Latvia has barely 1.9 million inhabitants, but that’s not a disadvantage for the tech companies in the capital Riga. On the contrary: a strong network, government support based on trust, and an unrelenting international focus from day one ensure that startups can conquer the European and American markets. Anyone starting a business in Latvia has an international mindset from day one. Why is that, and what can the rest of the EU learn from it?
It couldn’t be more cinematic. On the first floor of the Startup House in Riga, Martins Bratuskins relaxes comfortably in a beanbag. From underneath his green cap, he looks at the laptop on his lap. Bratuskins jumps up as we walk into his small office in a converted and renovated warehouse, ready to talk about Monetizr: the startup he founded.
EU Inc.?
“Monetizr is officially an American company,” he says. “We started as a Delaware Incorporated company. It’s just a convenient entity that allows us to do business across the US. In practice, we’re all based in Latvia.”
Monetizr is a platform that enables tailored advertising in mobile games. On the shelf behind Bratuskins are items like toilet paper and dishwashing pods: so-called Tide Pods from Procter & Gamble. That company is just one of Monetizr’s American clients, where Bratuskins seems to have little trouble attracting customers as a Latvian.
A pan-European equivalent of a Delaware Inc. entity would be a good thing if done right.
Martins Bratuskins, founder of Monetizr
“Actually, the European market is more complex. A pan-European equivalent of a Delaware Inc. entity would be a good thing if done right,” he muses. “An EU.inc, for example.”
No Baltic business model
Bratuskins is not the only one in the Startup House who regards the entire EU or US as a market. On the contrary. All the desks and offices in the trendy building next to Riga’s large covered market are filled with startups with an international vision. Kristians Lancmanis of Adsmom laughs. “Of course, everyone has a European focus from the start. The Latvian market is just too small.”
He wants his startup to appeal to organizations worldwide with an API-based tool that can easily and accurately track investments in social media advertising. This way, companies can keep an eye on their competitors, but the tool can also provide insights into political ads. “We wouldn’t have a business model only in Latvia”, Lancmanis realizes. Regarding political ads, Adsmom faces a hurdle: Meta recently announced it would no longer allow such ads in the EU.
Start-ups vs. Microsoft
Martins Spilners knows this too. He is working on BirdyChat. This communication tool aims to combine the ease of use of WhatsApp or Signal with a more professional approach like Teams or Slack. Spilners hopes that freelancers and employees across Europe will soon move their numerous business conversations from WhatsApp to his application.
“We do plan to launch in Latvia by the end of this year”, he says. “But a European rollout will follow a few months later. Hopefully, that will happen by the end of this year.”
Spilners is not afraid to compete with major American players, including Microsoft with Teams. Emils Vavere of Convershake shares that sentiment. He implements language models for call centers, focusing on small languages and specialized subjects. Microsoft recently announced its intention to play a larger role in developing LLMs for smaller EU languages, but Convershake expects to serve a valuable niche from Riga.
Targeted support
In the Latvian capital, startups can count on support. That support comes primarily from LIAA: the Latvian Investment and Development Agency. LIAA’s headquarters are a twenty-minute walk away, in a building erected by the Soviets during the Latvian occupation.
Walking in, we feel like we’re in a movie for the second time. The entrance hall has been renovated into a modern and impressive space, atmospherically lit and featuring the agency’s logo. It wouldn’t look out of place in a spy thriller’s setting.
“We try to remove the Soviet memory from the building floor by floor”, laughs Deputy Director For Innovation Agnese Olsevska as she leads us to a rather bare meeting room. There, she reveals some of Latvia’s strengths.
English as a second language
“Latvia is a small country”, she says. “So we need to be smart, green, and digital. We have only 1.9 million inhabitants, but we are well connected to the rest of the world. Moreover, more than 90 percent of our population between 25 and 35 speaks fluent English. Nobody outside Latvia speaks Latvian, so we know we need to learn new languages.”
For Latvia, the omnipresence of English is less self-evident than in, say, Belgium or the Netherlands. Although Dutch is also not a major language, the US and English have exerted their influence for many decades. The Latvians lived under the yoke of the Soviet Union, making Russian the de facto second language of the older generation. That English is now taking that place is just one of many illustrations of the future the country wants to realize for itself.
Technology is a focus area for LIAA. The agency supports Latvian startups at all stages of their development. “Founders can come for help as soon as they have an idea”, Olsevska explains. “Latvia has 513 startups and is particularly strong in AI, Deep Tech, Health Tech, Fintech, and IoT.”
Digital Business Climate
Government support is primarily, but not exclusively, financial. LIAA and the government attach great importance to creating a favorable business climate. “91 percent of government services are fully digitally available”, Olsevska illustrates. “This way, you can not only establish a company digitally but also apply for support.”
This claim is supported by impressive figures. In the 2025 eGovernment Benchmark, Latvia scores extremely high with 96 out of 100 regarding the digitization of public services for businesses.
That’s noticeable. “It’s really easy to start a business in Latvia”, says Ervins Grinfelds at the entrance of the stately office of TestDevLab. He founded the company and moved the headquarters a few months ago to the beautiful former gymnasium in the center of Riga.
It’s really easy to start a business in Latvia; you can do everything from your laptop.
