Estonia’s tech ecosystem wonder is navigating the current challenges with no signs of slowing down. According to the recent report from byFounders VC, Estonia was one of the key performers in the New Nordics’ venture scene in 2023, punching well above its weight.
The report, which covers early stage to Series A deals from 2023, counted 196 funding rounds worth €990M in total. In absolute numbers, Sweden takes the lead with €362M of invested capital. Estonia is holding strong with €75M attracted and takes the second place in per capita numbers, behind Iceland.
Another impressive stat is that Estonia has seen 30 early-stage deals in 2023, which is one more than a year before. With a slight adjustment in rounds’ size to the average of €3,7M per deal, the ecosystem is continuing to invest heavily into the next batch of unicorn founders. According to byFounders, several Estonian funds are amongst the most active in the New Nordics, including Specialist VC, Superangel, Trind Ventures and Change Ventures.
Energy & Climate were the hottest categories in the region, attracting over €195M in total across 23 deals. Fintech and DeepTech sectors also broke above €100M.
Estonia is well-represented in all top performing categories and plans to accelerate those R&D niches. The country has an action plan to reach 500 DeepTech startups by 2030, and ranks in the top-10 for effective energy transition, fuelling a wave of energy-related innovations, from smart grid management to advanced EV charging.
The reports also highlights selected companies from each country. Estonian GreenTech star Arbonics takes the spotlight there. The company operates a forest carbon platform fighting climate change and allows landowners to earn carbon income from afforestation.
It has raised €5,5M in Seed funding in 2023 and is now expanding to several new markers. “Forests store and sequester carbon and are a crucial. Arbonics helps ensure forest survival and growth by aligning landowners incentives with those of the broader society,” notes the report.
All in all, the New Nordics saw a challenging, yet productive year, conclude the authors. There’s a high level of competition for capital, but the fight for the top startups remain intense and foreign investors take more and more interest in the region. Estonia, with the first successful exit and early-stage deal already concluded in 2024, is looking ahead for one more record-breaking year.
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