Latvian IT and Startup Market Review Q2, 2014
Arcana Digital Group: Latvian IT and Startup Market Review Q2, 2014
Vision of your digital perfection
Content Opinion of Arcana Digital Group
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Achievements of Latvian Startups
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June
Within a month, Latvian startup Kickstarter raised over 1 million dollars Latvian Mailigen attracted investments in volume of over 500,000 USD from FlyCap
April
Mobile app developed by Arcana received a gold award from the International Adwards Jury
New Latvian IT and Startup Companies May
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Wememe: now everyone can turn a meme into offline brand and gain profit PentaClass saves 65% of teachers from losing their voice and makes the teaching process more comfortable
April
Latvian web developers plan to bring together all young fashion professionals in a single online community New startups from Draugiem Group spy on the employees and reveal secrets Within two months, Tigo.lv project helped 1 796 people to sell unnecessary things
Industry Development June
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Latvian developer of control system Horizon was acquired by the Visma Group Corporation Latvian IT market urgently seeks 4000 professionals The Mill: leading Latvian startups create environment for IT-enthusiast’s development
May
Editor in Chief of Arctic Startup and founder of accelerator in Silicon Valley revealed the secret of investment attraction 30 aspiring startup founders under 30 were awarded during the Forbes Equity Club II conference After attracting investments in volume of 1,34 million USD, Infogr.am left TechHub Thanks to Mykoob campaign, Latvian schools received 750 computers for 0,5 million Euro
April
Study: from 470,000 of smartphone users in Latvia, 270,000 use banking services via mobile phone Arctic Evening IT Forum: Latvia moves 2 positions up in the world economic rating
Foreign Media About Latvian Projects June
Global Editors Network summit: The New York Times visualization won the Infogr.am voting
May
Only 5 Latvian startups reached the final of the Arctic15
13 p.
CoBook acquired by the US company gathers contacts all over the world
Interviews and Opinions June
Terebin brothers confessed to the journalist of Time that the ask.fm was not their idea
April
Interview of the Director General and founder of BuzzTale, Andris K. Berzins
15 p.
Interview of Anna Andersone, the founder of Latvian web-design startup FROONT
Arcana Digital Group: Latvian IT and Startup Market Review Q2, 2014
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Opinion of Arcana Digital Group We see that the expectations articulated at the beginning of the year come true, and the Latvian IT companies attract more and more investment. Without a doubt, it can be attributed to the international explosive growth of the IT industry. However, taking into account the features of the local economy, first of all, it is a merit of the local entrepreneurs who proved their ability to create world-class products. Unfortunately, the development of the IT industry in Latvia faces a scarcity of a key resource. According to the market experts’ estimates, compared to other countries, Latvia urgently needs 4000 specialists. However, the infrastructure required for the development of IT startups is developing rapidly. Aspiring entrepreneurs have more and more possibilities: incubators, communities, conferences, etc. We can observe a sharp increase in interest in the startup sphere from the side of young specialists, investors, and media. To a large extent, this interest can be contributed to the high-profile successes of recent Latvian startup projects. This year alone, the total amount of the investments in Latvian IT sector exceeded 10 million USD taking into account the investments in Infogr.am, RoamerApp, Cobook, FMS, AirDog, Mailigen, and Sonarworks. It is particularly important that the success of Latvian projects is not focused exclusively on the local market and is highlighted in international media. Such attention opens new horizons and promises new prospects for investment attraction. Despite the fact that Latvian startup industry in general cannot be compared with such leaders as Silicon Valley, local entrepreneurs are quite optimistic and continue to master advanced technologies. “Internet of Things” is one of the hottest world trends, which attracts more and more developers. This path of development is facilitated by the accessibility of production and lo-
gistic capacities, the speed of spreading of innovational technologies, revolutionary funding opportunities through crowdfunding platforms, as well as low competition as compared with software market. Namely these factors backed by the courage and creativity of Latvian developers allowed the AirDog team raise through Kickstarter a record amount of 1,3 million USD with a two-month old project. The major problem Latvian startup developers face is the lack of entrepreneurial experience. In order to talk with certainty about the stable success of Latvian startups, we still need more of the international successes. Therefore, despite the promise of hardware sphere of production, software development in Latvia still looks more attractive for the industry, as it already has notable success stories. We believe that in the software industry, the most promising area for web developers is the development of mobile apps. This industry is rich in vacant niches and consumption has not yet reached its peak. We expect in the near future that a new industry of interest will be the developments for wearable gadgets and big data. In general, according to the review of the Latvian IT startup market for the second quarter of 2014, we see that Latvia has everything it needs to enter global IT market and succeed.
