Latvian tech contributes to European defense capabilities

The potential of startups in the defense sector was a key topic at this year’s Investors’ Day, part of the TechChill conference in Riga—one of the Baltics’ biggest tech events. Among the panelists exploring investments in defense tech startups was investor and partner at 2C Ventures, Taavi Veskimägi, the former Minister of Finance of Estonia, and founder and chairman of the Estonian Defense and Aerospace Industry Association. In an interview, he argues for a stronger joint European defense industry, as well as shares which dual use and defense tech startups from Latvia to keep an eye on. 

Believing that Europe is stronger together, that no country should ever find itself facing an enemy alone, and that defense industrial capabilities are part of the overall defense capabilities, Veskimägi shares his perspective on a European level, not single country or regional level, without zooming in on Latvia or the Baltic states. 

“In light of today’s geopolitical challenges, a more integrated internal market for defense industry products and services is essential,” says Veskimägi, adding that the European joint defense industry is fundamental to the continent’s defense capabilities. 

To foster a stronger industry, Veskimägi encourages establishing clear legal regulations that would allow a defense industry company operating in one member state to access another state’s defense industry procurements without restrictions. He believes that it is vital to consider the European defense industry industrial base as part of a common European defense capability, not on a member state basis.  

“This approach is fundamental to accelerating the adoption of new, effective defense industry products, rapidly increasing the force multiplier for European armed forces, reducing the cost of the kill chain, and quickly enhancing European deterrence capabilities. A single market for defense industry products and goods in Europe could facilitate the foundations of a capital market in the EU comparable to that of the US for the defense industry. The current market fragmentation makes it difficult for European defense industry companies to demonstrate growth which is essential to attracting more private capital to defense,” Veskimägi expands.  

Shifting from legacy tech to disruptive tech: Europe’s great potential? 

According to Veskimägi, Europe is very well placed to lead the way from legacy technologies to disruptive ones. “Shifting from legacy technologies to disruptive innovations offers significant advantages for our defense industry. As global defense capabilities evolve, staying ahead of technological advancements is crucial for Europe’s security. Legacy technologies are becoming increasingly outdated, especially when faced with rapid developments from adversaries,” he says.   

“Disruptive technologies, such as cyber-defense tools, unmanned aerial vehicles (UAVs), and advanced data analytics, are better suited to address modern threats like cyberattacks, hybrid warfare, and terrorism,” Veskimägi continues, adding that disruptive technologies tend to be more efficient, self-maintaining, and cost-effective compared to legacy systems, reducing the need for costly maintenance and upgrades. In turn, this efficiency allows reallocating resources to other defense priorities. 

“A strong defense industry is not only vital for national security but also drives economic growth by creating high-value jobs. Countries facing similar geopolitical realities, such as South Korea and Israel, have demonstrated this successfully,” Veskimägi concludes.  

Asked which Latvian startups he finds particularly interesting in this context, Veskimägi mentions SUBmerge Baltic, Ascent Lumina, and Origin Robotics.  Founded by students at Riga Technical University, SUBmerge Baltic designs and builds dual use autonomous underwater drones for surveillance and safety. Ascent Lumina develops AI computer vision solutions for unmanned vehicles, and Origin Robotics produces man-portable drone-launched precision-guided weapon systems. 

Latvia’s Contribution to European Defense Innovation 

(The following section does not reflect the views expressed by Taavi Veskimägi.)  

Latvia’s growing defense tech sector reflects the country’s broader ambition to position itself as a hub for innovation and investment in high-tech industries. With a strong foundation in engineering, AI, and robotics, Latvian startups are increasingly contributing to European security and defense capabilities. The success of the companies highlights the potential for Latvian entrepreneurs to drive forward disruptive technologies with both civilian and defense applications.  

For investors, Latvia offers a dynamic and supportive startup ecosystem, bolstered by initiatives such as the Startup Law, a highly skilled talent pool, and access to the European market. The Investment and Development Agency of Latvia (LIAA) continues to support and promote these opportunities, connecting international investors with high-potential startups. As geopolitical challenges accelerate the need for innovative defense solutions, Latvia’s tech ecosystem stands ready to play a vital role in shaping the future of security and defense innovation in Europe.