The Third Quarter of 2025 for the Estonian Startup Sector: Productivity Gains, Tax Resilience, and Deeptech Momentum
In Q3 2025, the Estonian startup sector set its vector on productivity and a continuing search for efficiency. The sector’s turnover increased by 15% to €1.173 billion, representing about 33% of the year-to-date total of €3.530 billion. This surge far outpaced the broader private sector, with the startup turnover growing more than seven times faster than the modest 2% rise seen across all enterprises combined.
Employment remained steady, rising just 1% to 15,023. Meanwhile, state and labor taxes surged by 18% and 13% respectively to €120.7 million and €110.2 million, which brought year-to-date figures to €335.5 million and €310 million, with Q3 making up roughly 36% of both totals—a clear reflection of enhanced profitability and growing wages.
Investments presented a mixed outlook, with volume declining 27% to €47.4 million against a year-to-date total of €222.2 million. However, deal count rose 27%, local participation reached 60%, and notable international exits in fintech and cybersecurity once again affirmed the sector’s global appeal.
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Originally published on 25 Nov
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During the international Industry Space Days 2026 event at the European Space Agency’s ESTEC facility in Noordwijk, the Netherlands, the Latvian Mobile Telephone (LMT) Group and the globally leading space consultancy Novaspace signed a cooperation agreement on the development of a concept for telecommunications innovation platform for Latvia to link the national connectivity sector with the international satellite industry. The initiative follows the successful ESA 5G/6G Non-Terrestrial Network Hub model and will explore Latvia’s potential role within this network.
Signing the agreement marks a pivotal step toward creating a hub for developing an internationally competitive telecommunications sector in Latvia. The hub will strategically bring LMT Group into the space industry and impact the emergence of a wider Latvia’s space innovation ecosystem in next-generation satellite technologies, products, and services tailored to commercial applications, resilient critical infrastructure, security, digitalization and green transition. Essentially, the hub will attract national and international cooperation, funding and talent.
The next generation of mobile communications is closely linked to the rapid growth of the space economy globally. The space infrastructure is already gradually enhancing terrestrial networks, and the 6G era of telecommunications will seamlessly link terrestrial and non-terrestrial networks. The rationale for such development is efficient and resilient connectivity, especially essential in scenarios involving severe weather, power outages or physical infrastructure disruptions.
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Originally published on 22 Sep
Riga. The Latvian national airline airBaltic announces that it has received EUR 140 million as the first part of its previously announced EUR 350 million debtor-in-possession (DIP) financing. The funds were made available following interim approval by the United States Bankruptcy Court for the Southern District of New York (the U.S. Court) on September 16, 2026, as part of airBaltic’s financial reorganisation under Chapter 11 of the U.S. Bankruptcy Code.
Together with cash generated from ongoing operations, the financing will support airBaltic’s day-to-day operations and financial reorganisation, as well as the implementation of the company’s new business plan.
Of the EUR 140 million received, approximately EUR 78.9 million will be used to repay existing obligations to Export Development Canada and Axiom Baltic Services. These obligations are secured by airBaltic aircraft, spare engines and a flight simulator. Following repayment, these assets will become available as collateral under the new DIP financing arrangements.
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Originally published on 21 Sep
NestAI, a European AI lab for defence, is opening an R&D centre in Latvia to build defence AI capability alongside the forces and industry operating on NATO’s Eastern Flank. The centre is the next step in NestAI’s growing Nordic and Baltic presence, following the company’s expansion to Sweden announced in August.
As NestAI builds its presence in Latvia, the company is developing the center into a team of 30 scientists and engineers, and has set an investment target of €10 million for the centre over the next few years. The announcement coincides with NestAI’s participation in the Riga Conference on 11 September 2026, where Peter Sarlin, NestAI Founder and Executive Chairman, will meet with Latvian government and academic representatives and speak on European defence AI.
“NestAI’s decision to establish an R&D centre in Latvia is a strategic investment in a sector with significant growth potential. The planned €10 million investment and 30 new jobs for scientists and engineers will bring together knowledge, technology and international cooperation in Latvia. Attracting projects of this kind demonstrates our ability to compete at European level for high-value-added investment,” says Minister of Economics Viktors Valainis.
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Originally published on 21 Sep