EIF and Baltic states launch €225 million Baltic Innovation Fund 3 to boost private equity and venture financing

Luxembourg/Tallinn/Riga/Vilnius: The European Investment Fund (EIF) is teaming up with the national promotional institutions of Estonia, Latvia and Lithuania to launch a “Baltic Innovation Fund 3” (BIF 3) – a €225 million initiative to boost the region’s private equity and venture capital market. The EIF will commit €75 million and each Baltic country will provide €50 million. With a strong innovation ecosystem, the Baltic region remains one of Europe’s most dynamic hubs for startups and scale‑ups.

BIF 3 aims to anchor both first‑time and experienced fund managers and is expected to mobilise up to €700 million in total investments in Baltic growth‑stage businesses. The initiative will seek to develop a portfolio comprising around 70% private equity growth strategies, with the remainder going to late‑stage venture capital.

The goal of BIF 3 is to support eight to 11 funds over five years, with up to 20% dedicated to climate‑aligned investments. The EIF will act as fiduciary manager, overseeing fund selection, due diligence and governance.

The initiative builds on two previous initiatives – BIF 1 and BIF 2 – that since 2013 have mobilised more than €1.19 billion for companies in the region. The first two initiatives also attracted over €900 million in private capital.

“Building on our very successful prior collaboration, we’re looking to deepen the market with long‑term capital that helps high‑quality companies scale and realise their ambition.”

The BIF 3 backer in Estonia is SmartCap.

“We are committed to ensuring that our region's most promising companies have access to the growth capital they need to compete on the global stage,” said SmartCap Chief Executive Officer Sille Pettai. “The new fund is a clear signal to private investors that the Baltics remain an attractive and resilient market and that we continue to address the critical financing needs of companies seeking to grow and scale.”

The Latvian contributor to BIF 3 is ALTUM.

“BIF 3 is a significant step towards expanding access to long-term financing for Baltic companies,” said Altum Board Chairman Reinis Bērziņš. “Experience shows that every euro invested in the fund attracts several times more financing for companies, creating real economic activity and new opportunities. This initiative is a good example of how public financing can work together with private capital.”

The Lithuanian partner is ILTE.

“By working together, Lithuania, Latvia and Estonia create a larger and more attractive investment scale, enabling the region to attract both international and Baltic fund managers, mobilise greater private capital and open up new growth opportunities for Baltic companies,” said ILTE Board Member and Business Development Division Head Tadas Gudaitis. “Like its predecessors, BIF III provides a practical and effective way to pool resources, share risk and further strengthen the innovation ecosystem across the entire Baltic region.”

About EIF 

The European Investment Fund (EIF), part of the EIB Group, designs venture and growth capital, guarantees and microfinance instruments that absorb part of the risk that is taken by a wide range of selected financial intermediaries when they finance businesses, individuals and infrastructure projects, thereby improving access to finance in Europe. This encourages funds to invest, banks to lend and private investment to be crowded in to boost innovation, competitiveness and climate action, as well as improve sustainability, social impact and skills. 

About SmartCap

SmartCap is Estonia's state-owned national fund manager, with a mission to foster Estonia's venture capital market by investing across economic cycles and addressing market segments where high-risk, disruptive technologies are being developed to ensure technological edge and resilience in Europe. Managing 500 million euros across three strategic mandates—SmartCap Venture Capital Fund, SmartCap Green Fund, and SmartCap Defence Fund – SmartCap drives innovation and economic growth as a subsidiary of Enterprise Estonia.

About ALTUM

JSC Attīstības finanšu institūcija Altum (JSC Development Finance Institution Altum) is a Latvia state-owned company that ensures access of the enterprises and households to the financial resources by means of support financial instruments - loans, guarantees, investments in venture capital funds - in the areas defined as important and to be supported by the state, thus developing the national economy and enhancing mobilization of the private capital and financial resources. On 28 January 2025 Moody’s Ratings affirmed Altum’s Baa1 long-term issuer rating, with outlook stable. The rating as well as the short-term issuer rating at P-2, the same as affirmed on 2 February 2024. ALTUM is rated by Moody’s Finance Companies Methodology, published in July 2024. On 24 October 2017 the bonds issued by Altum were listed on a regulated market – Baltic Bond List of Nasdaq Riga. 

About ILTE

ILTE is Lithuania’s national development bank. Through ILTE Group companies and in collaboration with other financial market participants, ILTE promotes sustainable economic development, strengthens economic resilience, and improves access to financing for businesses, the public sector, and clients in the agriculture sectors. The bank also seeks to attract private capital to support the needs of domestic businesses.

ILTE’s activities focus on high value-added projects that drive national economic growth, encourage innovation, promote sustainability and energy efficiency, support the transformation of agriculture, and strengthen competitiveness. ILTE actively participates in infrastructure development and modernisation projects.