The European Investment Fund (EIF) is joining forces with the national promotional institutions of Estonia, Latvia and Lithuania to launch the Baltic Innovation Fund 3, a €225 million vehicle designed to grow the region’s private equity and venture capital market. Under the arrangement, the Fund will provide €75 million, while each Baltic state will contribute €50 million. The initiative builds on a decade of cooperation and aims to channel more long-term capital into one of Europe’s most dynamic start-up and scale-up hubs.
Baltic Innovation Fund 3 is expected to mobilize up to €700 million in total investment for growth-stage businesses across the region. The new vehicle will back both first-time and experienced fund managers, with around 70% of its portfolio targeting private equity growth strategies and the rest focused on late-stage venture capital. Over the next five years, the partners plan to support eight to eleven funds, with up to one-fifth of the capital ringfenced for climate-aligned investments.
Officials say the fund is a natural next step after the first two Baltic Innovation Funds, which together have mobilized more than €1.19 billion for companies since 2013 and attracted over €900 million in private capital. EIF Chief Executive Marjut Falkstedt praised the Baltic region’s resilience and strong appetite for innovation, noting that the new vehicle is intended to help “high-quality companies scale and realise their ambition” with stable, long-horizon backing.
In Estonia, the initiative is supported by SmartCap. Its Chief Executive Officer, Sille Pettai, said the fund will help ensure promising companies can access the growth capital needed to compete globally and sends “a clear signal to private investors that the Baltics remain an attractive and resilient market.” Latvia’s contribution comes through ALTUM, whose board chairman Reinis Bērziņš highlighted that every euro invested is expected to leverage several times more in company financing, translating into real economic activity and new opportunities.
Lithuania’s partner in the fund is ILTE. Board Member Tadas Gudaitis said the joint initiative allows the three countries to create a larger, more visible investment space, drawing both international and regional fund managers. By pooling resources and sharing risk through Baltic Innovation Fund 3, he added, the three states aim to unlock greater private capital and further strengthen the region’s innovation ecosystem, while opening new growth pathways for Baltic firms.
