The Baltic Fintech Ecosystem: Building Unicorns


Jevgenijs Kazanins of Twino introduces the Baltic tech scene at EXEC Fintech in Berlin

Those familiar with the European fintech sector may have wondered for some time about why the Baltic States, which are among the smallest countries of Europe, are producing so many Fintech startups – including their first “unicorn”, international payments startup Transferwise which was founded in Estonia.

Jevgenijs Kazanins, the CEO of marketplace lender Twino kindly decided to answer the question for the benefit of the attendees of the EXEC Fintech conference that gathered 800 Fintech and Insurtech professionals in Berlin, Germany, on April 5 & 6.

Estonia (EE), Latvia (LV), and Lithuania (LT) comprise, all taken together, around 6 million inhabitants. Yet, due to the high level of technology penetration and technology education, these countries have produced a disproportionally high number of technology hardware and software startups ever since the beginning of the digital revolution. Many of them, such as airdog, Pixelmator, Pipedrive (a new generation CRM),, and Bitfury (one of the biggest bitcoin miner in the world) have achieved a global footprint.

The Baltics States have also been among the first countries to develop business models based the sharing economy. This includes sharing cars, sharing parking spots as well as more original applications such as sharing taxi rides with taxify (ES) and sharing clothes with Vinted (LT)

But Fintech is the strongest of the tech sector of the Baltic States. This includes many payment companies such as Monea (LV) and TransferGo (LT) in addition to the above mentioned Transferwise (EE).  It also includes online lending and crowdfunding platforms such as Funderful, a scholarship crowdfunding platform (LV) and many online lending marketplaces, including: Bondora, a pioneer out of Estonia, Savy (LT), Mintos (LV) and Twino (LV). Meanwhile, Twino and Mintos are among the largest marketplaces for consumer loans in Continental Europe – catching up in terms of volume with the likes of the German Auxmoney and the French Younitedcredit.

How did this happen? Why are fintech companies so strong in the Baltics? Not by chance, said Jevgenijs Kazanins, CEO. In addition to the above-mentioned tech savviness and taste for collaborative models, other strong factors uniquely favor the emergence of fintechs in the Baltic States.

“When I started in 2009, there was no ecosystem, now we have a uniquely favorable ecosystem that is capable of producing Fintech unicorns like Transferwise,” he said.

The main factors driving the emergence of fintechs in the Baltic States are:

  • No legacy systems. The Baltic States had to rebuild their financial systems from the ground up, from the Central Banks to retail banks twice, after the separation from the Soviet Union and after the financial crisis of 2008.
  • International mindset. Young business people from the Baltics are citizens of the world. They study and work abroad: Transferwise founders worked in London; Jevgenijs himself worked in the US. Speaking 3 languages including English is the norm for young people in the Baltics.
  • Government support. Government officials in these countries are accessible and listen to their people. The president of Estonia shows up as kids’ school competition. These governments have or are about to issue P2P lending legislation (coming up soon in Latvia), They give tax breaks to startups that partly subsidize recruitments. These conditions attract Russian and Asian entrepreneurs as well.
  • Lack of internal market. This, Jevgenijs, said, is, of course, the main reason why Baltic Fintech entrepreneurs think beyond their countries’ borders, right at the onset of founding their company

“There is a saying that if you launch a garage startup in Silicon Valley, you have VCs at your doorstep, whereas if you open one in Helsinki you have 6 feet of snow. The same is true of us in the Baltic. We have to think beyond our internal market, think globally from the start. This is very different from, for example, French or German entrepreneurs who can reach a 10 million people market right off the bat.”

The favorable factors are still at work. Thus, stay tuned for more Fintech startups coming from the Baltic States.

Hot sectors there are SME lending, Insurtech and asset management. One example of the coming wave is Tuleva (EE). Tuleva is setting out to disrupt the pension fund industry by crowdfunding an asset management company that will drastically reduce the fees that are currently eating up people’s pension.

In parting, Jevgenijs Kazanins gave a short update on Twino.

Twino has been operating since 2015 by giving to European investors the opportunity to purchase high yields loans originated in Poland, Georgia, Russia by Twino’s mother company. To date, Twino has funded €125 million worth of consumer loans through 7,500 investors from 31 countries, mostly Germany, the UK, Estonia and the Netherlands. Twino provides to investors full transparency on the loans, which they can purchase whole or in part. They can also opt for various levels of guarantee such as payment guarantee and buy back guarantee.


Therese Torris, PhD, is a Senior Contributing Editor to Crowdfund Insider. She is an entrepreneur and consultant in eFinance and eCommerce based in Paris. She has covered crowdfunding and P2P lending since the early days when Zopa was created in the United Kingdom. She was a director of research and consulting at Gartner Group Europe, Senior VP at Forrester Research and Content VP at Twenga. She publishes a French personal finance blog, Le Blog Finance Pratique.

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