Ervins Grinfelds, co-founder of TestDevLab
“You can do everything from your laptop”, he continues. “The support from LIAA at the start is phenomenal. Once the company is running, the tax system is also stimulating. We don’t pay taxes on reinvested profits. In the meantime, we’ve opened offices in Estonia, Lithuania, Spain, and North Macedonia, so I can compare. It’s really good to start here.”
Success in the US
TestDevLab has been around since 2011 and is no longer a startup. The company employs over 500 people, about two hundred of whom are affiliated with the Riga office. Grinfelds’ company specializes in quality testing, including software and applications, as the name suggests. Zoom is the most well-known client, although reading between the lines and NDA’s we learn that there are few popular meeting applications that haven’t been subjected to TestDevLab’s tests.
TestDevLab is one of the success stories that show that having a headquarters in Latvia doesn’t hinder international connections. According to Grinfelds, it can even be an advantage: “Thanks to the time zone difference, American clients can have their code tested by us when their workday is over.”
Just call me Martin
Of course, there are also disadvantages. Back at the Startup House, Martins Vaivars of RivalSense is pragmatic about that. His company develops software that allows CEOs to monitor the operations of other companies through automatically generated reports.
In the US, I’m not Martins, but just Martin.
Martins Vaivars of RivalSense
“There’s definitely a market for that in the US”, notes Vaivars. “They’re more inclined to spend money on software there, but it’s not always easy to sell as a Latvian. In the US, I’m not Martins, but just Martin. That helps.”
Help from RITA
Leaving Riga for a life in the US is not on the table for most. Serving the European and American markets works fine from Latvia, and specifically for startups, there are additional advantages, such as RITA.
RITA stands for Riga Investment and Tourism Agency. The agency complements LIAA but from the city’s perspective. “There aren’t many countries or cities with a similar organization aimed at supporting local startups”, says Ieva Felman, Senior Startup Ecosystem Project Manager at Business Riga, part of RITA.
Trust over bureaucracy
RITA supports the startup ecosystem in the city with financial grants. “We allocate funds to projects objectively based on a points system”, Felman clarifies. “For example, we sponsor the operation of the Startup House because their application convinced us.”
Once the money is distributed, RITA expects a certain form of reporting, but the administrative requirements remain deliberately limited. “Trust is essential. There’s no reason to overregulate”, Felman believes.
Trust is essential. There’s no reason to overregulate.
Ieva Felman, RITA
Felman herself comes from the startup world and is now committed to supporting it. This is quite common in Latvia. The Startup House enjoys sponsorship from successful founders of various companies, including Latvia’s only unicorn, Printful. Those who succeed in Latvia rarely seem inclined to leave.
Office garages
We head to the outskirts of Riga to a building that once served as a parking lot for city service vehicles but has now been converted into the headquarters of the Draugiem Group. Around the courtyard, the former garages have been transformed into offices for various companies that are part of the group.
The group originated from the social network Draugiem, which connected all of Latvia digitally before Facebook’s arrival and is still popular today. Draugiem Group has since evolved into a holding company reminiscent of Norway’s Visma. The group has innovative but largely independent companies under its wings, which have the space to grow but also learn from each other.
Own servers
The globally popular DeskTime, which tracks how teleworkers are productive on their computers, has its headquarters in the Draugiem building. The same goes for Idea Lights, which has built its own platform for smart city lighting, and Mapon, which collects telemetry from trucks. Both companies rely on self-developed data platforms. It’s notable that none of the companies have tied their fate to Microsoft Azure, AWS, or another cloud provider.
“Our platform can run anywhere”, says Toms Stalmans of Idea Lights. “We also prefer our own data centers”, adds Raivis Bondars of Mapon. “Being part of the Draugiem Group helps with that. There’s a lot of support from the group, especially regarding servers and data centers. We have access to the best engineers here.”
Strong together
Unicorn Printful also originated from Draugiem. It suddenly becomes clear that the entire tech ecosystem in Latvia is interconnected. Draugiem Group offers expertise and support for various companies, including the successful Printful, which in turn supports the Startup House from which new companies grow. It sometimes seems like everyone knows everyone.
“That’s probably almost true”, laughs Bondars. “If you need someone in Latvia, it’s never hard to find that person. One degree of Kevin Bacon, you know.”
If you need someone in Latvia, it’s never hard to find that person.
Raivis Bondars, Mapon
Together, entrepreneurs and the government in Latvia succeed in pulling together. “For those starting a business here, the small internal Latvian market is probably even an advantage”, thinks Felman. “A company that starts in Germany often gets stuck in the German market. In Latvia, global thinking is necessary from day one. Investors don’t see Latvia or even the entire Baltic states as a market. Only with a focus on the entire EU or the US can companies attract funds.”
Startup class with gender equality
Furthermore, Latvia knows what it wants. Education and STEM are highly valued. With a limited population, it’s essential to provide everyone with the best possible education and activation.
For that reason among others, the StartSchool is located on the top floor of the Startup House. This organization teaches a curriculum licenced from Silicon Valley to participants who pass an entrance exam. During a fully subsidized academic year, they learn not only coding but also entrepreneurship. StartSchool collaborates with another organization: TechGirls Riga. The result: almost half of the program’s participants are women.
Born as a multinational
The country thus manages to sustainably capitalize on the opportunities of modern society. Those who build digital solutions can do so from anywhere. In Riga, a culture of tech entrepreneurs has emerged who find it only natural to think globally from the start. And so companies like TestDevLab, DeskTime, or BirdyChat are multinationals even before they’ve properly left the starting line.