Venture capital flowing into Baltic startups has held up better than many regional investors expected this year, with funding totals through the first three quarters running roughly in line with 2025 despite a broader European venture slowdown that has hit later-stage rounds particularly hard.
Where the money is going
Fintech and defence-adjacent technology continue to attract the largest share of Baltic venture funding, a pattern that has held for several years but has become more pronounced since 2022. Cybersecurity startups, in particular, have seen growing investor interest, a trend Kristaps Zaķis, a partner at Riga-based venture fund TechBaltic Ventures, links directly to the region’s heightened focus on hybrid threats. “Investors increasingly see Baltic cybersecurity founders as having genuine, lived expertise in problems the rest of Europe is only starting to take seriously,” he said.
Why early-stage funding has held up better than late-stage
The resilience is concentrated mostly in seed and early-stage rounds, where Baltic funds and regional angel investors remain active even as international late-stage investors have pulled back across Europe generally. Later-stage Baltic companies seeking larger growth rounds report a tougher fundraising environment, often needing to look to investors in London, Berlin or the United States to close larger deals.
The talent question
Founders and investors alike point to talent availability as an increasingly important differentiator for the region. Strong local technical universities, relatively lower salary costs than Western Europe, and a growing base of experienced founders from earlier successful exits have combined to make Vilnius, Riga and Tallinn increasingly credible bases for technical teams, even when headquarters or primary markets sit elsewhere. Estonia continues to punch above its weight in absolute funding terms relative to its population, a legacy investors trace back to the country’s early digital governance reputation and a steady stream of successful exits.
What could change the picture
Currency dynamics add a further layer of complexity this year, with the stronger euro affecting how far international funding rounds — often denominated in dollars — stretch once converted, an issue also shaping the calculations of Baltic exporters navigating the same currency shift this autumn. Lithuania and Latvia have narrowed the gap somewhat this year, with both countries recording their highest number of seed-stage deals since regional tracking began, even as the average deal size across the Baltics remains meaningfully smaller than comparable Nordic or Western European ecosystems. Government-backed funds have played a growing role in cushioning the pullback from international late-stage investors, with state innovation agencies in all three countries expanding co-investment programmes designed to keep promising companies from having to relocate headquarters abroad simply to access larger funding rounds. Founders describe these programmes as helpful but not a full substitute for deeper, purely private capital markets, which remain smaller in the Baltics than in Western Europe relative to the size of the local startup ecosystem.
