Estonia, EU – Baltic States, Financial Services, Funds, Good for Business, Innovations, Internet, Investments, Markets and Companies, Technology

There are at present a little over 400 startups in Estonia and roughly 90% of them are in the very early or early stages of development. At the end of 2015, the startup count was about the same, as a result of both natural selection and the fact that upon the launch of the new startup database together with Funderbeam, Startup Estonia narrowed down the criteria of a startup.

Startup Estonia said that while Estonian startups cannot be defined by a ruling industry, the most common keywords to describe them are IT services and B2B.

By the end of the third quarter of 2016, Estonian startups had already paid the same amount in employment taxes to the government as they did for the whole of 2015. All in all, taxes paid by startups grew from 21 million euros in 2015 to 28 million euros in 2016.

The number of people employed in Estonian startups kept growing rapidly and reached 3,500 as at year-end. Compared with the end of 2015, startups had attracted 1,000 more people as employees. The general rule of thumb is that three in four of the people employed by Estonian startups are employed in Estonia, which means that approximately 800 of the new jobs were created in Estonia and 200 elsewhere.

The companies with the biggest numbers of people on their payroll were Transferwise, which employed 600 people, including 400 in Estonia, Pipedrive with 240, Adcash with 200,  Zeroturnaround with 170 and Creative Mobile with 100. 

Estonian startups have raised altogether 370 mln euros during the last 10 years, more than 80% of which was raised from foreign investors. 2016 turned out to be a record year with 102.5 mln euros attracted by Estonian startups. By Christmas, it looked like 2016 was going to turn out to be a step back from 2015 in terms of the amount of capital raised, deal count and deal sizes. But with Pipedrive, Monese and Starship Technologies announcing huge rounds in January with deals dating back to 2016, the year emerged as the most successful funding year for Estonian startups yet.

The average deal size of the 40 deals recorded in 2016 was 2.5 mln euros. A closer look at them reveals that the biggest contributor, Transferwise, raised 48 mln euros in 2015 and 23.5 mln euros in 2016. The year ended with huge investment activity by Starship Technologies, which raised a historically massive seed round of 16.5 mln euros, Pipedrive, which attracted 16 mln euros, and Monese, 9.4 mln euros. The most notable initial rounds of 2016 were done by Leapin, 200,000 euros, Shipitwise, which raised two rounds on the Funderbeam platform amounting to respectively 176,000 and 181,000 euros, Globalreader, 165,000 euros, and Transferfast, 150,000 euros.