A new industry report covering 741 funding rounds across Estonia, Latvia and Lithuania shows a maturing venture ecosystem where fewer, larger deals, experienced founders, and growing international interest are reshaping early-stage investment.
Baltic startups raised more capital in 2025 than in any previous year, reversing two years of post-peak contraction. That is the headline finding of the Baltic Startup Funding Report 2025, published by FIRSTPICK and Practica Capital using transaction-level data from more than 62 per cent of all pre-seed and seed rounds closed across the region over six years.
The picture is not simply one of recovery, but towards larger individual rounds, higher-quality founding teams, and a market increasingly shaped by what investors are willing to back, rather than how much capital is available.
Fewer rounds, bigger cheques
Total pre-seed funding grew by 42 per cent year-on-year despite a decline in deal count, leading to larger average round sizes. At the seed stage, a record €56.5M was deployed, with average ticket sizes stabilising at around €2M across the region.
Estonia dominated growth-stage activity, driven by larger transactions from Pactum, Blackwall, and Starship, while Lithuania’s Cast AI closed a €98M Series A led by Index Ventures.
Latvia saw meaningful structural improvement following the launch of three new domestic early-stage funds, which together brought more than €60M in fresh capital to an ecosystem that had faced a bottleneck around first-cheque availability.
AI and defence agenda
Artificial intelligence dominated capital allocation at every stage — from application-layer generative AI tools to cloud infrastructure and AI-enabled biotech.
Defence and dual-use technologies were a notable secondary theme, particularly in Estonia, where the region’s established strengths in cybersecurity and digital infrastructure are translating into growing investor appetite for mission-critical startups. Fintech, once the dominant Baltic sector, continued to grow.
For the first time, the report published detailed data on who is getting funded. Around 78 per cent of backed founders were working within their prior professional domain, 77 per cent had prior team leadership experience, and half had previously founded a startup.
The gender imbalance remains stark — approximately 90 per cent of funded founders are men — though 23 per cent of VC-backed startups include at least one female co-founder, marginally above the European average.
Foreign capital is flowing in, with exits to support
In 2020, foreign investors participated in just 20 per cent of Baltic deals. By 2025, that figure had risen to 43 per cent.
Tier-one funds, including Earlybird, Dawn Capital, Balderton, and Index Ventures all participated during the year, predominantly at Series A and above — bringing larger cheques, credibility, and global networks alongside their capital.
The number of exits across the Baltics doubled in 2025, making it the strongest year on record. Lithuania drove much of the activity with 25 exits. Estonia’s Ready Player Me — a cross-game digital avatar platform backed by a16z and Plural — was acquired by Netflix. As more companies from the 2018–2021 founding cohort reach exit maturity, there’s more money to be put back into the ecosystem through successful liquidity events.
With nine new Baltic-focused funds launched in 2025, bringing approximately €300 million in fresh capital to the region, the structural outlook is more positive than at any point since the 2021–2022 peak.
