The latest startup report: a record year and accelerating flywheel effect

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Over the last eleven years, the value of startups in Central and Eastern Europe has increased 19 times and now stands at 186 billion euros. The value will likely increase even further by the end of this year. These findings were presented in the latest’s report on Central and Eastern European startups, prepared together with the venture capital fund Atomico and in partnership with Google for Startups.

The report shows that the first ten months of this year were record-breaking: the region added the highest number of unicorns than at any point in the last decade, and startups in Central and Eastern Europe managed to raise as much as 4 billion euros.


Among the twenty countries reviewed, the Baltic states stand out significantly. This year startups from Lithuania managed to attract 504 million, from Latvia – 175 million, and from Estonia – as much as 1.07 billion euros in funding. The total valuation of startups in the Baltics has increased more than tenfold since 2010, from 4.1 billion to more than 43 billion euros.

Notable flywheel effect

Analysts claim that the record-breaking results in the Baltic states and the broader region were achieved due to the so-called flywheel effect – mature, well-established, and successful startups have been a driving force to younger startups.


‘What has been achieved this year, is not a one-day success, rather it’s a result of long-term work which began in the twentieth century. There were six unicorns in the whole of Central and Eastern Europe in 2015. Today there are 34, nine of which are in the Baltics. These unicorns are built on the foundational ecosystem work done by the first wave of unicorns.

The fast-growing, already established startups not only scale, but also grow talent, attract the attention of global investors, form the basis for the development of local venture capital funds, eventually start investing themselves, thus cultivating the entire country’s ecosystem. This flywheel effect is very visible in Estonia — the history of Skype initially gave impetus to Wise, then to Bolt and Pipedrive, and to many more in the next cohort to come’, says Andreas Helbig, Senior Associate at Atomico.

Andreas Helbig, Senior Associate at Atomico

He notes that there has been a steady increase of international investors who choose to invest in startups in Central and Eastern Europe. As much as 90 percent of capital raised by startups in recent years is from investors abroad.

Baltic startups are leading in attracting investments

The report has shown that startups in the Baltic States are very successful in attracting large amounts of investment from venture capital funds. Estonia is the absolute leader in Central and Eastern Europe. Over the past seven years, startups in this country have attracted 2.62 billion euros from venture capital funds. This translates into almost 2000 euros per capita – the most investment per capita in Europe.


Since 2015 Lithuanian startups have raised 1 billion euros from venture capital funds, Latvian -323 million.

A Google representative explained why external capital is so important to startups, especially when speaking about the future development of the whole ecosystem.


`The start-up ecosystem of the Baltic states has all the conditions to expect further growth. The Baltic startups are ambitious, global, technologically advanced, and their growth trajectories are likely to attract more and more attention from global venture capital funds.

Audrius Janulis, Google’s Export and Startup Industry Manager in the Baltics

We have also seen many success stories of Baltic startups which achieved significant growth without external funding. However, the solid investment provides the opportunity to compete for consumers from around the world and aim for leading positions in respective fields. Usually, with external capital, startups can intensify their marketing efforts, acquire new customers and attract talented employees, which means that growth rates and billion-dollar valuations are reached faster’, says Audrius Janulis, Google’s Export and Startup Industry Manager in the Baltics.


The report of startups in Central and Eastern Europe was prepared by the Amsterdam-based company It analyzed investments in startups from Central and Eastern Europe, as well as growth trends in the startup ecosystem. The research was prepared together with the venture capital fund Atomico and in partnership with Google for Startups.

This report will be presented in more detail at a special event on October 28 at 12 noon by representatives from Google for Startups, Atomico and Printify.

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