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Invest Estonia opens doors for Estonian AI startups to enter Germany

Invest Estonia has opened doors for several Estonian technology companies to cooperate with the Artificial Intelligence Centre Hamburg (ARIC). The fruitful partnership with ARIC has resulted in Estonian companies signing contracts with companies among Germany's absolute business elite and helped Estonia's businesses enter the German market.

Bercman Technologies, which is listed on the alternative market First North of the Tallinn Stock Exchange and is fighting traffic fatalities by developing smart crosswalks, and the 4,110 investors who subscribed to the company’s shares in July last year will benefit from the cooperation with ARIC. “Although we have yet to reap the fruits of our cooperation, we are learning from each other and Bercman already has a starting point for entering the German market with its product,” said Mart Suurkask, CEO of the company, on their future plans.

For the local listed investor, this means, among other things, that the return earned in less than a year is justified and more can be expected if the company’s ambitions are met. Specifically, the investment made by Bercman’s investors in the summer of last year has more than doubled, as the share of the listed company, which could be subscribed to for with 3.4 euros during IPO, currently costs 7.02 euros on the alternative market of the Tallinn Stock Exchange.

“We are helping Estonian companies find financing and contracts in Germany,” confirmed Alois Krtil, head of ARIC, with whose support Bercman raised additional money from the Ministry of Transport and Infrastructure at the end of last year for the SmartWalk project. “The aim of the year-long project is to develop the predictive power of pedestrian crossings to recognise critical traffic incidents using innovative AI technologies,” explained Suurkask, who believes that it is possible to reduce the number of road fatalities to zero in 10 years.

The Germans seek broader cooperation

However, the interest and faith of the Germans in Estonian technology is broader and not limited to Bercman. According to Krtil, they are working together with several local companies. He cites Starship, Auve Tech, Flowit, Aitoldyou, Nortal, Latitude59, sTARTUp Day, Invest Estonia and ITL Cluster as examples. “We wish to connect different markets; Estonia offers an innovative environment and Germany offers opportunities in the form of large corporations and market size,” said Krtil. “We can learn from each other and contribute to the development of technology together.”

ARIC’s role and contribution for Estonian companies is that they help bring local companies and business delegations into contact with German companies. “We invite them to our international conferences and involve them in international AI development,” said Krtil. “We are also bringing Estonian companies together with the Hamburg city authorities,” he noted.

Krtil added that ARIC aims to create a critical mass of cooperating AI stakeholders across Europe. “We wish to create hotspots related to AI development across Europe and bring together ideas and talent.” He pointed out that as the network develops, it will expand even more for Estonians.

Elite customers for Estonian companies

Juhan Pukk, a partner at the IT company Flowit, points out that his company is the first full-fledged member of ARIC outside Germany and that the cooperation has given them the opportunity to be involved in the development of Europe’s largest economy with access to decision-makers. “We have discussed raising awareness for technology, law and science with ARIC leaders in several meetings and so far our opinions have always been appreciated and heard,” he said. “As a result, Flowit’s credibility in the eyes of German customers has certainly increased, which means that we have been able to establish contractual relations with the top 10 companies in Germany.”

In addition, according to Pukk, several smaller customers have been won over in Germany. “The world directly benefits from us sharing experiences and practices to create better solutions through our partnerships,” Pukk said. “In Estonia, Flowit is not the only one to benefit from working with ARIC – other Estonian IT companies will also be able to offer their solutions and knowledge to the market, which is said to be very difficult to get into, but even harder to get out of.”

As for Bercman, working with ARIC means access to broader networks. Suurkask mentions as an example that in addition to ARIC and Bercman, the University of Hamburg and NATIX GmbH are also involved in the above-mentioned SmartWalk project. “Participation in this project provides an opportunity for creating new smart street infrastructure development concepts and for testing them,” explained Suurkask.

In a broader perspective, Suurkask believes that Bercman’s cooperation with the Germans will help bring about major changes in traffic infrastructure and safety for both Estonia and the world. “In a joint project with ARIC, the development of AI and smarter urban infrastructure is certainly in the interest of everyone involved with traffic on a daily basis.”

Invest Estonia opened the door

Riina Leminsky, the foreign representative for Invest Estonia in Germany, agrees with Pukk that entering the German market is difficult and it will take time to gain trust among the companies there. “We have been cooperating with the founders of ARIC for the last five years and as a rule it takes a long time to build reliable business and partnership relations in Germany – Hamburg is still very conservative when it comes to foreign relations, they think big and the small Estonia is often left out of their plans,“ she said.

According to Leminsky, the ice was broken mainly in the last few years, mostly by building personal relationships. “We have managed to make the Germans interested in Estonia,” she said. “Two years ago an MOU or Memorandum of Understanding was signed between ARIC and Enterprise Estonia. The initiative came from the Germans, because their leaders have been more than satisfied with their visits to Estonia. In addition, my work has been recognised with the title of ARIC ambassador.”

According to Leminsky, the cooperation between ARIC and Invest Estonia (a part of Enterprise Estonia) has become a bridge between Estonia and Germany. “ARIC Hamburg has set itself the goal of shedding light not only on the economic and scientific aspects, but also on the perspective of society’s adaptation to and further development of AI,” she said. “Estonia creates great added value here – innovations in the key technology fields, such as AI, stem from smart connections and interdisciplinary cooperation,” Leminsky explained.

She added that communication between business, science and politics already exists in both Estonia and Hamburg. “The German public sector is very interested in putting the services of our Bürokratt and artificial officials into practice.”

Leminsky cited the AI Showroom in Hamburg, created on the example of the Estonian e-Briefing Centre, as one of their success stories, to be inaugurated by a joint ribbon cut by Westhagemann, the Minister of Economic Affairs of Hamburg, and Andres Sutt, our Minister of Entrepreneurship and IT. “In addition to Lufthansa Industry Solutions and other companies in the region, our AuveTech and Starship solutions will also be represented in the showroom.”

“Estonians and Germans have a similar business culture, we exchange ideas, shake hands and build trust, whilst our flexibility, speed and ability to find quick solutions impress the Germans,” Leminsky concluded.

Read more about Estonia’s IT sector here. If you wish to do business with us feel free to send us an e-Consulting request to get more detailed information.

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