Baltic deep tech outpaces the US, EU, and Nordics, driven by energy, robotics, and defence

Newly published data from the Baltic Deep Tech Report 2025 shows a regional ecosystem that has nearly tripled its share of startup funding in four years, grown faster than the United States and every comparable European region, with Estonia accounting for 56% of all Baltic deep tech funding and emerging as the region’s leading hub for dual-use and defence technologies.

Iron Wolf Capital, Startup Estonia, Startup Lithuania, and WALLESS today published the Baltic Deep Tech Report 2025, the third annual edition of the region’s most comprehensive data-driven assessment of its deep tech startup economy. Where the first two editions tracked an emerging trend, this year’s report documents something more definitive: deep tech has moved from a niche vertical to the defining force of Baltic innovation, and defence technology has emerged as its fastest-accelerating dimension.

Between 2021 and 2025, the enterprise value of Baltic deep tech startups grew 2.88 times from €2.6B to €7.5B. No comparable European region matched Baltic growth. Nordic and CEE ecosystems remained largely flat, while DACH, despite being roughly twenty times larger, grew only 1.16x. The only benchmark that comes close to Baltic growth is the United States at 2.26 times, which the Baltics also outpaced.

In 2021, deep tech accounted for 17.5% of all funding for Baltic startups. By 2025, that share had reached 49.5% – nearly every second euro invested in the Baltic startup ecosystem now flows into deep tech. Across the full five-year period, deep tech startups raised €1.87B of the €6.44B deployed region-wide.

“Deep tech is no longer a niche within the Baltic startup ecosystem – it’s evolving into a focused deep tech region, defined by technical talent, capital efficiency, and growing regional backing, with strong momentum across energy, AI, robotics, and increasingly, defence, security, and resilience. Our conviction is simple: the next wave of enduring companies will be built here,” said Kasparas Jurgelionis, Managing Partner at Iron Wolf Capital.

A third major finding concerns the source of capital. In 2025, 84% of Baltic deep tech investment came from domestic or European investors, representing a fundamental shift away from dependence on US capital. Domestic investment has grown 238% in three years. The Baltic deep tech story is now a European capital story, not a transatlantic one.

The funding data also shows an ecosystem growing in depth and concentration. Series C rounds dominated Baltic deep tech in 2025, accounting for 46% of total capital raised. Series A activity surged 79% year-on-year. Pre-seed activity, meanwhile, nearly halved, signalling that capital is concentrating behind proven companies rather than spreading across new entrants at the same pace as before.

Among verticals, energy and enterprise software each crossed the €2B enterprise value mark, with robotics at €1.1B. Health, though smaller at €476M, posted the fastest five-year growth rate at 497%, signalling the next vertical likely to break into the top tier. 

Defence, security, and resilience (DSR) emerged as one of the Baltic ecosystem’s defining sectors in 2025, reaching €104M across 47 publicly announced funding rounds and accounting for 15.4% of all startup funding. The report maps 271 DSR startups – a figure described as a floor, not a ceiling, given the sector’s significant stealth activity – and highlights growing dual-use momentum across energy, robotics, and autonomous systems. Estonia is the dominant force in Baltic DSR, accounting for 63% of rounds and 87% of capital raised in the vertical, and ranking 7th in Europe for VC funding in the defence sector, ahead of countries with ten times its population.

Country-level highlights include Estonia accounting for 56% of Baltic deep tech funding across 70 of 106 rounds, with the largest rounds coming from energy, robotics, and security. Latvia’s Aerones accounted for 75% of the country’s entire deep tech funding total with a $62M raise in June 2025, while Lithuania contributed the region’s only €100M+ round with CAST AI’s $108M Series C, the second-largest funding round in Lithuanian startup history.

“Deep tech in Estonia is clearly on the rise. Nearly half of all startup investments now go to deep tech companies – an impressive achievement given their modest share of the overall startup landscape. It is clear that the Baltic region is only at the beginning of what we can achieve,” noted Vaido Mikheim, Head of Startup Estonia.

The fresh report can be further read and downloaded at ironwolfcapital.com/report.

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About the report

The Baltic Deep Tech Report 2025 draws on Dealroom’s proprietary database, supplemented by official ecosystem databases and interviews with ecosystem representatives. Data reflects market conditions as of 17 March 2026. The report covers 930 deep tech startups across Estonia, Latvia, and Lithuania, and includes a spotlight on Baltic defence tech startups as well as a regional spotlight on Poland’s defence and deep tech ecosystem.

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About the partners

Iron Wolf Capital is a Baltic-based venture capital firm focused on deep tech, artificial intelligence, and defence, security, and resilience, with presence in Vilnius, Tallinn, Warsaw, and London. In 2025, the firm launched its €100M Fund II.