 Russian Tsar Peter the Great had established a new capital and powerful naval base in Saint Petersburg in 1703 . Russian naval power in the Baltic grew to challenge the interests of Sweden , the other leading power in the Baltic . Swedish holdings at that time included territory in Northern Germany , all of modern Finland and most of the Baltic states , a dominion depending on , and connected by , the Baltic Sea trade routes . During the Great Northern War ( 1700 – 1721 ) , Sweden lost all its territories in the Baltic states and suffered Russian raids in Finland and along the chain of islands and <unk> stretching from the Gulf of Finland to Stockholm . The Swedes began to deploy inshore flotillas of shallow @-@ draft vessels , beginning with smaller versions of the traditional Mediterranean galleys . Most of these new vessels were more akin to <unk> and were complemented with gun prams . The disastrous war with Russia ( 1741 – 43 ) and the minor involvement against Prussia in the Seven Years ' War ( 1757 – 62 ) showed the need for further expansion and development of the inshore flotillas with more specialized vessels . 
