Latvia’s Startup Ecosystem Shows Steady Growth, Reaching €78 Million in Investment

Riga, Latvia – Despite a relatively stable number of registered startups, Latvia’s startup ecosystem continues to demonstrate robust economic contributions, with increased turnover, employment, and tax revenue, according to the latest Latvian Startup Report 2025 compiled by the Latvian Startup Association Startin.LV.

Economic Impact and Investment

At the end of 2025, there were 569 businesses classified as startups operating in Latvia. While the total number of businesses has remained consistent in recent years, the sector’s financial performance is on the rise. In 2025, startups contributed €110.4 million in taxes to the state budget, a €16 million increase from 2024. Employment within the sector also grew, rising from 4,750 employees in 2024 to 5,101 in 2025. The average gross monthly salary for these employees reached approximately €2,820, exceeding the national average.

In 2024, total startup turnover reached €610.5 million, a 15% increase compared to the previous year. Each employee generated an average turnover of €134,000, highlighting the sector’s high productivity. Fourteen mature companies surpassed the €10 million turnover threshold, collectively accounting for 62% of the sector’s total turnover, indicating the emergence of scalable, internationally competitive businesses in Latvia.

Investment activity rebounded in 2025, with Latvian startups securing approximately €78 million in investment. A significant transaction included a €54 million investment in Aerones. Three venture capital funds supported by Altum – BADideas, Buildit, and Outlast Fund – initiated active investment operations, planning to invest over €62 million in early-stage companies over the coming years.

Science-Intensive Startups Lead the Way

The science-intensive startup segment is a key driver of growth, now representing 26% of the overall ecosystem. These companies generated €149 million in turnover in 2024 and employed 1,538 people in 2025, contributing €35.4 million in taxes. The three largest investments in 2025 were directed towards science-intensive companies, signaling long-term potential in technologically advanced solutions.

Collaboration and Challenges

Ieva Jāgere, Director of the Investment and Development Agency of Latvia, emphasizes the role of startups as “the driving force behind the innovation ecosystem,” noting their creation of globally competitive products and their influence on traditional industries like defense, energy, mobility, and digital services. Jāgere asserts that increased cooperation between state-owned enterprises, public institutions, and startups – through pilot projects and innovative procurement solutions – is crucial for sustainable development.

The report identifies ongoing challenges, including stagnation among some startups, highlighting the need for strengthened early-stage support. Data also reveals gender inequality in company ownership. While the science-intensive segment is growing, businesses in this area continue to face difficulties in securing funding and navigating systemic development challenges.

Looking Ahead

Roberts Alhimionoks, Executive Director of Startin.LV, stresses the need for “focused and coordinated action,” advocating for strengthened early-stage support mechanisms to foster new team formation and a more inclusive environment for aspiring founders. He believes the ecosystem is poised for further development, but achieving this requires targeted policy decisions and consistent implementation.

The Latvian Startup Association Startin.LV, established in 2016, is a non-profit organization dedicated to uniting Latvian startups, developing the startup community, and facilitating mutual understanding within the startup environment. Startin.LV currently has over 100 members and actively advocates for startup interests in policy-making processes.