The Baltic high-tech sector is growing faster than in the U.S., the EU, and the Nordic countries; the main drivers are energy, robotics, and defense

Data from the Baltic Deep Tech Report 2025 shows that a regional ecosystem has emerged here over the past four years. Its startups have attracted nearly three times as much funding. Overall, the sector has grown faster than in the U.S. and any other comparable region in Europe. Furthermore, the Baltic states are increasingly solidifying their position as a European hub for dual-use and defense technologies.

Between 2021 and 2025, the value of Baltic science-intensive technology startups has increased 2.88-fold—from €2.6 billion to €7.5 billion. No comparable region in Europe has matched the Baltic states’ growth rate during the same period. Ecosystems in the Nordic countries and Central and Eastern Europe (CEE) largely stagnated, while in the DACH region—Germany, Austria, and Switzerland—growth was 1.16 times, despite the fact that the region as a whole is twenty times larger. The only region that could compete in terms of growth rate was the U.S., where the value of knowledge-intensive technology startups increased 2.26-fold. However, the Baltic states still outperform it.

The value of Latvia’s knowledge-intensive technology startup ecosystem grew 3.8-fold between 2021 and 2025, marking the highest growth rate over a five-year period across all Baltic states.

Half of all investments in startups go to knowledge-intensive startups

In 2021, knowledge-intensive technology startups attracted 17.5% of the total startup funding raised in the Baltic states. By 2025, this figure has risen to 49.5%. This means that nearly half of all investments in the Baltic startup ecosystem go to science-intensive technology startups. In total, over the five-year period, they have attracted investments amounting to 1.87 billion euros. Across the region, a total of 6.44 billion euros has been invested in startups.

“Knowledge-intensive technologies are no longer a niche within the Baltic startup ecosystem. Rather, we can speak of the emergence of a technology region characterized by talent availability, capital efficiency, and growing regional support. Particularly strong growth is observed in the fields of energy, artificial intelligence, and robotics, and increasingly in the defense and security sectors as well. Our conviction is simple—the next wave of significant companies will be here in the long term,” says Kasparas Jurgelionis, Managing Partner at Iron Wolf Capital.

Local Investors

The third key finding concerns the origin of capital. In 2025, 84% of investments in Baltic knowledge-intensive technologies came from local or European investors. This marks a fundamental shift away from U.S. capital, which had previously been the dominant source. Local investments have grown by 238% over the past three years.

Data from the Baltic knowledge-intensive technology review also shows that existing players in the ecosystem are growing—in 2025, Series C investment rounds dominated, accounting for 46% of all capital raised. The volume of seed (Series A) investment rounds increased by 79%. Meanwhile, investment in pre-seed stage startups has fallen by nearly half, signaling that investors are focusing on proven companies rather than investing in new market entrants at the previous pace.

A closer look at the verticals reveals that the value of energy and software companies in the Baltic region each exceeded the 2 billion euro mark. The value of robotics startups stands at 1.1 billion euros. The value of health tech startups is seemingly smaller—€476 million—but it has grown the fastest over the past five years—by 497%. This is the next vertical that could potentially join the ranks of the top science-intensive tech startups.

Defense is on the rise

The defense and security sector has now become one of the defining segments of the Baltic ecosystem. In 2025, it attracted €104 million across 47 publicly announced funding rounds, accounting for 15.4% of all funding in startups in the region. The report identifies 271 companies in this sector—a figure that represents a conservative estimate, as the true extent of activity cannot be determined due to the sector’s secrecy. The volume of dual-use technologies is also growing in the energy, robotics, and autonomous systems sectors.

“In recent years, the activity of defense startups in Latvia has increased significantly, and we can now say that a startup ecosystem in the sector is developing quite rapidly. This is driven by both the growing demand for defense technologies and targeted support from national and international initiatives, particularly from NATO and the European Union. Latvia’s current strength lies in its activity in early-stage startups—new companies, teams, and technology areas are emerging, particularly in the dual-use sector. “This means that innovations are often developed with a focus on ensuring the product can be used in both the civilian and defense sectors,” notes Andris Baumanis, head of the UniLab Defence accelerator.

The largest investment round in Latvia was secured by the startup “Aerones,” which raised $62 million in 2025. This accounted for 75% of all funding for the country’s knowledge-intensive technology startups and was one of the largest investment rounds in the robotics sector in the Baltic states. Funding raised by Estonian science-intensive technology startups accounted for 56% of total funding for science-intensive technology startups in the Baltic states—70 out of 106 investments were in startups based in Estonia. In Lithuania, meanwhile, in 2025, the startup “CAST AI” secured the only investment exceeding 100 million euros. In its Series C funding round, it raised 108 million U.S. dollars. This is the second-largest investment round in the history of Lithuanian startups.

The report can be downloaded here: https://www.ironwolfcapital.com/report

About the report
The data used in the Baltic Deep Tech Report 2025 is based on Dealroom’s proprietary database, supplemented by data from official ecosystem databases and interviews with ecosystem representatives. The data reflects the market situation as of March 17, 2026. The report includes data on 930 deep tech startups in Estonia, Latvia, and Lithuania. A special section is dedicated to Baltic defense technology startups. The report also includes an overview of the Polish defense and high-tech ecosystem.

About the partners who produced the report
“Iron Wolf Capital” is a venture capital fund based in the Baltic states that focuses on investments in startups in the fields of high-tech, artificial intelligence, and defense and security. The fund has offices in Vilnius, Tallinn, Warsaw, and London. In 2025, the fund launched its €100 million “Fund II.”

“Startup Estonia” is an initiative of the Estonian government under the auspices of the Enterprise and Innovation Agency, which develops Estonia’s startup ecosystem with a strategic focus on science-intensive technologies and science-based entrepreneurship.

“Startup Lithuania” is a national initiative of the Innovation Agency Lithuania under the Ministry of Economy and Innovation, which strengthens the startup ecosystem by implementing strategic growth initiatives and building international connections.

“WALLESS” is a full-service law firm in the Baltic States that advises founders, investors, and companies on investment attraction, cross-border transactions, and regulatory matters.

Translated with DeepL.com (free version)