The world has a few hotspots of drone industry growth. There’s of course Silicon Valley, but also lesser known places that have made waves, like Reno, Nevada, and North Dakota. But here’s one you probably haven’t been to: Latvia.
The tiny country in the Northern European Baltic region is home to less than 2 million citizens. But it’s also home to nearly two dozen drone companies — a huge ratio compared to the tiny population.
Among the drone companies proliferating in Latvia include AirDog, which designs a consumer-focused, action-sports drone that “follows-you” based on a device you wear on your wrist. Another company, Aerones, builds drones for a variety of enterprise functions including delivery, monitoring, firefighting, and wind turbine-cleaning. And agricultural drone maker AirBoard designs powerful drones that can carry pesticides to more accurately spray over fields.
“Latvians have this innate expertise in hardware engineering,” said Elviss Straupenieks, CEO of AirBoard.
“Latvians are people who like to build stuff themselves,” he said. “Just look at their houses. Rather than buy stuff, people like to get their hands dirty and make stuff for themselves.”
Straupenieks said that culture of do-it-yourself engineering stems from the country’s education system.
“It’s an engineering-focused ecosystem,” he said.
While the country has a swath of drone companies, that’s not the only type of technology industry that is growing in Latvia. Everything from self-driving cars to t-shirt startups have been launched in the country.
And the country is generally tech-forward. The national airline of Latvia, airBaltic, has been accepting bitcoin since 2014.
“The government has put a lot of financing and regulations to support not drone companies, but all companies,” Straupenieks said.
Some of that work includes passing legislation that lays out a tax regime specifically for startups so they can save on social and income tax. Visiting entrepreneurs can apply for a “startup visa.” And it has granted €15 million in accelerator funding for pre-seed and seed investments.
Straupenieks said the Latvian government reimburses him 70% of travel costs to pitch his company in San Francisco.
The country also recently signed an agreement with its Baltic neighbors to develop an experimental 5G cross-border corridor where self-driving vehicles can be tested.
But that said, Straupenieks is pitching his business in the U.S., because while he said his home country is a great place to launch a business, it’s not a viable market to do business.
“It’s a really good place to hire an engineering team and develop a product, but it’s about expanding globally,” he said. “Latvia itself is not a viable market for business. It’s a good technical center for teams, but you eventually need to expand.”