Latvian IT startups and investments market review Q3, 2014
Arcana Digital Group
Vision of your digital perfection
Contents Arcana Digital Group opinion
4 p.
Latvian Startups’ Achievements
5 p.
September 3 500 “Magic Buttons” from Latvia earned 87 000 USD AirDog awarded as the most fearless brand in Latvia
August
The big deal: Ask.com owners acquire Latvian Ask.fm
July
Roamer raises $1,3 million USD
New Latvian IT and Startup Companies
8 p.
September MaxTraffic will provide incentive to visitors on mobile devices August
Draugiem.lv accused of steeling idea from Infy.me Qfer discovers a brand new way of HoReCa mobile offers
July
Fastr Books offers subscription OPPO gets to App Store Top 10 downloads in less than a week
Industry development
11 p.
September 500 000 EUR will be spent on Latvian startup education, training and workshops August
First Google Glass adapted webpage launched in Latvia TechHub Riga held the first Latvian digital startup academy
July
Latvian startup experts: is application boom over? Minister of Economics with Infogr.am: how to boost startup industry development?
Global Media About Latvian Projects
16 p.
September Infogr.am adds team collaboration on creating infographics July
Kickstarter pledgers complaining: Airdog didn’t meet their expectations
Interviews and Opinions
18 p.
September Buzztale CEO forecasts, which startups will make it big New CEO of Infogr.am speaks on similarities between Google and them July
50 refusals didn’t stopped successful launch of Infy.me
Startups looking for Investment
20 p.
Investors looking for startups in Latvia
26 p.
Arcana Digital Group. Latvian IT startups and investments market review Q3, 2014
3
Arcana Digital Group Opinion support Latvian startup ecosystem development with 500 000 euros for industry events and training organization. There are certain indicators of industry growth. One of them is public scandals around one business idea. For the first time such scandal evolved in Latvian startup industry. A popular Latvian startup accused Draugiem Group of stealing their idea. This raises an important aspect of startups’ intellectual property protection.
Aleksandrs Kregers Arcana Digital Group director
Latvian startups are rapidly developing, and their quantity grows each month. In the 3rd quarter of 2014 local developers presented interesting mobile gadgets, as well as unique sports and HoReCa solutions. New startups are attracting followers and the number of their users runs up to several thousands. Some projects are now looking for additional financing options, so this is a perfect situation for risk investors. Detailed information on them is available on a new Latvian startup community source StartupHunt.lv, which focuses on local startup industry, connecting ideas to money. Startups have become an interest of Latvian government. Political leaders are discussing possibilities of state support to local startups and industry. In particular, this summer minister of Economics Vjaceslavs Dombrovskis said that government is already working on 10 tools that will help startup community. In addition, LGA will
4
Often small market players tend to ask big companies for advice. They usually have extra resources, but are lacking bright ideas. It’s important that growing startups explain their ideas and strategies to receive additional help, however at this point their idea is most vulnerable and risks be stolen and ripped off. Thus small startups can only hope for businessethics of their partners. A special attention of third quarter 2014 goes to the ASK.FM shares’ acquisition by IAC, owning such popular services as Vimeo, About.com, Ask. com, CollegeHumor, Match.com, Tinder and OkCupid. In just four years Latvian project ASK. FM reached 180 million audience and 9 million euro annual turnover. According to IAC, ASK.Fm founders will leave the company. The project will enhance its’ security to avoid unpleasant incidents. The amount of the deal, unfortunately, has not been published, but certainly it’s a significant moment in Latvian startup industry.
