Latvia is an underrated, digitally-forward country. Many factors make it an attractive destination to do business, such as a fully digitalized business environment that offers the ability to launch a business online in 10 minutes, ubiquitous e-signatures, and fully online tax declarations. Moreover, Latvia is the most startup-friendly country in the world, ranking second among OECD countries for the most competitive tax policy and offering notable reductions for companies based in special economic zones.
Policymakers have made a concerted effort to make Latvia’s business environment attractive. A fast-track green corridor for high-growth-potential industries has even been enacted for businesses in bioeconomy, biomedicine and biotech, smart materials and engineering, smart energy and mobility, and ICT.
The UK is one of many entrepreneurial ecosystems that see opportunity in Latvia. As British businesses increasingly recognize the potential of the Latvian market, the Baltic country is witnessing a surge in investments and partnerships between the two countries. To illustrate the growing UK-Latvian ties, let’s turn our attention to some specific examples.
GoCardless and Latvia: A match made in fintech
In 2022, the Latvian startup scene celebrated one of the most significant exits in the country’s fintech scene – Latvian Nordigen was acquired by the UK bank payment company and unicorn GoCardless. The deal was a milestone for both of the companies and also left a unique mark in the Latvian-UK startup scene dynamics.
Two years later, in April 2024, GoCardless announced the opening of its new European headquarters in Riga. To support its net zero goals and team expansion ambitions, GoCardless chose to locate its team in a freshly built A-class business center in the very heart of Riga.
According to the company’s Chief Operating Officer, Ahmed Badr, GoCardless is bringing the company’s global ambition to life through expansion to Riga. Since the acquisition of Nordigen in 2022, GoCardless’ Riga team has made significant contributions to the UK unicorn’s growth – helping to drive increasingly efficient growth, taking on ownership of the company’s significant banking and technology infrastructure while building expertise in people, merchant operations, legal and finance.
As Badr notes: “Since we entered the Latvian market in 2022, we have more than doubled the team and opened a new office following a significant investment of over €1.7M. We’ve found the highly educated and multi-lingual workforce well-suited to our global operations and look forward to expanding the breadth and depth of the team over the next few years. The Riga team is at the heart of our engineering, product, and operational teams, and we’ll continue to hire for more roles, so we encourage interested applicants to get in touch.”
Grant Instruments’ Latvian venture
Latvia’s highly technical and experienced talent pool is a common reason why international companies, including those of the UK, look towards either expansion to the country or establishing business ties. Exceeding the EU’s average in a highly skilled workforce, Latvia’s human capital plays a significant role in developing various deeptech innovations. For example, due to its historically strong pharmaceutical sector, Latvia is a powerful player in biomedicine and medical technologies.
Grant Instruments, an industry-leading scientific equipment company based in the UK, has been tied to Latvia since the 2000s. In 2005, after a several years-long successful partnership, the UK acquired a 50% share in Biosan, a leading Latvian laboratory equipment company and one of Latvia’s key innovators in the biomed and medtech fields.
Mark Davison, the CEO of Grant Instruments and Chairman of Biosan, commented on the 20-year-long collaboration: “We have a longstanding share in Biosan. We value the hardworking business culture and the great technical skills we can find in Latvia, as well as the integration with Europe and our major markets there.”
Integrating and connecting the UK with Europe is another of Latvia’s strong suits. Being a conveniently located development and manufacturing hub directly connected to the Scandinavian markets, coupled with its efficient transport network and the Baltics’ central airport, Latvia is an excellent gateway to the European market. From January to October 2024, Riga International Airport served 5.9 million passengers, nearly reaching its pre-pandemic traffic levels. Moreover, London has remained the top destination for Riga’s passengers since 2020, with at least four flights a day between the two cities.
Investing and building on the already strong economic ties
The economic and trade relations between the UK and Latvia have been historically strong and remain so. According to the UK Trade data from November 2024, in the first half of 2024, the UK and Latvia traded goods and services worth £1.8 billion. Moreover, UK imports of goods from Latvia increased by 12.3% in the 12 months to September 2024.
When it comes to investments tying the UK and Latvia, the money flows both ways. In 2022, the total value of UK investments in Latvia reached £801 million, while Latvian investments in the UK increased significantly, reaching £65 million, a 306.3% surge from the previous year.
Looking into the startup scene in particular, Latvian tech startups have caught the eye of UK investors. A lot of credit must be given to TechChill, the main startup and tech event in the Baltics, which annually plays a crucial networking role for investors from the UK looking for new investment opportunities in Latvia.
Hence, some of the latest UK VC investments include:
- In October 2024, Latvian defence tech startup Origin Robotics secured €4M in pre-seed with significant contributions from the UK-based Silicon Roundabout Ventures.
- In 2023, Latvian robot-enabled wind turbine maintenance and inspections service provider Aerones raised $30M in a Series A round co-led by Lightrock, a fund headquartered in London.
- The same year, WeedBot, a high-precision laser weeding technology startup whose machine has been tested by farmers in the UK, among other countries, raised €425 000, with Cambridge Agritech among the capital providers.
- Alternative Plants, a Latvian biotech company, sealed a €500K deal in 2022, which was featured by the UK’s SOSV and was a development of a previously successful cooperation between the startup and the fund.
- Latvian proptech startup Giraffe360, headquartered in London, raised $4.5M in 2020, with Hoxton Ventures from the UK being one of the two lead investors. The startup’s continued growth led to further investment from the UK fund and a $6 million long-term loan from London-based venture debt provider Columbia Lake Partners.
A new perspective
With increasing trade volumes, significant investments, and a growing number of successful business partnerships, the UK-Latvian economic relationship is poised for further growth. Latvia’s strategic location, skilled workforce, and supportive business environment make it an attractive destination for UK businesses seeking to expand their operations in Europe.
Thus, if you’re interested in exploring business or investment opportunities in Latvia, contact The Representative Office of the Latvian Investment and Development Agency in the United Kingdom at [email protected] for more information.