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Latvian Fintech Landscape Update: 2023

The fintech sector is transforming global financial services, and Latvia, a rising player in the European fintech scene, is no exception. With a vibrant startup ecosystem, Latvia's fintech landscape offers innovation, challenges, and opportunities influenced by global trends.Venture Faculty with partnership with Dealroom as every year has made an update on the latest changes in the Latvian fintech ecosystem.

Latvia's fintech landscape continues to develop balancing growth, innovation, challenges and market shifts. Although several companies, notably from crowdfunding and lending spheres have left the scene, the entry of new players signals ongoing opportunities and dynamism in the market. Funding patterns have shown mixed trends with only a limited number of players managing to secure investments. Companies like FIS Solutions, InDemo and Finfra have garnered notable seed investments, but the overall pace of financing appears to have slowed, echoing global sentiments. Sun Finance, an online lending platform, has been named among Europe’s fastest growing companies by Financial Times. In addition to recognition, they have also listed a EUR 50 million bond "First North" alternative market of Nasdaq Riga  with a nominal value of 1000 euros in April, showing the strength of established players to attract financing outside scope of Venture Capital.


Out of the approximately 500 startups in Latvia (exact number of startups vary from 420 - 600), 142 operate within the fintech sector, constituting approximately 29% of the overall startup ecosystem. Within the fintech domain, Payments and Data/IT solutions are the leading segments, each comprising about 23.2% of the fintech startups. The P2P/Crowdfunding sector comes next, representing 14.7% of the fintech market. Crypto/blockchain initiatives account for 12.6% of the landscape, with Fintech lenders closely following at 11.2%. The Banking sector makes up 3.5%, while Brokers and AML/KYC startups stand at 2.1% and 1.4% respectively. Lastly, other fintech startups, which encompass diverse and niche areas, contribute to 7% of the fintech landscape. Interestingly, since the last review, 8 fintech startups have seized their operations. They were focused on crowdfunding, payments and lending. On the bright side, there are 10 companies added to the list with 5 of those operating in Data/IT solutions, 3 in the Payments section and 1 each to P2P/Crowdfunding and Crypto/Blockchain sections.

Fintech companies in Latvia by sector. Source: Dealroom; Venture Faculty

Exciting newcomers to the list

Within the growing fintech landscape, prominent players such as Finfra, Bonus Karte and InDemo stand out. InDemo, with a market valuation of €2,500,000, has successfully procured €500,000 in seed funding to unveil a sophisticated platform catered to enhance investment accessibility. Strategically targeting the Spanish market initially, InDemo's product suite includes investment in loans collateralized by real estate, facilitating private investors to engage with an initial capital as modest as 10 euros. Bonus Karte offers a Bonus Card system for companies to provide tax reduced paid lunches and medical expenses to the employees, promoting staff motivation and positioning the employer as socially responsible. Company leverages the fact that by Latvian law, meals and medical expenses covered by employers up to 480 EUR per year are not taxable. By using this system, employers can enhance loyalty and save on taxes, while employees benefit from a tangible and frequently used bonus. Finfra provides a comprehensive embedded finance solution in Indonesia, allowing underbanked businesses and digital platforms to seamlessly integrate lending services. Finally, one of the more exciting companies on the list is FIS Solutions. This firm has developed a customisable lending software for lenders and banks which allows them to manage loans.

Number of new Fintechs established in Latvia over past 6 years. Source: Dealroom; Venture Faculty

As previously noted, the funding patterns have been giving mixed signals in the past years with less funding being attracted by young companies, while several notable size funding rounds from public markets were executed by established players. Due to that fact, latvia fintechs were experiencing a constant increase in funding (due to mature players raising proportionally more) until 2022 according to the data from “The Pulse of Fintech Industry in Latvia” report. This is in line with the global trend where $43bn were raised by fintechs from VCs in 2020, then followed by a boom in investment in 2021 when $128bn were committed to fintech funding and then finally 2022 marked a decline in investments down to $82 billion and still continuing to decrease. Investors have become more cautious due to interest rate hikes, high economic uncertainty caused by geopolitical events.

Upcoming fintech landscape opportunities

Nevertheless recent developments are shedding a certain light and hope for the Latvian Fintech sector due to many reasons.

Firstly, the EU has granted Latvia €93 million for establishment and development of new VC funds. Three startup venture capital funds will be given access to €55.8 million while an early stage venture capital fund and an expansion stage venture capital fund will be able to access €12.4 million and €24.8 million respectively. This means also new fintechs will have a possibility to compete for this funding.

Additionally, on June 13, the Latvian government approved the creation of  €50 million Baltic SME IPO fund, in collaboration with INVEGA, to finance SMEs' listings on the Baltic securities market, focusing on enterprises valued between €5-100 million. This news shows that in the coming years Latvian fintechs will have new ways to access financing and hence facilitate further development of the industry in the country.

At the same time a rising trend is P2P lenders acquiring investment brokerage licenses. The acquisition of these licenses by several Latvian P2P platforms gives them a chance to broaden their services, positioning them to cement their positions among Europe's top players.

On top of that, With MiCA regulation coming into force in June 2023, Latvia is in a good position to build a friendly environment for crypto and blockchain companies. Following the merger of the Bank of Latvia and the Financial and Capital Market Commission, there's bigger than ever receptivity towards fintech innovations. This approach, in combination with an attractive and clear regulatory framework could be a magnet for emerging crypto enterprises and crowdfunding platforms, especially with the EU's recent regulatory spotlight on them.


Even though there are some powerful players on the market, the number of new fintechs has decreased. Although there was a fall in funding last year, we see that several opportunities have presented themselves. The government strives to create more ways for fintechs to access funds and this will have a profound effect on the future of Latvian fintechs. Nevertheless it is important to act and use these opportunities in the best possible combination to achieve exponential development of the industry.