2023-09-10 10:15:17
Vilnius Holes in the ceiling, a corded telephone with a rotary dial, 70s furniture and lots of tools – at first glance, the former textile factory in Lithuania’s capital Vilnius seems closer to the long-gone Soviet times than to the future of European start-ups. Scene.
But the entrepreneurs who show Darius Zakaitis’ employees through the building complex don’t mind. In many of the rooms on the 55,000 square meter site, designs and construction plans show you what your office could look like.
Zakaitis, founder of the start-up campus “TechZity”, doesn’t just want to build on the success of other young companies in the country. He wants to create the largest tech hub in Europe – and compete with European models such as the Factory in Berlin (23,000 square meters) or Station F in Paris (34,000 square meters).
A big advantage for TechZity is its location, as Adrian Locher, founder and managing director of the Berlin AI platform Merantix, explains. “The Baltic states have long been known for being at the forefront of digitalization,” says Locher. The region plays a pioneering role in many digital areas. Lithuania has produced several unicorns in recent years, including cybersecurity company Nord Security and online fashion retailer Vinted.
Lithuanian start-ups raised a total of 295 million euros last year, with the best-funded areas being security and fintechs. The Lithuanian start-up association Startup Lithuania estimates the combined enterprise value of start-ups founded or based in Lithuania at 9.5 billion euros.
Darius Zakaitis
The founder wants to attract talent from all over the world to Vilnius.
(Photo: TechZity)
The Baltic country only has 2.8 million inhabitants. However, according to the Dutch business platform Dealroom, Lithuania is one of the fastest growing start-up ecosystems in Central and Eastern Europe.
Talents as a decisive factor for the success of start-ups
TechZity founder Zakaitis, who currently has around 20 employees, describes Lithuania’s advantage as follows: “The biggest difference between Germany and Lithuania: You are 20 times bigger – but we just don’t even think about the local market. From day one, our founders think globally, and that is our greatest advantage.”
His Berlin competitor Locher runs an AI hub called Merantix, where around 1,000 people work at around 500 workstations. From his point of view, the decisive factor is talent. “Good people want to go where other good people are. And such networks or ecosystems need a physical home,” says Locher.
The geopolitical situation in the Baltics – Lithuania borders on the Russian enclave Kaliningrad and Belarus, and the other Baltic states Latvia and Estonia are also direct neighbors of Russia – is not bad per se for Locher. “I could imagine that this is an advantage – that this location can attract particularly adventurous or risk-taking people,” he says. “Like the people who went to Berlin in the 1990s.”
>> Read here: Start-up duel between Berlin and Paris: Where founders have better opportunities
Udo Schloemer, founder and chairman of the start-up campus Factory Berlin, also sees potential in the location. “In general, Eastern Europe represents a huge opportunity in this area,” he explains. The region is full of talent in companies and research. In addition to people with creative ideas, an important question is: “Are there enough people who bring the concept forward, who bring in the pace?”
TechZity is intended to create a community
Zakaitis has been working on the idea of TechZity for ten years, as he explains. “I thought to myself: Start-ups in the first phases of development need a common, safe space.”
The vision: “We’re trying to build a fully-fledged city.” That also differentiates the project from similar approaches in Paris or Berlin, he thinks. Zakaitis is convinced: “Multifunctional hubs are the future.” The site should be open around the clock. “People also want to eat together, organize events, continue their education, do sports, live together,” says Zakaitis.
The implementation is expected to cost 100 million euros for 5,000 people, fully integrated with restaurants, bars and common areas. So far, 30 million of these have been pledged, explains Zakaitis. Vinted founder Mantas Mikuckas pays 80 percent of this, Zakaitis himself the rest. The remaining 70 million are advertised to banks and private investors, for example.
View of Vilnius
Experts see, among other things, advanced digitalization as an advantage of Lithuania as a location.
(Photo: TechZity)
In October, the company plans to announce which companies will move in and TechZity will open next year. “Our goal is to have 70 percent of the space rented before construction begins, i.e. before the end of the year. I am 90 percent confident that we will achieve this goal,” said the founder. Some companies have already reserved work space.
>> Read here: Founder on implementing the start-up strategy: “Germany is being left behind”
How Zakaitis will ensure that the project is a success? “First, the infrastructure is very important,” his team is currently negotiating with the city about permits for cycle paths, “second, the community, and third, like-minded people from similar areas.”
From the point of view of the German founder Schloemer, the success of the venture can be measured by how well this community works. He finds the interface between the new and old economies particularly important. Schloemer is convinced that no one wants to simply work next to each other anymore, as in coworking. “These days it’s all about networking,” he says, especially between established and new companies.
“But also: Which venture capitalists are investing? Not necessarily in the building, but in the start-ups that ultimately participate on site.” Ultimately, it is also crucial for success whether the venture capitalist scene is interested in the project and settles on site.
It is also helpful to win over a particularly well-known company at the beginning and, if necessary, to provide them with work space free of charge. “A start-up that everyone knows, good speakers at the opening, then everyone wants to work there.”
The Factory Berlin, for example, was able to inspire Soundcloud early on – from Schloemer’s point of view not insignificant for the further development of the campus. Finally, Schloemer recommends his up-and-coming competitors from Vilnius to organize a selective application process: “Even if there is still space: You shouldn’t just let everyone in.
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