Punching Above Your Weight: Startup Funding in Estonia

Estonia, a small country with just 1,3m inhabitants, has been a home to quite a handful of successful startups going back to Skype, and more recently companies like Transferwise, Pipedrive, Playtech. Last weekend, the startup and tech conference Latitude59 took place in Tallinn attracting an international audience and plenty of startups. In the light of this, let’s look into the startup landscape of Estonia.

The Estonian startup scene started to expand around 2012. It was also the time when first startup accelerators in the country came to be. Startup funding in Estonia has been on an increase since 2012 and peaked in 2015, where the funding totalled at $160m. Deal sizes followed a similar pattern until a drop in 2016. A similar pattern of decreased funding was seen in global funding as well.


Funding of startups in Estonia is slowing down

On the topic of global funding, Estonia and Europe have been outperforming other regions significantly. Despite a good performance in the previous years, Estonia saw a huge drop in funding in 2016, while Europe and Asia both had an increase.


Exits through acquisitions are on the rise

Due to the relatively small startup landscape, only 10 startups have exited in Estonia. That makes around 2% of the total number of startups in Estonia. All the exits so far have been through acquisition, none of the startups have gone public yet. The most successful startup that exited is GrabCAD, a collaboration solution for engineers, who managed to raise over $13m in funding before the acquisition.


Funding trends are reflecting Estonias tech-focus

To analyse the funding trends in Estonia, we have taken the share of total funding that went to an industry and compared it to the share of global funding going to the corresponding industry.

Based on the data, the top three industries doing exponentially well compared to the global trends, are Location Services, Engineering & Technology, and Electronics & Hardware.


It is not that surprising since Estonia is often referred to as e-Estonia due to its high focus on technology and innovation. Startups like Teleport, Skeleton Technologies, and Starship Technologies are drivers behind the top industries’ funding.

Estonia on the top with high numbers of startups per capita

There are 413 startups in Estonia. The number might seem small but compared to the population, it ends up as 31 startups per 100.000 inhabitants. This places Estonia third in Europe regarding the number of startups per capita.


Estonia has managed to create an accommodating environment for startups, which explains why there are quite many in the small country.

There is a possibility of e-residency, which makes it easier for foreigners to do business in Estonia, and startup visa programme, which helps startups to acquire foreign talent outside the EU.

The full report is completely free and available for download here: markets.funderbeam.com/reports