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# Defence and Deeptech lead Baltic funding as pre-seed surge offsets growth capital drought
- URL: https://fomo.observer/defence-and-deeptech-lead-baltic-funding-as-pre-seed-surge-offsets-growth-capital-drought/
- Published: 2026-09-16T10:58:06.000Z
- Updated: 2026-09-16T11:02:48.000Z
- Author: Fomo.Observer
- Tags: Lithuania, Investing, Estonia

**VILNIUS** — The Baltic startup ecosystem is experiencing a structural realignment in 2026: while growth-stage venture capital has contracted, early-stage activity is undergoing a renaissance driven by defence technology, deeptech, and an influx of pre-seed initiatives.

Data presented at StartupFair shows regional funding standing at €353 million year-to-date, trailing significantly 2025’s full-year total of €608 million. The pull-back is concentrated primarily in growth-stage rounds, which remain scarce across the Baltic states.

### Defence and Deeptech Outpace Traditional Verticals

Despite macro headwinds, capital allocation has concentrated heavily into security and deep technology:

- **Defence leads capital volume:** Defence startups secured the highest total funding, capturing €39 million across five rounds.
- **Deeptech secures second place:** Deeptech companies raised €38 million across four deals, establishing hard tech as a priority for institutional investors.
- **AI dominates deal count:** Artificial intelligence generated the highest transaction volume with 14 completed rounds, though totalling €22 million in capital raised.

Social commerce (€22 million) and food tech (€20 million) rounded out the top five funded sectors by capital volume.

[Baltic investments grew 20% in 2025, pre-seed investments in Estonia more than doubled -reportPractica Capital and FIRSTPICK published annual funding report for the region![](https://storage.ghost.io/c/08/7f/087f88ab-cb17-44cc-928d-9cfca14a3fb9/content/images/icon/Untitled--800-x-800-px-Video---1--98d64368-7a9b-46da-802d-3f82160b9442.gif)Fomo.ObserverTarmo Virki![](https://storage.ghost.io/c/08/7f/087f88ab-cb17-44cc-928d-9cfca14a3fb9/content/images/thumbnail/Fomo.Observer_Latitude59-4-6823e773-8e42-40d8-95c1-086d0ccec3a0.jpg)](https://fomo.observer/baltic-investments-grew-20-in-2025/)

### Pre-Seed Surge Driven by Community Initiatives

At the foundational stage, the region is seeing renewed momentum driven by founder-led initiatives such as hacker houses designed to feed early deal flow:

- **Rising median round sizes:** The median Baltic pre-seed round reached €409,000 in 2026, a 3.1x increase from €132,000 in 2020.
- **Blurring boundary with Seed:** In H1 2026, 33% of pre-seed rounds exceeded €1 million, up from 16% in 2025.
- **Capital acceleration:** Pre-seed funding reached €30 million in H1 2026, representing 64% of the total capital raised in pre-seed throughout 2025.

Outlier transactions — such as Zobi’s €5 million pre-seed round in August 2026 —demonstrate that high-conviction teams are commanding larger valuations at earlier stages.

### Seed Stage Experiences Mid-Market Squeeze

In contrast to the pre-seed momentum, Seed-stage venture activity experienced a broad pullback across key metrics:

- **Capital reduction:** Total Seed capital dropped to €48 million in H1 2026, down from €132 million in 2025.
- **Fewer completed transactions:** Only 23 Seed deals closed in H1 2026, falling below the 2023–2025 historical baseline.
- **Lower median checks:** Median Seed rounds decreased to €1.8 million in H1 2026 from €2 million in 2025.

Active regional funds — led by FIRSTPICK, Practica Capital, and Coinvest Capital, each completing five or more deals in H1 — are relying on pre-seed pipeline initiatives to reactivate Seed-stage deal flow in upcoming quarters.

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