In order to accurately quantify the sector’s successes so far, Invest Lithuania and Rise Vilnius conducted a detailed survey of the companies present in Lithuania at the end of 2018. This research has highlighted a number of important characteristics of Lithuania’s Fintech ecosystem and point towards some trends going forward.
The first striking feature of Lithuania’s Fintech sector that the research highlights is its sheer scale. In 2018, the number of companies present rose from 117 to 170, and there are now around 2,600 specialists employed in the industry. The Bank of Lithuania has now issued 3 Specialised Banking Licences (SPBs), 33 Payment Institution licences (PIs) and a massive 47 Electronic Money Institution licences (EMIs). To put this into context, Luxembourg, also regarded as a Fintech hub, has issued 7 EMIs. The highest profile companies to receive licences in 2018 were UK-based Revolut, a Fintech valued at €1.6 billion, and Google. The Bank of Lithuania issued Revolut with both a Specialised Banking License and an Electronic Money Institution License for use across the EU, while Google Payment Lithuania, part of Alphabet Inc., received an Electronic Money Institution License.
As the sector is growing, it is also diversifying, with a wide range of company types and business models in evidence. The survey found that the most common type of service offered by Fintechs in Lithuania is payments, with banking and lending growing rapidly. In terms of business size, the majority of Lithuania-based Fintechs are small or medium-sized, although there are some big-hitters: 8% of the companies present have between 50 and 249 staff.
The survey also reveals that the sector is highly international. 30% of all the Fintechs operating in Lithuania are headquartered abroad: Fintechs from the US, the UK, China, Singapore, and Israel all have important teams in Lithuania. And the international flavour of the sector is reflected in the markets that companies are targeting. As licenses issued in Lithuania are suitable for use across the EU, naturally Europe constitutes the most popular target market. But the survey has also revealed that Fintechs in Lithuania have global ambitions – 37% of those surveyed aim to expand in Asia, while over a quarter are targeting North America.
With 88% of survey participants stating that they plan to expand their team this year, plus the prospect of more companies arriving, 2019 is set to be another year of growth and diversification for Fintech in Lithuania. With the Bank of Lithuania offering arguably the most Fintech-friendly regulatory environment in the EU, and the sector gathering momentum with every new arrival, the conditions are ripe for growth-driven innovative and transparent Fintechs to flourish.