Comparative analysis of Latvian, Lithuanian, and Estonian Crowdfunding Platforms? Cross-border Financing Practice


Crowdfunding is a method to obtain money from large audiences, where each individual provides a relatively small amount of fund, instead of raising large sums from a small group of sophisticated investors (Belleflame et al., 2014). Such funding is conducted by means of online platforms, where business activities are typically funded by a large number of people and organisations. The recent study of alternative finance conducted by Cambridge Centre for Alternative Finance (Ziegler et al., 2021) reported significant volumes of crowdfunding all over the Europe.

However, despite its crucial role and functions, crowdfunding remained unregulated in most of the Member States, where some of them introduced national rules to regulate their crowdfunding platforms, while others left some aspects of the activity unregulated. Some recently conducted studies showed that this leads to the fact, that crowdfunding platforms operate mainly in the country of registration (Wenzlaff, et al., 2020). 

Considering this, the European Union Regulation on European crowdfunding service providers for business, hereinafter – the Regulation, which should be adopted by each Member State as of November 2021, was an expected event, since one of two main goals of it is fostering of cross-border financing in the countries (European Parliament.., 2020). Authors of the Regulation suppose that cross-border crowdfunding service provision will be stimulated, if any crowdfunding platform, registered and duly licensed in one Member State will be eligible to provide funds to business projects, originating from other Member States. The Regulation does not regulate the provision of cross-border financing itself, but this is considered to be the outcome of common harmonised crowdfunding rules for all Member States. (The rules refer to financial return-based crowdfunding, both lending-based, and investment-based (Discloser (1).

Meanwhile, the results of the research conducted by Cambridge Centre for Alternative Finance have shown high performance of cross-border financing of crowdfunding platforms of the Baltic States (Ziegler et al., 2021). However, most of the available studies analyse the region in a whole, despite the fact that the countries perform various level of cross-border financing, since they differ significantly in the sense of crowdfunding regulatory barriers. Thus, it could be stated that there remains a paucity of evidence on the phenomenon of cross-border financing performed by the countries (and among the countries) of the Baltic States – Latvia, Lithuania, and Estonia, as well as in-depth analysis of the reasons of the performance.


Сrowdfunding, cross-border financing, Latvia, Lithuania, Estonia, the EU regulation on crowdfunding

Research goal

The goal of the paper is to analyse the practice of crowdfunding cross-border business financing, formed under the existing national regulatory framework, conducted by crowdfunding platforms of three Baltic States – Latvia, Lithuania, and Estonia. The following research tasks were advanced to reach the set goal:

  • to reveal crowdfunding platforms registered in Latvia, Lithuania, and Estonia;
  • to systemize the platforms by their business models, in order to delineate those, which act in business financing solely;
  • to study platforms’ countries of service’s provision.

Main method

Since the paper aims to develop initial evidence about the cross-border business financing practice of crowdfunding platforms registered in Latvia, Lithuania, and Estonia, the analysis of the cross-border financing practice was conducted in structured form, where the division by crowdfunding business models was implemented. Therefore, a combination of descriptive research method, comparative analysis, synthesis, and legal acts’ analysis was implemented in the paper.

Main results

Data and limitations

When studying phenomenon of crowdfunding, the first core issue to be addressed is data source identifying. In the circumstances of absence of common regulation, which means that there is no any common list of the EU platforms eligible for the service rendering. To address the issue, a systemized approach, namely, the analysis of  legal acts of the countries were used to reveal required authorisation’s actions of the platforms. By this, the issue of revealing of some initial lists of legal entities for further analysis is addressed partially (due to absence of the relevant lists in case of Latvia). Therefore, the lists used for the analysis were:

for Estonia – a list of legal entities licensed by Estonian Finance Intelligence Unit (FIU) eligible “for acting as a financial institution” (Register of Economic Activities, 2021);

for Lithuania – a list of legal entities licensed by the Bank of Lithuania as a crowdfunding platform operator (Bank of Lithuania, 2021 a), and as a peer-to-peer lending platform operator (Bank of Lithuania, 2021 b);

for Latvia – commercial advertising and platforms’ comparison on-line resources.

