When it comes to AI innovation in Europe, Estonia, one of the most digitally prominent nations, has also claimed the best spots. Two recent studies show it entering the top ranks in both AI startup creation and attracting investments, promising further growth in the sector.
According to research conducted by VC firm Earlybird and published by Sifted, Estonia boasts a record 10 AI startups per million people, with notable companies like Veriff leading the charge. In terms of overall numbers, the United Kingdom leads the pack with 334 AI startups, followed by Germany with 167 and France with 135, but they fade away in the per-capita comparisons to Estonia.
Backing innovations with investment attractiveness
The country has also made notable strides in attracting investment, particularly in the field of generative AI. Powered by Generative Adversarial Networks (GANs), this is a branch of artificial intelligence that focuses on creating and generating new content. Unlike other AI techniques that help to analyse and understand existing data, GANs have the ability to generate new things, such as images, music, or even text, that mimic the characteristics of the training data they have been exposed to.
Estonia secured the ninth spot on the list of countries attracting the most investments in generative AI startups, reports Dealroom. In 2022, Estonia has seen over $70M of venture capital poured there, with notable investments in companies like Ready Player Me, a cross-game metaverse avatar platform that raised $56 million from world-class investors. Another example is an Estonian negotiation AI Pactum, which closed €19M to further expand in the US and Europe and enable enterprises to unlock value in deals they typically can’t negotiate on their own.
Furthermore, several prominent Estonian entrepreneurs, including Taavet Hinrikus (co-founder of Wise), Jaan Tallinn (co-founder of Skype), and Sten Tamkivi (founder of Teleport and former Skype executive), have actively invested in generative AI startups, showcasing Estonia’s commitment to fostering innovation in the field.
AI also plays an increasing role in attracting other types of deals for Estonia. Invest Estonia’s ComparEST is an online tool that uses machine learning, academic research and investment advisors’ expertise to present data-driven insights on factors such as business environment, labour market and taxation. It has been shortlisted for Emerging Europe’s Modern and Future-proof Policymaking Initiative award and listed among UNESCO’s top 100 AI projects.
With all of those, Estonia has once again proved its tech-savvy reputation and emerged as a significant player in the European AI startup landscape. With a high concentration of AI startups per million people and notable investments in generative AI, it continues to attract attention and interest from both investors and entrepreneurs alike.
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