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Estonia leads Europe in startups, unicorns and investments per capita

“Estonia once again tops the charts,” states Atomico’s recent report, where Estonia is continuously leading Europe in terms of startups, unicorns and investments per capita.

How is it possible that one country is great in all: founding startups, growing billion-dollar worth tech companies, and raising money? We are trying to understand that phenomenon with the help of  Eve Peeterson, head of Startup Estonia. But first, let’s see the facts.

Estonia has the most startups per capita in Europe

The State of European Tech 2022 report by Atomico highlights Estonia’s continued leadership as the most entrepreneurial European country for tech startups.

The report was published in December 2022 when the Estonian Startup Database showed 1,452 startups founded in Estonia. And precisely as Atomico predicted earlier, the number of Estonian startups has continued to grow. “Despite its small size, Estonia is a heavyweight in the European tech ecosystem. The country is going from strength to strength every year,” states Atomico’s report.


Estonia has the most unicorns per capita in Europe

Estonia has a world-class track record in building unicorns. So far, Estonia has been the birthplace of 10 unicorns: Skype in 2005, Playtech in 2007, Wise in 2015, Bolt in 2018, Pipedrive in 2020, Zego, and Gelato in 2021, Veriff and Glia in 2022. That’s 7.7 unicorns per million capita.

And even though the newest report counts only half of that, it still makes Estonia the leader in unicorns per capita in Europe. According to Atomico’s findings, Estonia plays a major role in building $1B+ companies. The closest competitor is Luxembourg at 3.1 unicorns per million inhabitants, while the UK is at 1,6 and Germany near the EU average of 0,6.


Estonia leads Europe in investments per capita

Both Sifted and Crunchbase have written about how successfully Estonia manages investments.

“Estonia is pulling in the money,” writes Sifted, summarising the previous VC investment report by Atomico that says that Estonia has raised the highest number of investments per capita out of any countries in Europe. In 2022 Estonia went even further, with investment levels at a 3,6% share of GDP. The only other country in the ‘above 1% of GDP’ category on their investment levels is Croatia.

“Estonia, one of the smallest countries in the region, leads the whole of Europe when it comes to VC investments per capita as well as startup creation — €1,967 per capita raised and one startup per 1,048 people — which won’t come as a surprise to many readers,” wrote Sifted in 2021.

In 2022 the tech market is experiencing a dramatic overhaul, and Estonia is at $1056 invested per capita, beating the European average of just $140. The country’s closest competitors are fellow Nordic nations: Iceland ($543) and Sweden ($477).


Furthermore, Estonia’s brilliance in attracting money to the country is much more than a random result of one successful year. In its 2021 report, Atomico points out that cumulatively, Estonia is the second in Europe in terms of capital invested per capita in 2017-2021.



It is also worth noticing how much value Estonian startups are creating. With a headcount of over 10,000 people, those companies are still actively hiring and boosting the economy. In fact, as the report’s partner Indeed concluded, Estonia has the highest number of tech job postings per capita in Europe.

What is Estonia’s secret power?

Eve Peeterson explains in Life in Estonia magazine that despite Estonia’s relatively small population of approximately 1.3 million people, the country is big on advanced digital capability and creating an entrepreneurial-friendly environment. In fact, Estonia is the country of digital signatures and paperless communication with 99% of government services available from the comfort of your home.

“Where else could you establish a startup online in 15 minutes and file tax returns in a jiffy with just a few mouse clicks?” asks Peeterson. “Speaking of which, Estonia is a flagship tax-competitive country in the whole OECD. Although the country may not be tax heaven on earth, it can boast of the simplest and most transparent taxation regime. We are also talking 0% income tax on retained and reinvested profits, clear stock options regulation, plus double taxation treaties on file with at least 60 countries. Add the affordable high quality of life, top-notch human capital, as well as a trustworthy legal system to the equation, and you have the most favourable and thriving business climate in existence,” Peeterson adds.

Estonian Startup Visa

“The Estonian startup ecosystem has made significant strides forward, with approximately 30% year-on-year growth over the past 5 years,” notes Peeterson.

According to Peeterson, the community saw the need for hiring new talent from abroad, which gave birth to the idea of implementing a Startup Visa programme in 2017. The programme has been aimed at enabling startup founders to relocate their businesses to Estonia and benefit from the full range of perks of the first country in the world to offer e-Residency and e-voting. Additionally, the visa scheme facilitates the process of hiring talent from outside the European Union in Estonian startups. Since the programme’s inception, over 2,700 applications have been received from startups wishing to move to Estonia. Moreover, it has significantly impacted our business ecosystem since 25% of Estonian startup founders are now of foreign citizenship. As a matter of fact, in 2020 alone, Startup Visa applications arrived from 88 countries, meaning that the ecosystem is only going to get increasingly diverse.

Empowering entrepreneurial environment

“With 4 times more startups per capita than the European average, it is safe to say that Estonia is the startup capital of Europe,” Peeterson states.

Peeterson stresses that it is not only the ever-growing number of unicorns that set Estonia apart but the can-do attitude of locally based entrepreneurs. She believes that the Estonian startup ecosystem is led by inclusive individuals who are keen on lifting each other and organising incredible events. This can be seen in the commitment of the founders to give back to the startup community, whether through mentoring aspiring entrepreneurs or investing in them. An intense concentration of startups, which currently number 1,314 in total, is also fostered by a robust network of community organisations. Around 150 support organisations, from startup incubators to investment funds, are available to help accelerate your business. Startup Estonia has been honoured to work with these organisations over the years and is excited about the many ways they bolster the local startup scene.

“Estonia is a perfect place for brave hearts, independent minds, and entrepreneurial souls. Tap into the game-changing opportunities and supportive environment to supercharge your business with us!” encourages Peeterson.

Want to join the club and invest in the Estonian Unicorn Factory? Fill out our e-Consulting form, and one of our investment advisors will get in touch soon.

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