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International Internet Magazine. Baltic States news & analytics Saturday, 26.09.2020, 23:39

H1 turnover of Estonian startups grows 40% on year

BC, Tallinn, 13.08.2020.Print version
Despite the global coronavirus crisis, Estonian startups generated 364.5 mln euros in turnover in the first six months of 2020, which marks an increase of 40 % over the same period in 2019, Startup Estonia said cites LETA/BNS.


Among Estonian startups, the biggest turnovers were generated in the six-month period by Bolt, 132.7 mln euros, Pipedrive, 30.6 mln euros, Adcash, 16.5 mln euros, Starship Technologies, 8.9 mln euros, and Fiizy, 7.7 mln euros.


Maarika Truu, manager of Startup Estonia, said that like many others, the startup sector is definitely affected by COVID-19. However, despite the hectic times, we are still seeing growth in the Estonian startup sector in terms of the number of employees, employment taxes paid, investments raised and turnovers, she said. 


"At the same time, we need to consider that the COVID-19 outbreak has had its effect on startups' turnover as well. Compared to the first quarter, there was a decrease in turnover of -17% in the second quarter," Truu said. 


"Estonian startup sector has shown great resilience this year, starting the year with record-breaking news and celebrations from 2019 and riding straight into the COVID-19 related unknown. We were prepared for an even bigger impact by the pandemic reflected in our startup sector half-year statistics," she said.


Statistics from the Estonian Tax and Customs Board show that at the end of the second quarter of 2020, Estonian startups employed 6,084 people locally, 15% more than the year before. However, employee numbers have grown by only 1% compared to the end of 2019, revealing a significant impact from COVID-19.


The top employers in the Estonian startup sector are Transferwise with 954 employees and 61 new hires, followed by Bolt with 547 employees and 48 new hires, Pipedrive with 386 employees, Veriff with 226 employees, and Monese with 140 employees. 


36% of the employees of Estonian startups are women and 64 %are men. Approximately 26.7% of the employees have foreign citizenship, including 6.8% who have EU citizenship and 19.9% who are citizens of non-EU countries.


62% of the employees have higher education and 32% of employees have general education or vocational education based on secondary education. The proportion of employees with higher education among foreign employees in Estonian startups is even higher -- 76.5%.  


Most of the founders of startups have Estonian citizenship, with foreign nationals accounting for 28.4% of startup founders. The average age of a founder is 35 years. The proportion of female startup founders has not changed a lot and stays at around 15%.


According to Statistics Estonia, during the first six months of 2020, the average monthly gross salary in Estonian startups was 2,508 euros, which is 1.8 times more than the Estonian average. Employees aged between 41-50 earn the biggest average monthly gross wage, 3,385 euros, followed by employees aged between 31-40, whose average monthly gross wage is 2,932 euros. The average monthly gross wage for foreign employees is 2,506 euros.


Employment trends are also reflected in the employment taxes paid by startups. At the end of the second quarter of 2019, the total employment tax contribution by startups since the beginning of the year stood at 35.2 mln euros. At the end of June 2020, it totaled 47 mln euros, representing a year-to-year increase of 34%.


The largest payers of labor taxes among startups in the first six months of 2020 were Transferwise with 6.7 mln euros, Bolt with 5.3 mln euros, Pipedrive with 4.9 mln euros, Veriff with 1.8 mln euros and Paxful with 1.7 mln euros.


Based on the crowdsourced database and Estonian Startup Database, a total of 142.7 mln euros was invested into Estonian startups during the first half this year. In total, there have been 35 new investment deals this year. In the first half of 2019, there were 27 new investment deals, worth altogether 119 mln euros.

The biggest investments in the first half of 2020 were raised by Bolt, 100 mln euros, followed by Veriff with 14 mln euros, Pactum with 2.7 mln euros, Milrem Robotics with 2.7 mln euros, Jobbatical with 2.6 mln euros, Planet 42 with 2.2 mln euros, Katana with 2 mln euros, and Viveo Health with 2 mln euros.


The biggest acquisitions in the ecosystem so far this year are the acquisition of Pocosys, a banking software provider, by Opera. Secondly, the global billing platform Fortumo was acquired by Boku.


Startup Estonia is a governmental initiative aimed to support the development of the Estonian startup ecosystem in order for Estonia to be the birthplace of many more startup success stories to come. The Startup Estonia program is managed by the Kredex foundation. 


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