What Swedish Investors Think About Latvian Startup Ecosystem?
To better understand the differences and similarities between the Latvian and Swedish startup ecosystems, Inta Buša, Co-Founder and CEO of Dealita, recently traveled to Stockholm. In 10 video interviews with prominent investors and startup ecosystem stakeholders—including Sten Krinpus, Magnus Hambelton, Kerstin Cooley, and Armando Cázares-Korner, Head of Community at Sweden’s startup hub The Park—she discussed the key differences between the two ecosystems and explored opportunities for mutual learning.
Sten Krinpus brings a unique perspective, with in-depth experience in both the Baltic and Swedish startup environments, having lived and worked in both regions. Magnus Hambelton, a VC investor at byFounders in Stockholm, and Kerstin Cooley, a General Partner at Course Corrected VC and Brightly Ventures—an early-stage Nordic venture firm—also shared their insights into the dynamics of the two ecosystems. All 10 video interviews can be listened here.
Europe is home to some of the most exciting and diverse startup ecosystems, each with its own strengths, challenges, and opportunities. Among these ecosystems, Sweden and Latvia offer an interesting comparison: one a well-established global powerhouse, the other an emerging hub with vast potential. Let’s explore what makes these two ecosystems tick and how they stack up against each other.
1. The Maturity Gap
Sweden is a global leader in startups and innovation. Stockholm, its capital, has earned the nickname "The Unicorn Factory" for its incredible ability to produce billion-dollar companies like Spotify, Klarna, and Skype (co-founded in Sweden). Sweden’s ecosystem is mature, well-connected, and consistently ranks among the top startup hubs globally.
Latvia, on the other hand, is still in its growth phase. While its ecosystem does not yet match Sweden’s global recognition, it is steadily rising as a Baltic startup hub. Riga, Latvia’s capital, is home to a growing number of promising startups (including Dealita 🙂) and tech innovators, positioning itself as a regional player with aspirations to go global.
2. Access to Funding
Swedish startups enjoy robust access to venture capital, angel investments, and government-backed funding. Sweden’s reputation as a hub for innovation attracts international investors, and initiatives like Vinnova (Sweden’s Innovation Agency) and Almi provide grants and loans to help startups thrive.
In Latvia, funding is more limited, but progress is being made. Latvian startups often rely on EU structural funds, local grants, and programs like Startup Wise Guys, a leading Baltic accelerator. While international investor interest is growing, access to capital, particularly in later stages, remains a challenge for Latvian startups compared to their Swedish counterparts.
3. Government Support and Policy
Both Sweden and Latvia have supportive governments, but their approaches differ.
In Sweden, startups benefit from government initiatives like Vinnova’s innovation grants, favorable tax policies, and strong public-private partnerships. Sweden’s regulatory environment is pro-business, making it easier for entrepreneurs to start and scale businesses.
Latvia has taken significant steps to foster its ecosystem, including implementing a Startup Law that offers tax incentives and financial benefits to early-stage startups. Additionally, Latvia offers startup visas to attract non-EU founders, making Riga an appealing destination for international entrepreneurs.
4. Talent Availability
One of Sweden’s greatest strengths is its highly skilled and tech-savvy workforce. Sweden has a strong culture of innovation, supported by world-class universities like KTH Royal Institute of Technology, Lund University, and others. However, the cost of hiring talent in Sweden can be a significant barrier for early-stage startups.
Latvia, on the other hand, offers a multilingual, affordable workforce. Its highly skilled professionals, particularly in tech, provide a competitive advantage for startups looking to operate at lower costs. However, Latvia faces challenges in retaining talent, as many young professionals seek opportunities in Western Europe.
5. Cost of Doing Business
When it comes to affordability, Latvia has the edge. The cost of living, office space, and salaries in Latvia are significantly lower than in Sweden, making it an attractive option for early-stage startups and entrepreneurs with limited budgets.
In contrast, Sweden, while offering excellent infrastructure and resources, is an expensive place to do business. High taxes, labor costs, and living expenses can pose challenges for startups that are not yet generating significant revenue.
6. Key Industries and Startup Success Stories
Sweden’s startup ecosystem is diverse, with strengths in fintech, greentech, gaming, and healthtech. Major global players like Klarna (fintech), Spotify (music streaming), and King (gaming, creator of Candy Crush) are prime examples of Sweden’s ability to foster successful startups.
Latvia is establishing itself as a hub for innovation in fintech, deeptech, logistics, and biotech. Companies like Printful (e-commerce automation) and Sonarworks (audio technology) have earned international recognition, highlighting the country’s ability to produce globally competitive startups. Swedish investor Magnus also cited Printful as an excellent example of a standout Latvian startup
7. Community and Networking
Sweden boasts a vibrant startup ecosystem, supported by well-established accelerators like SUP46 and Sting. This dynamic environment fosters global connections between startups, investors, and industry leaders. Armando shared how The Park ecosystem facilitates collaboration among academia, startups, and large companies. With its strategic location, which also includes a local hospital, this approach enables the creation, testing, and iteration of innovative projects, ultimately shaping solutions for future business applications.
Latvia’s startup community, while smaller, is tight-knit and growing rapidly. Events like TechChill, Riga’s premier tech and startup conference, are putting Latvia on the map as a Baltic innovation hub. Initiatives like Startup Wise Guys and the Latvian Startup Association are also helping to build a collaborative ecosystem. Additionally, communities like Startup House and the Intelligent Space enable collaboration, fostering new opportunities together.
8. Global Influence
Sweden punches far above its weight on the global stage. Stockholm is recognized as one of Europe’s top startup hubs, and Swedish companies frequently expand into international markets, becoming household names.
Latvia’s influence is more regional, with a focus on the Baltics and Eastern Europe. However, its strategic location, affordability, and EU membership give Latvian startups the potential to grow beyond the region and reach global markets.
What do you think are the key differences between the startup ecosystems in Sweden and Latvia?
This project was created with the support of the Sweden-Latvia Cooperation Fund.