After a few trying years, the tech ecosystem is finding its footing. A report by dealroom.co and Iron Wolf Capital, with support from Startup Estonia, recently painted a bright picture of the DeepTech, AI, and CleanTech startup scene in the Baltics. The report dives into the region’s rapid growth and surging investor interest, with Estonia ranking first in many key categories.
Despite all the turbulence, in 2023, the country led the region in total VC investments, attracting over €334M, and per capita numbers, standing at €247. The nearest contender, Lithuania, reached €105 per capita, while the CEE average is just €12.
DeepTech powerhouse
More will come, say the authors, highlighting a strong pipeline of promising startups in the hottest areas. With over 260 DeepTech and 100 AI startups analysed, the Baltics have a significant concentration of innovative companies and the number is growing. Some — like Klaus — have already made a successful exit, but most are on their way there.
Since 2019, combined enterprise value of DeepTechs in the region has grown by 3,6X, reaching over €2B. All in all, DeepTech & AI startups now account for 20% of the Baltic startup ecosystem by value, which is a record share. This impressive growth outpaces other European regions, solidifying the Baltics’ position as a rising DeepTech hub. Estonia, with its reputation as a proven test bed with excellent expertise, is leading the wave.
The figures could go higher, as investment in DeepTech is booming. A total of €238,9M has been invested into the Estonian startup sector during the first half of 2024. In total, there have been 35 new investment deals, including 17 deals valued at least €1M or more. By way of comparison, in the first half of 2023, there were 34 new investment deals, totaling €119,3M.
The biggest investment in the first half of 2024 was raised by Starship Technologies (€90M), Stargate Hydrogen (€42M), Elcogen (€30M), Tuum (€25M), Bot Guard (€12M), Bisly (€6,2M), Eleport (€5M), Sensus Q (€3,8M), Planet 42(€3M), and GScan (€3M).
Still, much work is yet to be done. “DeepTech can play an important role in solving complex economic and societal problems, but itʼs a long and bumpy road to positive impact,” urges Vaido Mikheim, DeepTech Sector Project Lead at Startup Estonia.
In the bigger picture, Estonia is gearing up to become a global hub for DeepTech startups by accelerating the development of research- and technology-intensive entrepreneurship. In 2023, Startup Estonia and the Ministry of Economic Affairs and Communications prepared an action plan to create a supportive economic environment for the DeepTech industry. The plan aims to double the number of DeepTech projects by 2025 and increase it five times by 2030. By the start of the next decade, the country should have more than 500 DeepTech startups. None of this work can be done in isolation. Estonia, the world leader in unicorn startups per capita, has positioned itself perfectly to take the lead in setting up the Nordic DeepTech valley, collaborating across the region to to compete together on major markets in America, Asia and Europe.
Interested in investing in Estonian DeepTech and tapping into the most productive ecosystem? Don’t miss TechTour DeepTech & Defence in Tallinn. Held in October, this is an investment programme and 1.5-day live event in Tallinn designed to help later-stage entrepreneurs in DeepTech and DefenceTech. It will bring a cross-border pool of active investors to the region together with the most promising innovative companies in Estonia, the Baltics & Nordics, and across Europe.
Meanwhile, make the most of our 1:1 e-Consulting service to get the best personalised advice about investing in Estonia.