Alexander Kregers director of Arcana Digital Group 29th of August 2014
Arcana Digital Group: Latvian IT and Startup Market Review Q2, 2014
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Achievements of Latvian Startups
Arcana Digital Group: Latvian IT and Startup Market Review Q2, 2014
Within a month, Latvian startup raised over 1 million USD on Kickstarter June, 2014 The development of Latvian company SIA Helico Aerospace Industries, AirDog, is the world’s first air drone capable of following the athlete in an autonomous mode and film the performance using GoPro camera. The project had been on Kickstarter in order to raise 200,000 USD to start the production of drones. In just a couple of days, AirDog attracted 291 people and raised 207,234 USD. A hundred people who contributed 995 USD each will receive the first AirDog drones. The developers planned to produce AirDog in different colors and develop an opportunity to recharge the GoPro camera from the main battery in the increase of financing. However, all of the milestones were achieved during the campaign, meaning that the customers will be able to purchase AirDog in two colors with a rechargeable battery at once. Moreover, the project has reached its following, the most ambitious goal, raising 1,000,000 USD. The developers also promise to “teach” the drone to avoid obstacles. Source: http://ej.uz/airdog_collected_1m
Latvian Mailigen attracted over 500,000 USD investment from FlyCap June, 2014 Mailigen company that created a world popular internet service of email based marketing attracted the total investments of over half a million dollars. The investments were made by US, Japanese, and Latvian investors. The biggest share of the investment had been provided by the FlyCap investment fund. The company plans to invest the raised funds into the development of Mailigen platform. Thanks to these improvements, established in Latvia and maintained by the Latvian team platform can become the world’s leading service for companies that require the services of an integrated marketing. Mailigen clients are companies from more than 100 countries. The main target market of Mailigen is the USA. Source: http://ej.uz/mailigen_investments
Mobile App developed by Arcana received gold award from the International Jury of Adwards April, 2014 Developed by Arcana Digital Group app for low cost long distant calls called Roamer received the I level Order of Adwards in the category of interactive and digital solutions. The award demonstrates that the project have opened the new horizons and set new standards for the industry. Thus, the startup has entered in the Latvian history of advertising and design. The representatives of Adwards comment the highest award receipt: “Roamer creators’ talent and professionalism are unquestionable. The project became classic.” Creative Festival held in Riga. The Grand Prix had been awarded to the Asketic for the Gors campaign. Source: http://ej.uz/arcana_adwards
Arcana Digital Group: Latvian IT and Startup Market Review Q2, 2014
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New Latvian IT and Startup Companies
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Arcana Digital Arcana Group: Digital Group: LatvianLatvian IT and IT Startup and Startup MarketMarket Review Review Q2, 2014 Q2, 2014
Wememe: now everyone can turn a meme into offline brand and gain profit May, 2014 In May, Draugiem Group presented its new project, Wememe. Wememe is a platform that allows anyone create a meme, print it on a T-shirt, and make a profit from the sales. It is a simple way to have extra income. All you need to do is come up with a meme, add text and choose a color for the T-shirts. In order to start earning 10% from each sold item, you need to sell at least 5 items to send the design in mass production. The products are made in Los Angeles with the support of PRINTFUL. Source: http://ej.uz/Wememe_own_bussines
PentaClass saves 65% of teachers from losing their voice and makes the teaching process more comfortable May, 2014 This Latvian startup solves the problem of the teachers who have problems with vocal cords. The solution is a simple, wireless audio system that provides uniform distribution of sound throughout the school class or audience. PentaClass can be installed in any type of a premise with the area up to 120 square meters (1291,7ft²). All components are manufactured, and quality tested in Latvia. “Our main focus in this development was the engineering aspect” — says the founder of PentaClass, Lauris. “Taking into account that school classes and audiences can be of various size, our engineers strived to make PentaClass work equally well in all types of premises.” The final prototype was developed with the assistance of the Cesis Business Incubator and Ventspils High Technology Park. Source: http://ej.uz/voice_startup
