Advertising, Estonia, Good for Business, Innovations, Markets and Companies, Technology

International Internet Magazine. Baltic States news & analytics Friday, 23.04.2021, 10:50

Turnover of Estonian startups grows to EUR 196.5 mln in Q1

BC, Tallinn, 28.04.2020.Print version
The aggregate turnover of Estonian startups grew to 196.5 mln euros in the first quarter of 2020, which is 66% more than in the first quarter of 2019, Startup Estonia informed LETA/BNS.

State taxes were paid in the total amount of 26.3 mln euros, or 47% more than in the first quarter of last year. Altogether 25.4 mln euros were paid in labor taxes -- 49% more than in the same period last year.


The highest turnover in the first quarter of this year, 84.9 mln euros, was registered by Bolt, followed by Pipedrive with 12.2 mln euros, Adcash with 9.2 mln euros, Starship Technologies with 5.4 mln euros, and Fiizy with 4.8 mln euros.

Maarika Truu, head of Startup Estonia, said that the Estonian startup sector grew strongly in the first quarter, as the effects of the crisis are not yet reflected in the statistics. To assess the effects of the crisis, we have to wait for the results of the current quarter, Truu added in a press release.

"Unfortunately, a survey conducted by Startup Estonia among startups in April showed that the impact of the crisis has hit a significant number of startups and 48% of respondents predict a decline in income by half or more," she said.

According to statistics available from Startup Estonia, there are 1,019 startups operating in Estonia at present and 10 new startups were established in the first quarter of this year. There are 285, or 27% of all startups in Estonia, that have been operating in Estonia for five years or more.

Statistics from the Estonian Tax and Customs Board show that as of 31 March, 6,316 people worked in Estonian startups, which is 5% more than at the end of 2019 and 31% more than in the first quarter of 2019, when a total of 4,836 people were employed in the startup sector.

The biggest labor tax payers in the first quarter of 2020 were Transferwise with 3.37 mln euros, Bolt with 2.8 mln euros, Pipedrive with 2.54 mln euros, Veriff with 1.13 mln euros and Paxful with 920,000 euros.

The companies to increase their workforce most in the first quarter of this year were Transferwise, by 64, Bolt, by 38, and Starship Technologies, by 53. At the same time, a survey among startups showed that by April, 19% of startups had to lay off workers due to the coronavirus crisis.

According to Startup Estonia, approximately 22% of the employees of Estonian startups are foreigners, while in a survey conducted by Startup Estonia and the Estonian Startup Leaders Club, 14% of startups admitted that their foreign employees have decided to leave Estonia or have not been able to move to Estonia due to the coronavirus crisis.

"This is a worrying fact, because due to the restrictions on movement between countries, startups cannot bring the necessary talent to work in Estonia at the moment," Truu said, adding that it is also possible to use teleworkers abroad, but then Estonia will not receive tax revenue from these jobs.

In the first quarter of 2020, Estonian startups raised altogether 10.7 mln euros in investment and altogether 14 transactions were carried out. The average size of a transaction was 770,000 euros. Altogether four startups raised investments larger than 1 mln euros -- Katana, which raised 1.98 mln euros, Viveo Health, which raised 2 mln euros, High Mobility, which raised 1.5 mln euros, and Speys, which raised 1.05 mln euros.

Sten Tamkivi, vice president of the Estonian Startup Leaders Club, said that while in March, one could celebrate that Estonian startups have never had such good times, the situation has changed dramatically by now.

"The costs of startups are one step ahead of their revenues in terms of time and they therefore need external capital on a regular basis. Investors are more cautious and critical in the crisis situation and it takes more time to raise capital. Our study showed that many companies may experience liquidity problems this summer," Tamkivi added.

According to a survey conducted in April, 18% of startups are currently in the capital-raising phase and are facing the rejection of several investors. Another 22% of respondents planned to start raising new capital in the spring or summer of this year. In addition, according to Tamkivi, it is currently unknown what the opportunities for raising capital will be in the second half of the year.

In the first quarter of the year, startup visas were granted to 178 employees and 44 founders. In the first quarter, startups that have used the startup visa paid the state 500,000 euros in labor taxes and increased their turnover to 7.5 mln euros, up 148 % from the first quarter of last year.

Startup Estonia is a governmental initiative aimed to develop the local startup ecosystem. The program of Startup Estonia is carried out by KredEx. 


Search site