Like many people around the world right now, Sten Tamkivi is currently working from home.
After joining Skype as an early executive and helping build it into a unicorn startup, Tamkivi founded his own Estonian startup, Teleport, with fellow former Skype colleagues. They build software that helps people find the best place to live and work around the world – and move there. That company has since been acquired by Topia where he is now Chief Product Officer.
The ‘startup’ he is growing at home now is not a business, however, but rather the baby that he is currently on parental leave to care for.
“That’s my next big thing at the moment,” smiles Tamkivi. “Successfully completing my paternity leave and releasing a happy and healthy toddler into the world.”
Skype was the first unicorn in Estonia and also the whole Nordic region. Tamkivi is conscious of the fact that Europe as a whole still has relatively few unicorns compared to the US and Asia. Estonia is a notable exception, however, having developed even more unicorns since Skype.
The baby may be entering a world of nearly eight billion people but a mere 1.3 million of them live here in Estonia, a northern European nation of forests, bogs, and medieval streets. Despite this, Estonia is now the birthplace of FIVE so-called unicorns – a company valued at more than $1 billion. Skype is one of them. The others are TransferWise, PlayTech, Bolt, and now Pipedrive just added to the list. Beyond that, Estonia has a thousand more promising startups – nearly five times the European average per capita – eager to be the next Unicorn. So what makes Estonia of all places such an unlikely unicorn factory, you might be wondering. We asked some of the key insiders, like Tamkivi, for their perspective.
He attributes the success of Estonia’s startups to a supportive ecosystem, which is welcoming to fellow founders from around the world, a regulatory environment designed to support investment and global growth, a strong digital infrastructure, and a healthy work-life balance that supports creativity.
“Contrary to popular belief, being part of a small country is a big advantage. We have to build small teams, be agile, and achieve more with less. That’s actually the foundation for a good startup.”
One example of that positive work-life balance is Estonia’s parental leave policy, which Tamkivi is currently benefiting from. It is, arguably, the best parental leave policy in the world and includes 1.5 years of a full wage paid by the state to either parent, which can be shared on a rolling basis. An increasing number of male founders are taking at least a portion of this responsibility and therefore establishing a trend that positively impacts the entire family.
Ultimately though, Tamkivi says that whether startups register as legal entities in Estonia is less important to our country as the quality of connections they have here. TransferWise, he notes as an example, is registered abroad but still has a deep and mutually beneficial connection with Estonia, something he is passionate about.
Tamkivi has a key role in one other Estonian startup to do just that – the actual state itsef. He’s on the board of the Estonian government’s e-Residency programme, which was created in 2014 to scale up the country and create more meaningful connections around the world by offering Estonian digital services to citizens of other countries. The programme has been so successful that several countries have launched their own variations of e-Residency while many more are planning to launch their own in the near future.
Tamkivi is also an angel investor, although he is hesitant to predict Estonia’s next unicorn before they have the results in the bag because, he says, there are so many amazing teams out there with potential. There are huge pains in global markets waiting to be solved, but that alone is still not enough. Tamkivi says startups also need a massive effort and a sheer amount of luck, even with a supportive business environment like Estonia’s.
Estonia’s next unicorns
Tamkivi highlights Salv, Pactum, Xolo and Supervaisor as early stage startups in Estonia with that potential to solve huge global pain points, and also notes Veriff, Starship Technologies, and Skeleton Technologies as the Estonian startups that are currently closest to a $1 billion valuation.
“Ten or fifteen years ago, a private tech company valued at $1 billion seemed so absurd,” reflects Tamkivi. “But the full power of technology is changing that. Now investors are talking about decacorns, which is a company valued at over $10 billion, or unicoins, which is a crypto company whose tokens have a market value of more than $1 billion.”
Ultimately though, Tamkivi says these valuations are just a moment in time, important as an indicator of market expectations, but not as important as the way in which these companies impact real people’s lives.
“We could talk about Bolt now being worth more than a $1 billion, but it’s more important that it helps put bread on the table of 1.5 million drivers around the world and has helped 50 million people get to where they need to go. That’s the actual impact worth measuring. We must also consider how they reduce the negative impact of that, such as through environmental sustainability initiatives like the Tech Green Pledge.”
Tamkivi is equally impressed by Pipedrive, Estonia’s fifth unicorn, for similar reasons.
“Pipedrive has 80,000 companies using them,” he points out. “That translates to a few million humans who can do their work better as a result.”
Relatively few of these people may know that Pipedrive was born in Estonia – or perhaps even be able to find it on a map – but the benefits of Estonia’s business environment are now reaching them too.
If you want to invest in a startup that could be the next unicorn, step inside Estonia’s unicorn factory and meet the founders hard at work here.