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Estonia is the startup and unicorn haven of Europe

In 2023, Estonia shines in European tech landscape as a tech haven, leading in funding startups and unicorn creation, according to the latest Atomico report.

2023 presented a testing environment for the European technology sector, writes Atomico in their annual State of European Tech report. Estonia remained “a startup haven”, assure the authors.

Leading the change

Why is it especially impressive? 2023 marked a shift from previously soaring investment levels, with the European tech ecosystem collectively raising approximately $45 billion, a decline from previous years. Yet Estonia, Netherlands, and Norway are amongst the countries that have captured the biggest gains in investments, reports Atomico.

In the face of this adversity, certain segments within European tech have emerged as pivotal growth drivers. The Carbon & Energy sector, encompassing climate tech, saw a surge in investment, accounting for 30% of the total capital inflow in 2023. Estonian contribution to this was massive, with record rounds secured by battery producers, hydrogen innovators and clean energy enablers.

This focus on sustainability reflects a broader commitment to addressing global challenges, which Estonia leads with a pledge to use 100% renewable energy by 2030. Additionally, AI and automation sectors attracted significant capital, with European AI companies demonstrating a robust growth trajectory and Europe boasting a larger AI talent pool than the U.S​​.

Small size, big success

On top of that, the European tech landscape is witnessing a transformation in its investment approach. Notably, the majority of early-stage investments in European tech companies are now sourced from within Europe, a trend that underscores the region’s growing self-reliance and resilience.

Estonia, boosted by years of continuous startup success and exits, is following the trend, adding more home-grown venture capital firms and hosting foreign VC HQs. It also packs another surprising advantage. “The most counterintuitive element of Estonian success has been its small size. Any tech project in Estonia always begins with the scrappy lens of “How can we get ALL THIS done with 3 people?” You can never build a massive company on a local market of a million people, which means every founder is forced to think globally from day one. When all founders look outside of Estonia, their backs are together: we have the most supportive community of peers anywhere.,” says Sten Tamkivi, Partner at Plural Platform.

Estonia has the most startups and unicorns per capita in Europe

Built on a foundation of Europe’s best education, this ecosystem continues to deliver. Estonia stands out for its high density of funded startups — over 400 per one million inhabitants. It also leads in billion-dollar companies, with 4.5 unicorns per million capita. According to Invest Estonia’s proprietary calculation, the number stands even higher at 7.7 unicorns. The full list of Estonian unicorns can be seen here.


And things might only get better. Despite a cautious environment, there is a palpable sense of optimism for the future. A majority of venture capitalists anticipate an upswing in deal volumes in 2024, signalling a positive outlook. Estonians are moderately positive, too, with around 40% anticipating positive changes.


What’s next? With its focus on sustainability, AI, and purpose-driven companies, coupled with a robust investor base and innovative practices, Europe is poised to solidify its position as a global tech leader, assures the report. The future success of this ecosystem will hinge on its ability to adapt, innovate, and strategically navigate the complex global investment landscape. Estonia, Europe’s flagship ecosystem and startup haven, is a certain part of this success story.

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