Arcana Digital Group. Latvian IT startups and investments market review Q3, 2014
Achievements of Latvian Startups
Arcana Digital Group. Latvian IT startups and investments market review Q3, 2014
5
3 500 “Magic Buttons” from Latvia earned 87 000 USD September, 2014 During the first 50 days 2 000 people ordered 3 500 Dimple units worth of $87 000. Almost half of the “buttons” was delivered to United States and rest to other corners of the world. There will be next batch of product during this December. Users will be able to purchase Dimple through distributors. Dimple is simple button sticker attached to your phone. It allows user to do different tasks even faster than before. For example – navigate, call someone, take a picture or open Facebook. The button can learn new tasks through the special app. It communicates with phone using NFC. To develop prototype, Dimple founder Rihards Skrubis received grant funding from Riga City council and Swedbank. Source: http://ej.uz/3ce4
AirDog awarded as the most fearless brand in Latvia September, 2014 In this year’s contest – “Most loved brands in Latvia”, award of most fearless brand received AirDog startup. Final competitors for award were Autine, Dartz, Suņubūda and Coffe Tower. AirDog won without any doubt from jury. Others were free to express their opinion on internet polls. “Size does not matter”, - describing finalists, says director of PHD Latvia Raivis Balodis, - “winners of nominations all are startups that went “all in” on business”. “Most fearless brand of Latvia” award is initiative of PHD Latvia. Award finds companies and startups that bet big on their idea. They acted boldly just with hope to succeed and influence consumer market. Source: http://ej.uz/im79
6
Arcana Digital Group. Latvian IT startups and investments market review Q3, 2014
The big deal: Ask.com owners acquire Latvian Ask.fm August, 2014 Latvian social network of questions and answers Ask.fm with an annual turnover of more than 9 million Euro, was acquired by IAC, which already owns successes like Vimeo, About.com, Ask.com, CollegeHumor, Match. com, Tinder and OkCupid. According to IAC, Ask.fm founders will leave the company. Price of this deal is still unknown. But it is known, that Ask.fm was the biggest question and answer social network with 180 million active users. Ask.fm had launched four years ago, and currently operates in more than 150 countries around the world, with the largest number of users in the United States. Every minute 20 000 users ask their questions, a mobile app was downloaded 40 million times. IAC plans to invest millions in Ask.fm and improve its security. Source: http://ej.uz/bbc_askfm
Roamer raises 1,3 million USD July, 2014 One of the Arcana Digital Group developments has attracted attention of foreign investors. Roamer received 1,3 million USD funding. Many of investors were experienced in telecommunications. One of them – Richard Frank, founder of British company Dial-a-Phone. Currently Roamer is developing as an independent project. Arcana Digital Group remains a shareholder of British Roamer Labs Ltd, which owns the company Roamer SIA. Source: http://ej.uz/f2z2
Arcana Digital Group. Latvian IT startups and investments market review Q3, 2014
7
New Latvian IT and Startup Companies
8
Arcana Digital Group. Latvian IT startups and investments market review Q3, 2014
MaxTraffic will provide incentive to visitors on mobile devices September, 2014 In the middle of September MaxTraffic improved their platform by adding support for mobile devices. The importance of mobile devices in online commerce is increasing each month. One third of ecommerce sites’ visitors worldwide browse it on their mobile devices. This is why support for tablets and smartphones was the next important step in MaxTraffic dewvelopment. MaxTraffic is a tool that analyses and changes website visitors’ behavior in order to increase sales, sign-ups and other conversions. The idea is to show to a visitor the right marketing message at the right time, thus generating an additional income. Source: info@maxtraffic.com
Draugiem.lv accused of steeling idea from Infy.me August, 2014 In early summer Infy.me presented a new application for paper business card management. A month after meeting with Draugiem.lv, they produced a very similar product”, - explains Infy.me board member Oskars Putnins (Oskars Putniņš). During the meeting, Infy.me asked for security and safety advice to Draugiem.lv experts. “They noticed an ideas’ potential success and agreed to help, but now they just cloned our product”, - says Putnins. Draugiem.lv press secretary Janis Palkavnieks (Jānis Palkavnieks) comments: “Our team has lots of ideas. The development of this particular product started six months ago. It was planned as a small additional feature to Draugiem.lv users. ” Despite this situation, Infy.me continues to work on service improvements. After the product was launched in App Store, the dozens of business cards appear in the system day by day. Source: http://ej.uz/pz7m
Latvian startup Qfer discovers brand new way of HoReCa mobile offers August, 2014 With Qfer app user can find best deals around. Qfer can find special offers from restaurants, cafes, hotels and entertainment places. Currently more than 2000 users have downloaded the app. The service is free of charge for users. Qfer has more than 70 partners who bring deals through this platform. The most interesting is how process of creating and promoting offers works. By few clicks company can create and run special offer attracting new customers in short time period. Project developers see a great potential and demand not only in Riga, but also in other European cities. Soon Qfer will launch in Sothern-Europe and later try to conquer its other parts. Source: http://ej.uz/sxrq
