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From grand infrastructure projects to DefenceTech innovations and beyond, the Baltic region is one of Europe’s innovation hotbeds right now. To support that, Europe is muscling up more capital.
This week, the European Investment Fund (EIF) has partnered with Estonia, Latvia and Lithuania to launch Baltic Innovation Fund 3 (BIF 3), a €225M initiative aimed at strengthening the region’s private equity and venture capital market. The fund will target growth-stage businesses across the Baltic states, with expectations to mobilise up to €700 million in total investments.
Structure and investment strategy
The EIF will commit €75 million, whilst each Baltic country contributes €50 million through their respective national promotional institutions. The fund is designed to support eight to 11 funds over five years, with approximately 70% allocated to private equity growth strategies and the remainder to late-stage venture capital. Up to 20% of investments will be dedicated to climate-aligned projects.
The EIF will serve as fiduciary manager, handling fund selection, due diligence and governance.
BIF 3 follows two previous iterations that have demonstrated strong results since 2013. The first two funds mobilised more than €1.19 billion for regional companies and attracted over €900M in private capital. In Estonia, EIF-backed companies through fund partners include such standout success stories as Veriff, Bolt, Pipedrive, Starship Technologies and Wise.
“The Baltic region has shown remarkable resilience and a strong appetite for innovation,” said Marjut Falkstedt, EIF Chief Executive. “Building on our very successful prior collaboration, we’re looking to deepen the market with long-term capital that helps high-quality companies scale and realise their ambition.”
National Partners
Estonia’s contribution comes through SmartCap, the state-owned national fund manager that oversees €500 million across three strategic mandates including venture capital, green technology and defence.
“We are committed to ensuring that our region’s most promising companies have access to the growth capital they need to compete on the global stage,” said SmartCap CEO Sille Pettai. “The new fund is a clear signal to private investors that the Baltics remain an attractive and resilient market.”
In Latvia, ALTUM, the state development finance institution, will be implementing the projects, while in Lithuania it’s ILTE, the national development bank.
