The Estonian startup sector is ending 2022 on a strong note, with steady growth in terms of jobs and investments, reports the Q3 roundup from Startup Estonia. Although not taking into account some later rounds and exits, it gives a bright outlook on the innovation scene, covering employment, funding and exits, and the growing importance of DeepTech startups.
But first, some general facts. As of the third quarter of 2022, the Estonian Startup Database listed 1449 startups, 75 of which were created this year. The largest sector in terms of active startups is Business software and HR, followed by FinTech and Consumer products and services.
Estonia’s blooming DeepTech sector
The Estonian startup sector also includes a growing number of DeepTech startups. These startups are focused on developing a technology based on scientific and engineering research and often have the potential to significantly impact society and the economy. Examples of Estonian DeepTech startups include Starship Technologies, which has developed the world’s cutest delivery robot, and Skeleton Technologies working on advanced energy storage solutions such as SuperBattries and ultracapacitors.
Estonia’s funding and exits in 2022
Estonian startups have signed 61 funding deals totalling 1.2 billion euros in the first nine months of 2022, more than in the previous year. Investment figures are heavily influenced by Bolt‘s massive investment round in January, which totalled €628M. A number of other Estonian startups have also raised large investments in 2022, including one of our freshest unicorns Veriff, Starship Technologies, and Ready Player Me.
Strong turnover growth of 60%
Estonian startups generated €1.5B in turnover during the first three quarters of 2022, making a strong YoY growth of over 60%. The biggest contributors to this figure were Wise, Bolt, Swappie, Veriff, and Monese.
Talent hiring is on the rise
Estonian startups employed 9,857 people at the end of Q3 2022, a 28% increase from a year earlier. Altogether, Estonian startups have paid 134 million euros in employment taxes during 2022, a 48% increase from the previous year. The overall demand for labour in the ICT field is high, and the global trend of decreasing the startup workforce is not currently visible in Estonia. The Startup Visa program has also played a significant role in hiring labour from abroad, with one-third of employees hired using this program.
The bright future ahead
“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.
As the year comes to a close, it’s clear that the future of the Estonian startup sector is bright. The growing number of DeepTech startups is a positive development, as these companies have the potential to make significant contributions to society and the economy. In addition, the demand for labour in the ICT field is high, and the proportion and importance of startups in this field have increased. The Startup Visa program has also contributed to the sector’s growth by allowing the hiring of talents from abroad. Overall, the Estonian startup sector has made decisive steps towards the end of a challenging year.
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