Investor Considers Georgia Underserved by Nordic Startups

Georgia is becoming ever more present on the radar of foreign investors and startups. The tourism industry’s rapid growth in the country has become a major factor for why investors see Georgia as “currently underserved” by Nordic startups.

In recent years, Georgia has quickly distanced itself from its image as a former Soviet Republic. Once relatively unknown to tourists, the country’s tourism took off in 2012 when tourism jumped from 2.8 million visitors to 4.4 million. In 2017, that figure stood at 7.5 million, 18% higher than 2016.

Some Nordic startups are beginning to focus their eyes on the Georgian tourism market. Guide.me hopes to tap into the tours and activities sector, estimated to be worth $150 billion globally with an app that sends tourists location-based push notifications about local experiences as they walk around a town. Although the project is still in its concept phase, it shows how technology could potentially be used to transform the experience for tourists in Georgia.

Georgia’s booming tourism industry led Estonian investment partner at Change Ventures, Yrjö Ojasaar, to label Georgia “underserved” by Nordic startups. “Many of them [Nordic startups] consider it outside their target region,” he said. Having visited Georgia four times in the past two years, he considers the local adoption of new technologies and solutions to be “very rapid and scalable.”

The Estonian unicorn Taxify is an example of potential success for startups in Georgia. Launched in 2017, Taxify has become one of the leading ride-hailing apps in Tbilisi. They have demonstrated the potential to work together with Georgia partners to achieve great results. After a strong launch in Tbilisi, the company also began operating in Baku in spring of the same year.

Tbilisi, as the economic hub of Georgia, is an especially attractive market to Nordic startups. Indeed, around one third of all 3.7 million Georgians live in the city, making the capital larger than Stockholm and Copenhagen, and almost twice the size of Helsinki or Oslo, although the economy is still significantly smaller.

As a compact market with relatively cheap living costs, Georgia offers international startups a large amount of convenience and potential. As seen in the startup capital Berlin, startups can bring a huge amount of money to the local economy. Although often accused of being a main fuel of gentrification, they could help modernize the Georgian economy, ensuring that it continues to grow.

By Amy Jones