The second edition of the Baltic Deep Tech Report, launched at the Latitude59 startup conference in Estonia, paints a vibrant picture of the region’s Deep Tech, AI, and Climate Tech startup landscape. Co-authored by dealroom.co and Iron Wolf Capital, with contributions from Startup Estonia, Commercialization Reactor, and WALLESS, the report unveils key insights into the ecosystem’s rapid growth and growing investor interest.
The report delivers a current snapshot of the 2024 startup and investment landscape in the Baltic region. By placing these insights alongside data from 2023 and a five-year historical trend, the report establishes patterns that are shaping the market. While the spotlight is on Deep Tech and AI companies, the report also examines the critical infrastructure supporting these advancements, including universities, spinoffs, and emerging tech hubs in key cities.
“This year’s report highlights the thriving ecosystem of Deep Tech, AI, and Climate Tech startups. Investments are growing and the value created is growing even faster. Amazing companies are being built. Marking a significant shift from the previous edition, we exclusively examined a list of over 100 “AI-first” companies in the region that are building products at the forefront of technological advancements,” added Kasparas Jurgelionis, Managing Partner at Iron Wolf Capital.
This sharper focus provides a more accurate representation of the Deep Tech landscape, even if it means fewer companies are included. Another novel addition to the report is the introduction of the Top Deep Tech Startups list. This ranking goes beyond basic metrics, considering factors like company growth, founders’ experience and education, funding potential, team composition, and market relevance, offering a well-rounded view of the most promising players in the Baltics’ Deep Tech scene.
Three key takeaways from the 2024 Baltic Deep Tech Report include:
- Strong Pipeline: The Baltic region boasts a strong pipeline of promising Deep Tech, AI & Climate Tech startups, with the report analyzing data on over 260 Deep Tech and over 100 AI startups in the region. Notably, 20% of the combined enterprise value of Baltics startups in 2024 stems from Deep Tech & AI companies.
- Deep Tech Investment Soars: 2024 is off to a phenomenal start in terms of Deep Tech VC funding. With less than half the year completed, Baltic Deep Tech startups have already attracted a record-breaking €160 million in VC funding. This surpasses the total investments across all of 2019, 2020, 2021, and even 2023 (€157M). This is further bolstered by the fact that 40% of VC funding in the Baltics so far this year has gone into Deep Tech startups.
- Impressive Growth: The Baltic Deep Tech scene has experienced a staggering 360% growth in the last five years, outpacing other European regions.
“By the numbers, the Estonian DeepTech ecosystem is off to a promising start. Startup turnover growth in Q1 2024 showed a 38% increase over Q1 2023 whereas economic growth elsewhere is hard to find. Investments into the DeepTech sector in 2023 and Q1 2024 confirm a similar trend. Over €350 million invested in Estonian DeepTech companies validates investors’ focus and priorities,” confirmed Vaido Mikheim, Deep Tech Sector Project Lead at Startup Estonia.
In addition to the specific focus on the deep tech startup ecosystem and funding developments, the report takes a broader look at each of the Baltic states’ startup ecosystems, highlighting the existing as well as future unicorns and noteworthy university spinouts. The report also includes an updated map of the Baltic unicorns, including less talked about Baltic-affiliated unicorns that not only nurture new tech talent and ambition but also underscore the region’s talent density, favorable regulations, and business climate. Success stories of Revolut with their first e-money license in 2017 in Lithuania, and Unity with their first offices outside Denmark in Vilnius and Kaunas, are often omitted from the Lithuanian and Baltic tech narratives. The report highlights them, and others, to demonstrate the scope, interdependency, and impact of a wider ecosystem. It is a case in point of how putting a bet on the region’s talent and determination pays off.
“I am proud to say that Iron Wolf Capital is committed to uniting Baltic talent in AI and Deep Tech, and to tripling down on our efforts to make the Baltics an indispensable hub for strategic technologies. This report, along with the newly introduced Top Deep Tech Startups list and the Deep Tech Breakfast community events series are just a few examples of our dedication to fostering a collaborative and resilient ecosystem,” shared Jurgelionis. “We’re excited to continue the work on this much-needed report, and planning for the next edition, looking to introduce and examine additional topics relevant to the ecosystem such as dual-use technology.”
- The complete Baltic Deep Tech Report can be accessed and downloaded from dealroom.co’s website.
- Iron Wolf Capital is a leading early-stage Deep Tech and AI-focused VC fund based in the Baltics and London. With more than 20 investments over the last 5 years, they are one of the most active investors in the Baltics and beyond.
- Dealroom.co is the foremost data provider on startup, early-stage, and growth company ecosystems in Europe and around the globe.
- Startup Estonia is a governmental initiative within the Estonian Business and Innovation Agency connecting different sectors with the startup community. They are funded by the European Regional Development Fund.
- Commercialization Reactor is an award-winning science commercialization platform and an early-stage deep tech fund from Latvia.
