Baltic investments grew 20% in 2025, pre-seed investments in Estonia more than doubled -report

Practica Capital and FIRSTPICK published annual funding report for the region

Investments in Baltic startups grew by a total of 20% in 2025, with AI-related investments dominating capital allocation across all stages, according to the 2025 investment report from Practica Capital and FIRSTPICK.

In addition to the AI boom, defence, energy, and infrastructure-adjacent technologies gained traction.

"Structurally, the Baltics are starting to specialise. Lithuania has become the region’s company-formation engine, Latvia is unlocking early-stage capital and fixing the first-cheque gap, and Estonia concentrates scale capital and deep tech + defence tech. Together, that creates a full startup lifecycle across three markets - a clear sign the ecosystem is maturing,” said Tim Vaino, investment manager at Practica Capital.

Estonia did experience a decline in the funding rounds raised in 2025 but we did see some rare but welcomed increase in growth capital rounds most notably Pactum’s $54 million Series C funding round, Starship’s $50 million Series C round and Blackwall’s €45 million Series B raise. The report also signifies that Pre-seed activity has found its footing again after its 2024 downturn and Estonia continued to lead the region in average seed round size.

Defence, energy, and hardware-adjacent software were the darlings of investor interest as deep tech and dual-use companies took a significant share of deployed capital, with companies like Frankenburg, Wayren and LendurAI flying the blue, black and white in that particular category.

After strong revenue growth and continued M&A activity the ecosystem is showing positive signs of maturity with its proof of a sustained pipeline of technically complex, scale-ready companies and experienced founder-led companies with a willingness to build.

You can read the full report here.