Focusing on the number of revealed platforms registered in Latvia, seven biggest platforms (upon the funding volumes indicated on the platforms’ web-pages) from available Estonian and Lithuanian lists were chosen for further analysis. Therefore, the research is not free from limitations, since seven platforms of each country (21 platforms in total) have been reviewed. All the reviewed platforms are of financial return-based crowdfunding of various business models (both lending-based and investment-based). Donation-based and reward-based crowdfunding platforms are not in the scope of this paper.

Comparison of crowdfunding platforms of Latvia, Lithuania, and Estonia by their business models and countries of funded projects

During the analysis of the platforms of Latvia, Lithuania, and Estonia, four crowdfunding business models have been delineated. In order to render more structured comprehension of the types revealed, the following summarised scheme of the business models is suggested in Figure 1.

Due to the fact that the Regulation’s (Discloser, (2) emphasises that “the provision of crowdfunding service generally involves three types of actors: the project owner that proposes the project to be funded, investors who fund the proposed project, and an intermediating organisation in the form of a crowdfunding service provider that brings together project owners and investors through an online platform”, for the sake of conducting the classification, we adhere to the same principle. For the scheme, three major participants of the crowdfunding process, and two criteria, namely, a type of addressees of financing, and a type of security provided by the addressees of financing (collateral or equity), were delineated.

Figure 1. Summarised scheme of crowdfunding business models in Latvia, Lithuania, and Estonia
Figure 1. Summarised scheme of crowdfunding business models in Latvia, Lithuania, and Estonia. Source: developed by the author based on the overview of 10 Latvian, 18 Lithuanian, and 10 Estonian crowdfunding platforms

Figure 1 summarises the results of the reviews of the platforms and delineates logical constructions of each business model. The typology of crowdfunding business models was provided in order to substantiate the use of first two models for further analysis (Table 1).

Table 1. 7 biggest by funding volume crowdfunding platforms of Latvia, Lithuania, and Estonia by their business models and countries of services, 2021.
Table 1. 7 biggest by funding volume crowdfunding platforms of Latvia, Lithuania, and Estonia by their business models and countries of services, 2021. Source: developed by the author

Commenting on the results of Table 1, it should be noted that the countries of financing were revealed by reviewing of active and funded projects at the platforms, as well as by studying their terms and conditions for funding (for borrowers / projects’ originators). The crowdfunding business models (as it shown in Fig.1), where consumer crediting is not involved in the business scheme, were delineated Thus, the countries of platforms’ services for business models 1 and 2 were analysed. The analysis showed that the biggest platforms of Latvia have the third business model of crowdfunding, which means that they render their services via consumer crediting companies. Therefore, the countries of activity of the platforms, registered in Latvia, were not analysed. The case of platforms registered in Estonia showed that they intensively provide their services in Latvia, but not in Lithuania. The only one platform, registered in Estonia which provides its services in Lithuania, is duly licensed in Lithuania (have a separate legal entity registered in Lithuania) and holds a license from the Bank of Lithuania. Others Estonian platforms do not address Lithuanian business. The analysis of the Estonian platforms showed that they render their services for Latvian business, providing significant volume of crowd-funded financing.

Main conclusion

The results of the present study showed that most of the Lithuanian platforms provide their services mostly in Lithuania (the only country from the three Baltic States, where crowdfunding is regulated). Moreover, the Lithuanian platforms significantly lag behind the Estonian and Latvian crowdfunding platforms by funding volumes. Whilst, the Estonian crowdfunding providers intensively address projects both in Latvia, and in Estonia, they do not address projects in Lithuania (with the exception of one Estonian platform, which is duly licensed in Lithuania to have rights to provide its services in the country). These results allowed to conclude that absence of any specific regulatory barriers in Estonia and Latvia fostered the growth of crowdfunding platforms in the countries, as well as cross-border provision of their business financing services.


  1. Bank of Lithuania. (2021, a): Crowdfunding platform operator,, last accessed 2021/07/19
  2. Bank of Lithuania. (2021, b): Peer-to-peer lending platform operator,, last accessed 2021/07/19
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Oksana Katalkina, mg.oec. Faculty of Business, Management and Economics,

University of Latvia, Riga, LATVIA,

Last modified: 2021-10-19