Latvian web developers plan to bring together all young fashion professionals in a single online community April, 2014 First Step Fashion is a promising internet startup that helps young talents to take their first steps in the fashion world. The service brings together young talents and employers from the fashion industry with a shared portfolio database. It also provides tips and advice from top-level masters. Thus, First Step Fashion becomes the most attractive meeting place for employers and job seekers in the following categories: models, designers, photographers, stylists, and makeup artists. Olga Grassler, co-founder of the First Step Fashion, says about launch of the project that “The first steps in any profession are the most important, which is why First Step Fashion is designed to help namely young talented people on their path. We already had a good portfolio database of talented youth and employers at the launch of the project. It is a very promising project with great potential, and now we are in search for investment for its further development.” Source: http://ej.uz/fashion_community
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New startups from Draugiem Group spy on the employees and reveal secrets April, 2014 1work is an office widget system that includes booking of a meeting room in real-time, electronic office bulletin board, where the employees can leave messages about their whereabouts, the panel with general information about the office, and electronic secretary who greets guests and sends notifications to the employee who has a visitor. Another, no less interesting development of Draugiem Group is LUI, a social app that allows sharing your secrets. Users can select a background for their post and specify with whom they want to share a secret. According to the developers, the app is designed for offices and urban centers. Source: http://ej.uz/control_over_personnel
Within two months, Tigo.lv project helped 1796 people to sell unnecessary things April, 2014 Tigo.lv is a new service that allows you quickly, easily, and in a simple way to convert already used things to real money, thus increasing the welfare of people. In other words, the user is encouraged to get rid of old stuff in good / working condition. The range of products that can be offered for sale at Tigo.lv is quite large: you can sell used cell phones, PC, household appliances, sports equipment, jewelry, and even musical instruments. The service was launched in February this year and within two months gathered 1,796 clients. Source: http://ej.uz/system_sales
Arcana Digital Group: Latvian IT and Startup Market Review Q2, 2014
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Industry Development
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Arcana Digital Arcana Group: Digital Group: LatvianLatvian IT and IT Startup and Startup MarketMarket Review Review Q2, 2014 Q2, 2014
Latvian developer of control system Horizon was acquired by the Visma Group Corporation June, 2014 The developer of Horizon IT solutions for business, FMS, has become a part of one of the largest IT companies of the Nordic region, Visma Group. SIA FMS is a leading company in the field of asset management, business intelligence, and IT consulting services in Latvia. Among the most notable customers of the company there are Ministry of Finance, Riga City Council, Riga East University Hospital, Jānis Roze bookstore, and many others. SIA FMS has 197 employees. Its turnover for 2013 amounted to 8 million Euro. According to the executive director of the SIA FMS, the company has long been looking for an investor to help the development of the enterprise, to provide access to the latest technology, knowledge and reach out to a wider market. Source: http://ej.uz/Horizon_sold
Latvian IT market urgently seeks 4000 professionals June, 2014 In Latvia per 200 citizens, there is only one IT specialist. For comparison, in Finland this number is four. The lack of IT specialists in Latvia prevents the country from the full participation in major international business projects. If the problem is solved, the IT industry will be able to bring the economy to a new level through the creation of new workplaces and taxes contribution to the state budget. Worldwide, the demand for IT specialists is increasing, and Latvia is no exception. The industry needs not only programmers and system administrators, but also consultants in the field of technology solutions, the creators of databases, experts in support of IT services. The Confederation of Employers and the Centre for the Content of Education are already working in the direction of changing the situation. Source: http://ej.uz/requires_professionals
The Mill: leading Latvian startups create environment for IT-enthusiast’s development June, 2014 Even during the first months of existence, The Mill had held several significant IT industry events. For example, it hosted Arctic Startup that had been attended by 150 people. The facilities of The Mill hosted several design events, radi! 2014 week, a lecture by Alice Rawsthorn (UK), and the Self Publish Riga exhibition of photo books. The Mill combines four Latvian startups in the field of technology and design: Froont, Berta. me, HungryLab, and Sellfy. Unlike TechHub Riga, Startup Latvia, and Innovation Café focused on technological startups, The Mill is more oriented on the bringing together designers and programmers. Source: http://ej.uz/The_Mill_unites
