Celebrated as Europe’s unicorn factory, Estonia’s startup ecosystem now navigates a complex reality of mature growth. In a year marked by global economic volatility, the tech sector has shown remarkable resilience, outperforming the broader economy while facing its own challenges, according to a yearly roundup from Startup Estonia.
Sustainable growth
The ecosystem employs 14,396 people, a slight 1.4% decrease from 2023. According to Statistics Estonia, every 38th working person in Estonia has connections to the startup sector. Employment taxes grew to €366.9 million, a 4.3% increase from the previous year.
Despite all the economic headwinds, the sector generated a record turnover of €3.9 billion—a 14.7% increase from 2023—while the broader Estonian economy is expected to grow in 2025.
Established companies remain crucial for employment, with the top 10 employers—led by Wise (2,006 employees) and Bolt (1,329 employees)—accounting for 45% of sector jobs. Employees earn an average gross monthly salary of €3,650, double the national average.
Investment landscape shift
Investment in Estonian startups reached €326.6 million in 2024, a 23% decline from 2023 and the lowest annual figure in five years. This aligns with broader European trends as venture capital activity adjusts following the peak of 2021-2022. In per capita numbers, Estonia is still among the best-funded nations globally.
“The funding environment in 2024 remained challenging, with investors expecting stronger performance for the risk they are taking,” notes Kaari Kink, Investment Manager at Superangel.
Estonia closed 57 investment deals, the largest of which went to Starship Technologies (€90 million), Stargate Hydrogen (€42 million), and Elcogen (€30 million).
Not surprisingly, DeepTech has become a dominant force, accounting for 63% of total startup investments in 2024. These companies:
- Generated €325 million in turnover (+19.3% year-over-year)
- Paid €58 million in employment taxes (16% of the sector total)
- Employed 2,439 people (17% of sector employment)
“The defence sector is rapidly emerging as a key player within the DeepTech industry,” says Inga Kõue, DeepTech Project Lead at Startup Estonia. “Notably, three of the top five companies in the sector are defence-related.” A new €100 million government DefenceTech fund should further accelerate this growth.
Ecosystem builders
The sector’s workforce remains diverse and puts Estonia among the global talent hubs:
- 37.6% women and 62.4% men
- 31% of employees have foreign citizenship
- 67% of employees hold bachelor’s degrees or higher
- 50% work as top specialists
The average Estonian startup founder is 39 years old, with 59% holding higher education degrees. Female founders are even more educated—77% have higher education qualifications compared to 55% of their male counterparts. However, there’s much room for reaching the actual balance — women represent only 16% of founders.
Looking ahead with optimism
Estonian success doesn’t go unnoticed. The European Innovation Scoreboard 2024 recognizes Estonia’s remarkable progress, with a 27-point increase in its performance index between 2017 and 2024, elevating it to the “Strong Innovators” category. Yet, ecosystem stakeholders already strive for new heights.
Hedi Mardisoo, CEO of Cachet and Board Member of the Estonian Founders Society, acknowledges mixed feelings about 2024: “While the past year was challenging, it was also successful. The revenue growth of startups in the last quarter gives hope that many other Estonian startups may share a similar experience.”
Vaido Mikheim, Head of Startup Estonia, remains cautiously optimistic: “We hope to move toward positive growth in 2025 as the economic environment shows signs of overall improvement.” He encourages entrepreneurs to “build new companies, work hard, and stay optimistic. Success follows perseverance!”
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