The Baltic states are rapidly emerging as one of Europe’s leading deep tech centres, with new figures showing the sector has expanded faster than both the United States and major European innovation hubs over the past four years, Labs of Latvia, the country’s investment promotion agency, announced on May 20.
According to the Baltic Deep Tech Report 2025, published by Iron Wolf Capital, Startup Estonia, Startup Lithuania and WALLESS, the combined enterprise value of Baltic deep tech firms climbed from €2.6bn in 2021 to €7.5bn in 2025, a 2.88-fold increase unmatched elsewhere in Europe.
The report highlights a dramatic shift in the region’s startup landscape, where deep tech has evolved from a niche segment into the dominant investment category. In 2021, the sector accounted for less than one fifth of startup funding across the Baltics. By 2025, almost every second euro invested in regional startups was directed towards deep tech ventures.
Latvia recorded the fastest growth among the Baltic states, with enterprise value rising 3.8 times during the period. Estonia continued to dominate funding volumes, securing more than half of all Baltic deep tech investment rounds in 2025, while Lithuania delivered the region’s only €100mn-plus deal through CAST AI’s $108mn Series C round.
“Deep tech is no longer a niche within the Baltic startup ecosystem – it’s evolving into a focused deep tech region, defined by technical talent, capital efficiency, and growing regional backing, with strong momentum across energy, AI, robotics, and increasingly, defence, security, and resilience. Our conviction is simple: the next wave of enduring companies will be built here,” said Kasparas Jurgelionis, managing partner at Iron Wolf Capital.
Defence and dual-use technologies emerged as one of the report’s strongest themes. The sector attracted €104mn across 47 funding rounds in 2025 and now represents more than 15% of all Baltic startup financing.
Researchers identified at least 271 defence, security and resilience startups operating across the region, with autonomous systems and robotics singled out as key growth areas, particularly in Latvia.
The report also found that European investors now dominate Baltic deep tech financing, accounting for 84% investment in 2025, signalling a sharp decline in reliance on US capital.
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