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Editor in Chief of Arctic Startup and founder of accelerator in Silicon Valley revealed the secrets of investment attraction May, 2014 ArcticEvening is a series of events that brings together the representatives of northern Europe startups. The hosts of the event noted that the meeting in Riga has left a strong impression. They were especially pleased and impressed with the volume of attracted investments and Tech Chill Baltics conference. The event was officially opened by the chief editor Dmitri Sarle, who told about how aspiring entrepreneurs can reach new heights by participating in technological conferences and various events that bring together industry professionals and potential investors. In the framework of the event, famous Silicon Valley persona, founder of BlackBox accelerator, Fadi Bishara, shared his tips for success. BlackBox is known as an accelerator company that helps start-ups to enter the market. The closing event of ArcticEvening was held in late May in Helsinki. Source: http://ej.uz/ArcticEvening
30 aspiring startup founders under 30 were awarded during the Forbes Equity Club II conference May, 2014 Forbes Equity Club II is a great opportunity for young entrepreneurs to learn from influential businessmen, get advice on how to build a business or sell their ideas to investors, and learn what to avoid in launching a startup. Forbes Equity Club II will also continue to educate non-professional investors, who are working in a startup industry in Latvia and worldwide. Successful transactions involving Latvian startups such as Infogr.am, which attracted 1,34 million Euro investments prove that even a small investment in good ideas and teams can quickly provide investors with high returns. At the end of the conference, 30 of the most successful young people under 30 years, who are leaders in their field and in the near future will become prominent Latvian entrepreneurs were awarded. Source: http://ej.uz/Forbes_Equity_Club
After attracting investments in volume of 1,34 million USD, Infogr.am left TechHub May, 2014 Infogr.am left TechHub Riga and moved to a separate office. Infogr.am team of 20 people, planning to expand the company, has selected a new comfortable office that can accommodate up to 40 employees. TechHub had been also left by the web design platform Froont, digital payments platform Sellfy, and the website development helper Berta CMS, which later got together in the framework of The Mill community. Source: http://ej.uz/loss_TechHub
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Thanks to Mykoob campaign, Latvian schools received 750 computers for 0,5 million Euro May, 2014 In the framework of the campaign organized by the Latvian startup Mykoob, during the year, several Latvian schools were presented with nearly 500 sets of computers. The total amount of donation amounts to nearly 0,5 million Euro. Member of the Mykoob Board, Girts Laudaks, reported that in previous years, in total 250 computer sets had been already donated, so to date, the total number of donated equipment sets is 750. Mykoob is the administration system representing an important aid to schools in the improvement and modernization of the educational process. This system provides access to information and analysis of the learning process for all interested parties, which is an important achievement in the education sector as a whole. Source: http://ej.uz/mykoob_charity
Study: from 470 000 of smartphone users in Latvia, 270 000 use banking services via mobile phone April, 2014 International developer of web-based business solutions, Arcana Digital Group, in collaboration with the research company TNS Latvia and the support of mobile banking developer iDa Mobile conducted a study about the use of mobile technology in the banking sector of Latvia. The survey has shown that 270,000 residents of Latvia aged 15 to 59 years use the banking services via mobile phone. 66% of them use mobile applications of their banks. At the same time, only 8 of the 21 commercial banks in Latvia offer their customers mobile applications to use banking services. Source: http://ej.uz/mobile_banking
Arctic Evening IT Forum: Latvia moves 2 positions up in the world economic rating April, 2014 Latvia has been ranked 39th in the rating of Information Technologies of the World Economic Forum. Latvia has shown the most success in one of four categories, the one assessing infrastructure, availability of finance and skills, ranked based on these indicators 29th. In the rating based on infrastructure and digital content, Latvia is ranked 41. Based on financial capabilities of residents and their ability to buy IT services Latvia is 26th. In skills rating, Latvia is on 35th place. According to the World Economic Forum’s data for 2012, Finland is ranked 1st based on availability of new technologies, Latvia — 45th. Based on the use of new technologies in production, we are only at 68th place, while Finland is ranked 7th. Source: http://ej.uz/Latvia_39th
Arcana Digital Group: Latvian IT and Startup Market Review Q2, 2014
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Foreign Media on Latvian Projects
