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Estonia leads Europe in startups, unicorns and investments per capita

As Estonia is leading the Europe in terms of startups, unicorns and investments per capita, Eve Peeterson, head of Startup Estonia, helps us to delve into the major factors behind the success of this ecosystem and how you can be a part of it.

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 most startups per capita in Europe

The State of European Tech 2021 report by Atomico highlights Estonia’s continued leadership as the most entrepreneurial European country for tech startups.

The report was published in November 2021 when the Estonian Startup Database showed 1107 startups founded in Estonia. And precisely as Atomico has predicted earlier, the number of Estonian startups has continuing to grow. Today, in March 2022, there are already 1314 startups in Estonian Startup Database. This means a 19% growth in four months and is likely ensure Estonia’s leading position as a most vivid startup hub in Europe having 5.5x as many startups per capita as the European average.

“On a per capita basis, Estonia retains its leadership position as the region’s most entrepreneurial country for tech startups,” states Atomico’s report.


Estonia has 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 it makes Estonia the leader in unicorns per capita in Europe. According to the 2020’s report by Atomico, Estonia is playing a major role in the building of $1B+ companies.

Estonia leads Europe in investments per capita

Recently, both Sifted and Crunchbase have written about how successfully Estonia manages investments.

“Estonia is pulling in the money,” writes Sifted, summarising the recent VC investment report by Atomico that says that Estonia has raised the highest number of investments per capita out of any countries in Europe.

Estonia isn’t only mastering the building of unicorns and startups, but raising money as well. “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,” writes Sifted.


According to Crunchbase, in terms of venture funding per capita, Estonia is the third globally with $1.19B total funding and $915 per capita funding.

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.


What is the Estonia’s secret power?

Eve Peeterson explains in recent issue of 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 a 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 that 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 inception of the programme, over 2700 applications were received from startups wishing to move to Estonia. It has had a significant impact on 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 5 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 sets 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. A strong concentration of startups, which currently number 1314 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 is honoured to work with these organisations over the years and 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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