, Riga has created a favourable environment and conditions for startups, which will continue to drive investment growth in the coming years. Investors are most interested in fintech, defence technology startups, and deep-tech companies specializing in science-intensive technologies.
Riga has been home to most startups that have been developing their business in Latvia for several years. The capital hosts 315 registered startups, with an additional 84 in the Riga Planning Region, making up 80% of all startups registered in Latvia. While startups in Riga represent various sectors, most are fintech, defence technology, and deep-tech companies.
As RITA Director Fredis Bikovs explains, attracting investments to the capital remains a priority for the startup sector:
"Startups drive Riga's economic growth and international competitiveness. That's why we actively work to develop the startup ecosystem, and over the years, we have created favourable conditions for entrepreneurship. We have launched three startup support programs and several initiatives, providing €795,000 in support to new entrepreneurs last year. Our support programs aim to foster startup growth, attract investments, and facilitate collaboration with international investors, positioning Riga as a dynamic technology and innovation hub in the Baltics and Europe."
Among the startups that secured the most significant investments for Riga last year were the nanocoating startup Naco Technologies, military technology company Origin Robotics, investment platform Mintos, fintech company Jeff App, and others. In terms of revenue, the top fintech companies last year included Sunfinance, Jeff App, and Setupad while leading deep-tech companies were Sonarworks, Longenesis, and Cellbox Labs. Atlas Aerospace, Brasa Defence Systems, and Origin Robotics generated the highest turnover in the defence technology sector.
"Riga is an attractive location for startups due to its excellent connectivity, international startup community, growing startup ecosystem, support programs, favourable tax environment, and highly skilled workforce. Due to the geopolitical situation, investors are increasingly interested in defence and dual-use technology startups, which develop solutions that can be used in both the military and civilian sectors. For example, uncrewed aerial vehicles can conduct reconnaissance and detect forest fires—one technology with two applications. Last year, the largest investment, amounting to €8.5 million, was secured by the defence technology startup Origin Robotics," explains Bikovs.
He adds that while the geopolitical situation impacts both the demand for specific technologies and the amount of attracted investments, an increase in investments is expected in the coming years.
"The three venture capital fund managers recently selected by ALTUM—BADideas.fund, Outlast Fund, and Buildit VC—along with a strong startup community, reasonable taxes, and available support programs, are the cornerstones of Riga's startup ecosystem. Over the next three years, they will help create new companies while increasing investment volume and the number of investments. It is important to emphasize that ALTUM's three venture capital fund managers have already started their work, supporting the early-stage startup sector. A total of €62 million will be invested in these early-stage startups,"
says Bikovs.