Thriving! The one word to summarize the Latvian startup ecosystem in 2025 would be it – thriving!
Last year in 2024 with the announcement of three new early stage venture capital (VC) funds backed by €60M investment from the Latvian Development Finance Institution ALTUM — BADideas, Outlast, and BuildIT — the launch of Startup House and StartSchool, and the merger of the two Latvian unicorn startups Printful and Printify, Latvia solidified its status as a mature startup ecosystem poised for growth.
And growth we have! In the first half of 2025 Latvian startups have received 700% the investment they received in the same period the year before. Notable 2025 deals so far include the $62M Series B round raised by Aerones — a category-defining robotics and machine learning startup for inspection and maintenance of wind turbines — a $4M Seed round raised by Trace.Space — an AI-powered requirements management platform for engineers developing industrial products — and the $4.2M seed round raised by Handwave — a biometrics startup disrupting the global payments industry — with more deals already in the works for later this year.
The vibrant ecosystem that exists today did not emerge overnight. It has evolved since Latvia regained independence through a combination of public and private efforts.
While the talent has always been here — Latvia boasts 28 universities with world-class STEM programs producing graduates with good English skills — the infrastructure and capital emerged over time.
While in the early years of independence the concepts of startups, share options, or venture financing were virtually unheard of, the entrepreneurial spirit was there, and produced notable early Latvian startup success stories like draugiem.lv, Infogram, and Mobilly.
Today Latvia, along with Estonia and Lithuania, consistently rank in one of the top positions in the world in terms of startup-friendly tax and regulatory environment. This is a result of the government’s conscious effort to foster innovation, and a great example of a government partnering with the startup ecosystem and responding to their needs.
Venture capital has also been critical for the developing startup ecosystem. With the first Baltics-focused funds appearing around 2010, there was a wave of such funds emerging around 2018, and today there are 5 VC funds based in Latvia with 28 regional funds looking to invest in Latvian startups.
While the early Latvian startup community formed around a co-working space in Riga called TechHub, the role of the focal point of the community has now passed on to Startup House, founded in 2024 by a coalition of local startup entrepreneurs led by Janis Berdigans, founder of Printify. Located in the Spīķeri district of Riga, it is off to a great start, expanding from one building to two this summer. It also houses StartSchool, a pre-accelerator program for startups.
TechChill, which started as a birthday celebration for TechHub Riga in 2012, has evolved into the pre-eminent startup conference in the region, and is going global with events planned in Kiiv to support Ukrainian startup ecosystem later this year.
The number of Latvian startups themselves was 512 according to the latest published data, and continues to grow. It covers the full gamut of verticals, including deep tech, robotics, clean tech, fintech, healthtech and others, with two growth areas to note.
First, perhaps unsurprisingly, AI is an area of unprecedented growth and activity. While most startups have an AI aspect to them in 2025, Latvia also has its share of AI-first startups. A notable example here is THEO Growth, which raised a €430K pre-seed round earlier this year.
Second, with the established world order under notable stress, defense has emerged as a major area of investment for governments and startups alike. While venture capital limited partner agreements typically prohibit investments in military applications, there is a growing interest from VC funds towards defensive, dual use, and related technologies. Here too, Latvia has a lot to offer with startups like Origin Robotics, Submerge Baltic, and others.
While the future is far from certain, the Latvian startup ecosystem has come a long way from the early days after independence, and has the talent, the tax and regulatory environment, and the funding to succeed. We can’t wait to see what the Latvian founders will build with their unique blend of grit, pragmatism, and ambition.
This article is a part of the 2025 Latvia-USA Business Report.