Arcana Digital Group. Latvian IT startups and investments market review Q3, 2014
9
Fastr Books offers subscription July, 2014 Fastr Books now offers a subscription method to their service. Users can visit catalogue with 262 Latvian, 5000 English and other languages e-books. New selection of books will not differ in prices from printed book offers in stores. Fastr already cooperates with major publications in Latvia, so the service is attractive for users who read e-books in Latvian or English on their tablets or mobile devices. Source: http://ej.uz/btj2
In less than a week OPPO sports App gets to App Store Top 10 downloads July, 2014 OPPO sports app is a unique in its’ filed. This app can help its users to find opponent or team members for sport activities. “I myself play squash and want to improve skills, but finding partner among friends is not always successful. The same partner becomes predictable after some time and it is hard to develop skill. That is how I came up with app that helps active people find partners and opponents. It is a new way to develop skill”, comments lead developer and author of OPPO app idea - Gatis Veikshins. Source: http://ej.uz/fqe3, http://ej.uz/7xap
10
Arcana Digital Group. Latvian IT startups and investments market review Q3, 2014
Industry Development
Arcana Digital Group. Latvian IT startups and investments market review Q3, 2014
11
500 000 EUR will be spent on Latvian startup education, training and workshops September, 2014 Purpose of startup support is to help them communicate with private investors and receive private funding. Using grant funds startups will get educated in business basics. Ministry also includes financial support in the form of guarantees on the organization of events, seminars and training. Support will be provided by the Latvian Guarantee Agency (LGA). The total funding amount is up to EUR 500 000, without the use of structural funds. The results of the analysis, made by the Ministry of Economy, show that yet Latvia has not developed an entire ecosystem, which would contribute to the emergence of start-ups. Lack of information about possibility of attracting private investment is often the determining factor that stops the development of potentially successful ideas. More information about seminars and Ministry decisions to support startups can be found online http://ej.uz/ooqg Source: http://ej.uz/dhdr
First Google Glass adapted webpage is launched in Latvia August, 2014 Arcana Digital Group launched the first in Latvian Google Glass adapted webpage. At the same time developed webpage – arcanaglobal.com was also the first Google glass adapted webpage in Eastern Europe. “Digital technologies offer more opportunities for consumers and businesses. Successful companies use not only traditional webpages, but also mobile versions and applications for smartphones. However, technologies are developing rapidly, and new high-tech gadget Google Glass appeared in UK and US. The new platform requires a fundamentally different approach to web development. It is necessary to understand what information is most important to be displayed on such small display,” - explains Arcana Digital Group sales director Andris Merkulovs. The next step will be the development of applications for the Google Glass, containing 50-60 features like Facebook, Twitter, Tumblr and others. Arcana Digital Group is Latvian cross-platform developer and web-based business solution company. Source: http://ej.uz/arcana-google-glass
12
Arcana Digital Group. Latvian IT startups and investments market review Q3, 2014
TechHub Riga held the first Latvian digital startup academy August, 2014 Digital startup Academy took place in Riga in the end of August, 2014. The participating teams had three days to improve their ideas and then present it to potential investors. The winner - Furnny – received tickets to the biggest technology conference in Northern Europe – “Slush”. The Digital Startup Academy was financed by Latvian Investment and Development Agency. Source: http://ej.uz/kmzf
Latvian startup experts: is application boom over? July, 2014 Many Latvian IT experts published their opinions on mobile application development at Nozare.lv. They all agree that mobile app development speed has decreased. “It is time to start looking for new aspiring directions. Application development loses its attractiveness in the eyes of investors”, - Explains Lelde Stukle, Imprimatur Capital Fund investment manager. Meanwhile, IT experts’ answer SKATIES.lv question about potential development of startup industry in Latvia. “Development of internet-based tools is gaining huge momentum. And it will only increase in near future due to great ideas that are backed up by public funding,” - says representative of Arcana Digital Group – Andris Merkulovs. “However, it is necessary to distinguish between global and local processes. Currently Latvia is behind global processes. We have to start developing a line of software solutions by international standards. Products need to be brought to already profitable markets, not to create new ones.” Source: http://ej.uz/d4mm
Arcana Digital Group. Latvian IT startups and investments market review Q3, 2014
13
Minister of Economics with Infogr.am: how to boost startup industry development? July, 2014 The representative of TechHub Riga Andris K. Berzins and founder of Infogr. am Uldis Leiterts met with Latvian Minister of economics Vjaceslavs Dombrovskis (VjaÄ?eslavs Dombrovskis). They discussed benefits that would appear if Ministry of Economics takes active participation in Latvian startup industry. Minister and IT industry representatives discussed about areas where government could help. They talked how to find affordable financing to establish international contacts, tax exemptions, reduction of bureaucracy and financial instruments to increase interest of foreign investors. In addition, idea of creating new fund-accelerator came up. The Minister pointed out that the government is already working on 10 tools that will help startups to gain traction. Among them are growth funds, loan guarantees, export credit guarantees and other benefits. Source: http://ej.uz/v3vm
