Startup funding in the Baltics improved in 2025, but the market did not return to the easy-money conditions of earlier years; the Baltic Startup Funding Report 2025 shows a recovery in capital with continued caution in dealmaking – and Estonia standing out in larger early-stage rounds rather than in sheer deal volume.
Estonia raised €293 million in total funding in 2025 and accounted for 73% of all Baltic Series A rounds, according to the report. Estonian pre-seed investment also doubled year-on-year. Across the region, early-stage capital (pre-seed to Series A) rose versus 2024, while the number of deals changed only slightly. In plain terms, investors wrote bigger cheques, but to fewer companies.
That pattern is visible across stages. Average round sizes increased in pre-seed and seed, and Estonia remained the most active Baltic market at Series A level. The signal for founders is straightforward: capital is available, but the threshold is higher. Investors are looking for traction, operational discipline and clearer paths to scale earlier than they did during the boom period.
Most funded founders had prior experience
The founder data in the report supports that shift. Most funded founders had prior experience in their sector, most had led teams before, and a large share were serial founders. The funding environment is therefore rewarding execution history and domain credibility, not just pitch quality.
The report also documents a continuing gender imbalance. Women make up about 11.5% of founders in the Baltic sample. It adds that 23% of VC-backed startups in the region include at least one woman co-founder, while 77% are all-male founding teams. That is still uneven, but the report notes it is slightly above the 2025 global benchmark of 20% it cites.
Defence startups attract funding
Another clear development is sector allocation. Funding is moving toward defence-related technologies, energy and AI, including companies with infrastructure-heavy or dual-use applications.
Estonian companies highlighted among notable rounds include Pactum, Blackwall, Starship, Frankenburg, Wayren and LendurAI. The mix suggests a pivot from generalist software toward products tied to industrial, security and strategic demand.
International investors now play a larger role in that shift. In 2025, 43% of Baltic deals included at least one foreign investor, up from 20% in 2020, with the strongest foreign participation in larger rounds. For Estonian startups, that expands access to capital and networks, but also raises the competitive benchmark to broader European standards.
Regionally, the report describes differentiated momentum rather than one common trajectory. Lithuania recorded strong growth in early-stage totals and exits. Latvia improved first-cheque access through new funds and support mechanisms. Estonia remained strongest in larger early-stage rounds and Series A activity.
Exits increased across the Baltics in 2025, although liquidity remains uneven and timelines are still long outside top-performing companies.
Overall, the report points to a healthier but stricter market. Estonia’s position remains strong, especially where round size and scaling readiness matter most. But the message of 2025 is not renewed exuberance. It is selectivity: better-prepared teams, bigger rounds, fewer bets.
