Latvian Startup Report 2025 shows rising productivity and strong economic impact

Latvia’s startup sector continues to punch above its weight, with high productivity and competitive wages underscoring its growing economic impact. According to the newly published Latvian Startup Report 2025 by the Latvian Startup Association Startin.LV, the country counted 569 active startups by the end of 2025, with the ecosystem generating €610.5 million in turnover in 2024—a 15% year-on-year increase. The sector employed over 5,100 people with an average gross salary of €2,820, well above the national average, while each employee generated roughly €134,000 in turnover. Deeptech companies, which now make up 26% of the ecosystem, are playing an increasingly central role, attracting major investments such as Aerones’ €54 million round and signaling strong long-term potential for Latvia’s innovation-driven economy.

According to financial data for 2024, the total turnover of startups reached 610.5 million euros, which is a 15% increase compared to the previous year. 14 mature companies exceeded the 10 million euro turnover threshold, together accounting for 62% of the total turnover of the sector. This confirms that companies with the ability to scale and compete at an international level are being formed in Latvia.

In 2025, startups paid 110.4 million euros in taxes to the state budget, which is a significant increase compared to 88 million euros in 2024. The number of employees in the sector also continues to grow – from 4750 to 5101. The average gross salary for these highly qualified employees reached approximately 2820 euros, significantly exceeding the national average. In 2024, the average employee contributed 134 thousand euros in turnover, which clearly highlights the high productivity of the startup sector.

The segment of knowledge-intensive (deeptech) startups is particularly noteworthy, which already accounts for 26% of the total ecosystem. In 2024, these companies reached a turnover of 149 million euros, in 2025 they employed 1,538 people and paid 35.4 million euros in taxes. The three largest investments in 2025 were made directly in deeptech companies, highlighting the long-term potential in the development of technologically complex solutions.

Investment activity is recovering

In 2025, Latvian startups attracted approximately 78 million euros in investment. The largest deal was the 54 million euro investment of the company Aerones, which confirms the ability of Latvian companies to attract significant international capital. Another significant milestone was the fact that in 2025, three ALTUM-supported venture capital funds began active investment activities: BADideas, Buildit and Outlast Fund. Over the next few years, they plan to invest more than 62 million euros in early-stage companies.

“Startups are currently the driving force of the innovation ecosystem – they create globally competitive products, test bold ideas in real markets and also inspire traditional industries – defense, energy, mobility and digital services – to transform more rapidly. For this development to be sustainable, state-owned companies and institutions must also become increasingly active in cooperation with startups – both by implementing pilot projects and using innovative procurement solutions. This is a clear signal that the state is not only talking about innovations, but is itself becoming a significant customer and partner of new technologies,” says Ieva Jāgere, Director of the Investment and Development Agency of Latvia.

Ecosystems are growing, but challenges remain

The publication also includes an extensive review of the activities of 24 startup ecosystem organizations – state administration institutions, community support organizations, investors and universities. The activity of these participants is essential for the sustainable development of the ecosystem, as it strengthens cooperation, promotes knowledge transfer and creates new startups.

At the same time, the sector is still in an early stage of development, and it faces several challenges. The stagnation of the number of startups indicates the need to strengthen early-stage support instruments. Data on business owners point to gender inequality. Similarly, although the segment of knowledge-intensive companies is growing, it is still difficult for them to attract financing, and there are systemic obstacles in the development process that require targeted action to address.

“This is a time for targeted and coordinated action. It is essential to strengthen early-stage support mechanisms to facilitate the formation of new teams and create a more inclusive environment for future founders. Overall, we see the ecosystem growing rapidly, and with the right push, we hope to see the next wave of Latvian startups emerge soon,” comments Roberts Alhimionoks, Executive Director of the Latvian Startup Association Startin.LV.

Latvian Startup Report 2025 is accessible here.

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