According to Ellex Raidla’s Transaction Radar, 205 deals were made in Estonia last year — 32 more than the year before.
Risto Vahimets noted that while the year was turbulent, by its end it was clear the long-awaited revival of Estonia’s transaction market had begun.
“The Datasite Deal Drivers EMEA Q3 report showed that the number of deals in our broader region hit its lowest level since 2022 in the third quarter. The upside, however, was that deal value ranked second-highest for the same period. Investors still have capital, but in uncertain times, they prefer large, proven-quality companies,” Vahimets explained.
He added that private equity funds have been more active in the telecom, media and technology sectors, while sector-based activity has been strongest in the industrial sector of German-speaking countries.
“So, in the broader European context, we’re something of an outlier, since our deals are rarely ‘large.’ Still, Estonia did see two major transactions in 2025: the sale of Rimi to the Salling Group and INGKA’s purchase of Södra’s forest portfolio,” Vahimets pointed out.
He considers both deals significant, as they help dispel speculation about whether foreign investors have the confidence or lack thereof to invest in the Baltics.
Money concentrating in the US
The largest deal in Europe last year was the €19.7 billion acquisition of Dutch company JDE Peets by Dr Pepper. Another European deal came close to the $20 billion mark: Greek gaming giant OPAP merged with Allwyn International.
“It’s telling that once again, no European deals made it into the global top 10 — capital is increasingly concentrating in the U.S.,” Vahimets noted.
In Estonia, the highest number of transactions — 95 — took place in traditional mergers and acquisitions. Venture capital and tech accounted for 83 deals, followed by 14 large-scale real estate transactions and 13 capital market issuances.
Among the notable tech-sector fundraisers in 2025 were Starship (€50 million), Pactum AI (€47 million), Blackwall (€45 million), Druid AI (€31 million), Lightyear (€23 million), Katana (€14 million) and Stargate Hydrogen (€11 million).
The most active sectors included finance, energy technology, cybersecurity, logistics, artificial intelligence and the defense industry.
According to Vahimets, there is no reason to believe the pace of deal-making won’t continue to accelerate. He pointed to supportive macroeconomic conditions, banks’ willingness to lend and interest rates at reasonable levels. Still, he cautioned that surprises, especially geopolitical ones, remain a real possibility.
Capital moving to companies with proven products
Ellex Raidla associate partner Rutt Värk noted that while Estonia’s investment landscape in previous years was defined by record funding rounds and rapid growth phases, the picture has clearly shifted over the past year to year and a half. Venture capital and private equity deals haven’t disappeared, she said, but they’ve become more selective, strategic and technologically advanced.
“Capital is now primarily flowing into companies that have either a clear global market and scalable business model, a proven product with early traction, a deep-tech edge (AI, deep tech, cybersecurity) or links to the defense or dual-use sectors,” Värk explained.
She added that funding for companies involved in artificial intelligence and data processing has been particularly striking. There is also a noticeable rise in defense and dual-use technology — a sector that, five years ago, was more of a niche.
“A third emerging trend is deep-tech spinouts from universities and research institutions where investors are willing to accept longer development cycles but expect significantly greater strategic value,” Värk said.
Among the standout venture capital deals, Värk highlighted Stargate Hydrogen’s €11 million raise to expand production of noble-metal-free electrolyzers, Blackwall’s €45 million to protect companies from malicious web traffic, €10.8 million raised by gaming tech firm Ultra to grow its platform and Pactum’s €47 million to scale its AI-powered negotiation automation.
She also pointed to investment platform Lightyear’s €23 million round, as well as DRUID AI’s $31 million round led by Karma Ventures and other angel investors to support the company’s global expansion. Another notable deal was Swiss investment firm Bayard Capital’s more than €10 million investment in Estonian mirror house maker ÖÖD.
Värk further emphasized Starship Technologies’ $50 million raise, Katana’s €14 million round and the €10 million raised by Estonian defense tech firm PowerUP Energy Technologies as significant venture capital deals of the past year.
Sale of Keskkonnateenused stake landmark
According to Rutt Värk, private equity deals in Estonia have increasingly focused on control stakes in mid-sized companies — often family- or founder-owned — with a clear emphasis on creating operational value.
Värk pointed to the acquisition of a 75 percent stake in Estonia’s largest waste management company, Eesti Keskkonnateenused, by INVL Private Equity Fund II as the most notable private equity deal in Estonia last year.
“This marks the first landmark investment in Estonia by one of the largest PE funds in the Baltic region. It sends a strong signal that mature Estonian service and infrastructure companies are attractive to private equity investors,” Värk explained.
Ellex Raidla associate partner Alla Kuznetsova said global mergers and acquisitions (M&A) activity continued to grow last year, with strategic buyers dominating the market.
The year’s megadeals primarily focused on infrastructure and utilities, technology and cybersecurity, natural resources and critical minerals, as well as communications and data infrastructure.
While the number of deals in Europe declined, their total value increased.
“A handful of megadeals — such as Dr Pepper’s acquisition of Dutch company JDE Peets, the Helvetia-Baloise merger in Switzerland, banking sector consolidation in Italy and the Allwyn-OPAP merger — accounted for a disproportionately large share of total deal value in Europe,” Kuznetsova said.
Other major deals of the year included transactions in pharmaceuticals, financial infrastructure, retail and technology, with several European companies acquired by both regional and global strategic buyers.
In Estonia as well, most deals involved strategic buyers — industrial and service companies, regional or international groups and competitors or clients within the same sector, Kuznetsova noted.
“I believe that in 2026, the focus will remain on well-considered transactions, with continued emphasis on sectors like technology — especially AI — healthcare and energy technology. The end of 2025 showed clear readiness for this,” Kuznetsova said.
—