Arcana Digital Group: Latvian IT and Startup Market Review Q2, 2014
Global Editors Network summit: The New York Times visualization won the Infogr.am voting June, 2014 Media project that studied the income inequality in the United States based on the place of birth (“In Climbing Income Ladder, Location Matters”), scored the highest number of votes of the users of Infogr.am and received the award in the field of data journalism, Data Journalism Awards 2014, organized by the Global Editors Network. Project of The New York Times “The higher the income, the more important is location” has been nominated as one of the top 12 in the field of data journalism in the category “Scene Information in Online or Print Media.” It became one of five projects that have been selected by an expert group of Infogr.am for the public voting. Over 2,000 users of Infogr.am from around the world recognized the project as the best in the field of data visualization. Source: http://ej.uz/Data_Journalism_Awards
Only 5 Latvian startups reached the final of the Arctic15 May, 2014 This year, among the finalists of Arctic15 there had been 5 Latvian startups: BuzzTale, Froont, Maxtraffic, Oppo и Scorefellas. The winner of the prize of more than 14,000 Euro became the Finnish startup Smarp, which allows employees to share information about the company in external social networks and get rewarded. Arctic15 is a twoday conference, which takes place in Helsinki and is aimed at gaining experience, searching for new partners and transactions conclusion. All conditions the conference offers have been created to help explore, discover, and get a real return on investment. Source: http://ej.uz/Arctic15_final
CoBook acquired by the US company gathers contacts all over the world May, 2014 In today’s world there are many places where you can store contact information: phone, email, and social networks. CoBook solves the problem of this chaos and helps organize all the information into a single system, tracking it through Facebook, Twitter, ICloud and other resources. The use of service requires a certain degree of trust, as a user needs to provide access to the information stored on used sources. From their part, the developers of the app warrant non-disclosure and full confidentiality. As previously reported, CoBook became a part of the American company FullContact. Source: http://ej.uz/Cobook_cloud
Arcana Digital Group: Latvian IT and Startup Market Review Q2, 2014
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Interviews and Opinions
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Arcana Digital Arcana Group: Digital Group: LatvianLatvian IT and IT Startup and Startup MarketMarket Review Review Q2, 2014 Q2, 2014
Terebin brothers confessed to the journalist of Time that the ask.fm was not their idea June, 2014 American weekly Time magazine interviewed the founders of one of the world’s largest social networks, Ask.fm, brothers Ilya and Mark Terebin. In the interview the brothers talked about life, business, and the responsibility for the suicide of teenage users of Ask.fm. In the conversation with the Time journalist, Terebin brothers confessed that the idea of Ask.fm does not belong to them. “There was such network called Formspring. And it’s their idea. We just liked it and decided that we can improve it,” said the eldest of the brothers, Ilya. Time reports that Ilya and Mark Terebin, as well as their partner Oscar Liepinsh, invested in the creation of the project half a million US dollars. Further financing is the investment of Rubylight company, specializing in online projects. The original interview is available at: http://time.com/2923146/ask-fm-interview/ Source: http://ej.uz/time_to_askfm
Interview of the Director General and founder of BuzzTale, Andris K. Berzins April, 2014 BuzzTale — is a platform for corporate visual communication, which aims to help companies to attract the attention of staff, motivate them and strengthen the company’s corporate culture. In fact, BuzzTale is a combination of Facebook and Pinterest. Some time ago, BuzzTale received 50,000 Euro from the investment company Imprimatur Capital. The investment is a loan from the EU structural funds, designed for six years with the first payment made within a year. On the change of the name and direction of the startup development, the first customers, and developers’ plans for the future, read the interview of Andris K. Berzinsh. Source: http://ej.uz/BuzzTale_interview
Interview of Anna Andersone, the founder of Latvian web-design startup FROONT April, 2014 FROONT beta version was launched a year ago, and now the team of developers is working hard on its improvements. In a short time, they aim to attract large investors and conquer the U.S. market, with a gradual spreading to the international market. FROONT is a tool for web design, which is designed specifically for designers of web pages, and not for programmers. The service greatly simplifies the process of creating and adapting home pages without additional programming knowledge. Source: http://ej.uz/Froont_interview
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