Energy and AI-software shine in Baltic deeptech scene

Deep tech, once seen as a long-bet niche, is becoming the primary driver of regional investment growth.

RIGA - According to the Baltic Deep Tech Report 2025, science-driven enterprises captured half of all venture capital raised in the region last year, signaling a “maturation phase” for Estonia, Latvia, and Lithuania.

Presenting a “sneak peek” into the 2025 data, Kadi-Ingrid Lilles of Iron Wolf Capital revealed that while deep tech companies make up only 13.5% of the total startup population, they accounted for 49.5% of all funding raised in 2025.

A record year for growth

The report, a collaborative effort by Iron Wolf Capital, Startup Estonia, and Startup Lithuania, highlights a resilient ecosystem that defies broader market trends. The full report is due to be released on April 15 at a conference of Resilience Media, but Lilles represented the first details at a side-event of TechChill.

Total enterprise value for the Baltic tech sector has tripled over the last five years, and total funding reached €662 million in 2025 — a €44 million increase over the previous year.

“Truly, it feels that we are entering the execution phase, where category winners are being built,” Lilles said, noting a 79% surge in Series A rounds compared to 2024.

The rise of “Sovereign” clusters

The data identifies a clear trend toward specialisation rather than generalist growth. The region is now defined by several high-value “clusters”:

• Energy and B2B software: Each contributing over €2 billion in enterprise value.

• Robotics: A close third with €1.1 billion.

• Health Tech: Showing a massive 800% growth over the past five years.

A significant portion of the narrative focused on the “Security and Resilience” vertical. Despite many startups operating in “stealth mode” due to the sensitive nature of their work, the report identified 271 startups in this space, contributing more than 15% of total regional funding.

“A clear dual-use flywheel is emerging with verticals like energy security and robotics showing rapid growth, enabling the development of a modern defence stack indirectly through commercial deep tech, similar to Israel or Ukraine,” Lilles said.

Capital regionalisation: The retreat of US and Asian investors

In a notable shift in the geopolitical investment landscape, the report found that capital sources are becoming increasingly localised. Investment from US and Asian sources has declined significantly, while domestic Baltic investment has jumped by 240% over the last three years.

“Capital is regionalising for the better or for the worse,” Lilles observed. “Domestic investments were up as much as 240%... everything that the local VCs have been doing in order to support local ones is having a significant impact”.