14
Arcana Digital Group. Latvian IT startups and investments market review Q3, 2014
Global Media About Latvian Projects
Arcana Digital Group. Latvian IT startups and investments market review Q3, 2014
16
Infogr.am adds team collaboration on creating infographics September, 2014 Popular tool for creating infographics – Infogr.am has launched new collaboration tool called Infogr.am For Teams. Now users can create inphographics in collaborative mode. They can improve each other’s work and access full history of changes. “We noticed that many organizations are visualizing their data using infographics. Either publishers, media or non-profit organizations, we want develop the best tool for the job. We developed Infogr.am for teams so that they can collaborate on their effort to make information visual”, says Uldis Leiters, founder and CEO of Infogr.am. Currently Infogr.am has 1.2 million active members. These include popular media – Huffington Post, The Verge, Euronews and Al Jazeera. Source: http://ej.uz/2yhg
Kickstarter pledgers complaining: Airdog didn’t meet their expectations July, 2014 As previously reported, AirDog promised on Kickstarter, that if the team will collect $ 1 million, each unit will be equipped with a unique system that will be able to fly around obstacles. There were 1357 pledges, collecting $ 1,368,177 for this project. However, the expectations of supporters did not came true. They were expecting that drone would recognize and avoid obstacles automatically, but it turned out that users will need to program three-dimensional maps, mark trees, buildings and infrastructure on their own. Only then drone will avoid obstacles. AirDog launched a forty-day campaign on Kickstarter on June 16th and had originally planned to raise $ 200,000. Source: http://ej.uz/hnx7
Arcana Digital Group. Latvian IT startups and investments market review Q3, 2014
17
Interviews and Opinions
18
Arcana Digital Group. Latvian IT startups and investments market review Q3, 2014
Buzztale CEO forecasts, which startups will make it big September, 2014 Founder and Chairman of TechHub Riga, also Board member of Directors Latvian business angel’s network - LatBAN Andris K. Berzins answers questions from JLP agency. In an interview, Berzins told how he became a business angel. What is current situation in Latvia in terms of investment and how local government plays important role in startup industry. It can actually affect new startup development and make them become big. “Many startup teams has made great progress. For example, Infogr.am received financial support and continues its growth. Great success for the Cobook is that it go acquired by FullContact. There is good potential in AirDog and Selfy too ”, explains Andris K. Berzins. Source: http://ej.uz/sjfo
New CEO of Infogr.am speaks on similarities between Google and them September, 2014 New chief executive officer of Infogr.am Mikko Jarvenpaa (Mikko Järvenpää) is finn, living in San Francisco. Mikko has experience working both in small and big companies, like Google. According to new chief executive officer, Google and Infogr.am have much in common. “Both companies are tech-oriented, both want to change the world and help people. I think that main similarity is that both are driven by some kind of energy that makes them go further and change how users see data”, - says Mikko. New CEO is familiar with all the processes occurring in Infogr.am since its’ launch. How tech guy from Finland left his dream job at Google and joined Infogr.am, read more on http://ej.uz/5vaq Source: http://ej.uz/5vaq
50 refusals didn’t stop successful launch of Infy.me July, 2014 IT lecturer of Riga State College Oskars Putnins has developed a mobile application Infy.me. It solves disorganized collection of business cards. According to Putnins, idea for a startup prompted by everyday life itself. “When I started this project, I had to hear about 50 denials. People told me that this idea is a failure; it will never work and never turn into business. They kept repeating it until I showed them the finished product. Then they said exactly the opposite”, - sharing his experience, says Oskars Putnins. About how it all began, how the service works, promotion, monetization, results and plans, read the interview http://ej.uz/2ctm Source: http://ej.uz/2ctm
Arcana Digital Group. Latvian IT startups and investments market review Q3, 2014
19
Startups looking for Investment
Send an information about your startup if you are in search of investment. Email us to: info@arcana.lv
20
Arcana Digital Group. Latvian IT startups and investments market review Q3, 2014
Arcana Digital Group. Latvian IT startups and investments market review Q3, 2014
Arcana Digital Group. Latvian IT startups and investments market review Q3, 2014
PLACE FOR YOUR STARTUP Help your startup to attract investments! Send information to info@arcana.lv!
Our audience: — IT and startup industry experts — Leading European investment agencies — Private investors from Europe, Asia and America — Fund and Community Representatives
Arcana Digital Group. Latvian IT startups and investments market review Q3, 2014
25
Investors looking for startups in Latvia
Send an information about your startup if you are in search of investment. Email us to: info@arcana.lv
26
Arcana Digital Group. Latvian IT startups and investments market review Q3, 2014
Rupniecibas street 34A-3A, Riga, Latvia Phone: (+371) 200 200 24 E-mail: info@arcana.lv www.arcana.lv