Estonia is well-known as a startup nation, capitalising on its most precious resource — a highly educated and tech-savvy population. The last few years, marked by global economic uncertainties, have tested the resilience of the Estonian startup ecosystem. Yet results are telling: in the first half of 2024, the startup sector’s turnover was up 11%, and the companies raised twice as much compared to 2023.
This confidence has translated into employment, says a recent report from Startup Estonia, sending clear signals that the Estonian ecosystem is on a steady path and ready for sustainable growth again.
At the end of Q2 2024, startup companies in Estonia employed 13,498 people locally, a 4% decrease from the previous year’s 14,045. However, this figure has remained largely unchanged since the end of 2023, showing a stabilization in the sector’s workforce. With investor confidence increasing, startups are expected to drive up their hiring numbers soon.
Interestingly, when considering all individuals who worked at least one day in startup-sector companies during the first half of 2024, the number rises to 16,164. This means that approximately one in every 43 employed persons in Estonia has had some involvement with the startup sector this year. Startup nation it is!
The top 10 startup companies account for 44% of new jobs created in the first half of 2024. Leading employers include Wise, Bolt, Playtech, Swappie and Pipedrive. These numbers line up with other indicators — Wise, Bolt, and Pipedrive rank among the 10 most attractive companies to students in economics, management, natural sciences, and technical fields, according to a Kantar Emor employer reputation study. It’s also unsurprising that 69% of startup employees have higher education degrees.
Estonia itself might be compact, but it’s a giant talent magnet. Currently, 32% of foreign tech workers come from abroad (5.3% EU, 26.9% non-EU). The proportion of higher education among foreign employees in Estonia’s startup companies is even higher, at an incredible 84%.
This peak is powered by the Estonian Startup Visa, which helps talented specialists and founders get a hassle-free path to relocation. Companies founded using the Estonian Startup Visa paid €1.6M in employment taxes (30% increase from 2023), and employed around 140 people. Their growth is way above average too, with turnover reaching €34.9M, up 28%.
Startups are people-first, and in Estonia, that also means making strides in diversity and equal opportunities. 37% of all tech employees are women. The proportion is less significant among founders, remaining at around 16%. Interestingly, female founders generally have a higher level of education, with 78% of women and 57% of men having undertaken tertiary studies.
While startups are sometimes equated with youth, a bit of experience doesn’t hurt, and the industry has been around for long enough to change and grow, too. The average age of startup founders is 39. The largest group of employees (46%) is also in the 31-40 bracket, followed by 35% in the 21-30 segment.
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