While small, the Estonia startup ecosystem is growing very rapidly, building on the several success stories it has produced, Startup Compass writes in its blog post on Estonia Startup Ecosystem Report.
Skype, the world’s largest P2P communications platform, is oftenconsidered the trigger of Estonia’s emerging startup ecosystem. Skype’s acquisition by eBay for $2.6 billion in 2005 put the Baltic state on the global map of innovation and fueled it with financial resources and startup experience. The FinTech startup TransferWise, among others, re-confirmed that Estonian startups can be globally competitive with a $58 million Series C round in January 2015 led by renowned Silicon Valley firm Andreessen Horowitz.
Whether directly or indirectly, the government has been supporting the ecosystem and has helped it gain momentum. Initiatives such as e-government, the digitization of public agency processes, and e-Residency, offering foreigners a government-issued digital identity and the opportunity to run a trusted company online, have been well-received by the startup community. Accordingly an impressive 66% of Estonian startup founders expressed satisfaction with regards to the national government whereas the global average lies at only 25%.
The private sector has been very active as well. The establishment of many accelerator programs and co-working spaces as well as the development of a growing investor community have been crucial in fueling the ecosystem with know-how and capital. The contribution of Skype alumni is notable, with several early employees becoming angel investors and the co-founders starting an active venture investment group.