The Global Startup Ecosystem Report 2023
Bold, Curious, and Unafraid: Estonia Is Where Startups Get Started
Don’t be fooled by Estonia’s relatively small size and population of 1.3 million people. The cat-like character of the Estonian people (more on that later) has fostered the creation of one of the world’s most ambitious startup ecosystems. In just three decades, Estonia has transformed itself into an international digital dynamo, with prominent institutions such as NATO relying on Estonian entrepreneurial know-how. “We’re a European powerhouse, punching above our weight when it comes to unicorns and investment per capita,” says Vaido Mikheim, Deep Tech Project Lead for Startup Estonia, a government initiative aimed at creating more startup success stories in Estonia by developing three building blocks: availability of human resources and capital, open and connected community and services, and transparent and straightforward regulative infrastructure. "But more importantly we are adventurous, always looking to have an impact, with a bit of fun along the way," he adds.
It's no coincidence that Estonia is the birthplace of some of the world’s most innovative brands, including Skype, Wise, and Pipedrive. If you’re looking for the perfect test bed for your next world-changing idea, look no further than Estonia.
Starting Up in a Matter of Minutes
If there’s one word that captures the essence of Estonia’s startup ecosystem, it would be “speed.” With a culture steeped in curiosity and efficiency, Estonia offers a friction-free path to launching a startup primed to tackle the world’s greatest, most complex problems.
“Estonians are like cats. We tend to be curious — unafraid to take risks and experiment with new ideas,” says Ettie Mikita, Marketing and Communications Lead for Startup Estonia. “We’re also pragmatic and hard-working. We value honesty and transparency, and expect the same from others.”
She continues, “We eliminate the daily drag, red tape, and anything that stands in the way of realizing your biggest dreams. As a small nation with grand ambitions, we always try hard to discover shortcuts by leveraging science and smart applications.”
When a culture known for speed and efficiency merges with a digital-first government, amazing things happen. With digital signatures and paperless communication the norm, in Estonia 99% of government services are available from the comfort of your home (perfect for staying warm and cozy during the nation’s beautiful yet admittedly long winters).
With Estonia’s groundbreaking, 100,000-member-strong e-Residency system, all it takes is an internet connection and a few minutes to securely launch, grow, and run an E.U. startup from anywhere in the world. In fact, in testament to Estonia’s digital infrastructure, Austrian entrepreneur Dominik Panosch started a business from scratch in a world-record-breaking 15 minutes, 33 seconds. (It should come as no surprise that the previous record of 18 minutes, 3 seconds was also established in Estonia.)
A Sandbox for Solving Global Problems
With over 120 startup support organizations, including science parks, accelerators, incubators, coworking hubs, and startup event organizers, Estonia delivers what Vaido calls “startup-ecosystem hygiene requirements” in spades. However, going far beyond these essential expectations is what makes the country a place where startups turn global challenges into new market opportunities.
Estonian unicorns such as Veriff, an AI-powered identity verification startup, lead a solid list of businesses that have disrupted the status quo while creating historic, positive social change in communication, commerce, food security, and more. Car-sharing, scooter network, and delivery platform Bolt raised a €628 million Series F in January 2022, taking it to a €7.4 billion valuation. The Estonian Biobank houses genetic data for more than 200,000 individuals (about 20% of Estonia’s adult population), creating a world-class research opportunity. Berkeley-based startup BioAge Labs relies on the Estonian Biobank in its pursuit to predict mortality: a bold attempt to solve humanity’s quintessential existential crisis.
Accelerate Estonia, a governmental innovation lab, ensures that Estonian startups remain on the fast track to success. Regardless of how attractive, well connected, and accommodating a startup ecosystem is, innovation is impossible without a proactive government. Through public-private partnerships, Accelerate Estonia helps entrepreneurs cut through bureaucracy and red tape faster than you can say “unicorn” (well, not really that fast, but you get the idea). Known for solving “wicked problems,” Accelerate Estonia is a launchpad for moonshot ideas, helping founders break down seemingly overwhelming challenges into smaller, bite-sized chunks.
Deep Tech Darlings
Referred to as the “New Nordic Silicon Valley,” Estonia is home to an array of cutting-edge companies. One prime example is Starship Technologies, which specializes in autonomous delivery robots. These adorable six-wheeled vehicles adorned with signature red flags make food and package deliveries more efficient, convenient, and sustainable. In concert with the growth of Starship Industries and other Deep Tech developments, the Estonian government has been moving toward what many legal professionals believe to be inevitable: granting robots status as legal entities.
Although Deep Tech is a bit of a buzzword these days, Estonians are determined to prove that the hype is real — the nation recently launched a national Deep Tech startup ecosystem development action plan. Additionally, the Ministry of Economic Affairs is working on a tax exemption scheme for R&D employees and a national Research Transfer Organization similar to Finland’s VTT or Sweden’s RISE is about to go live.
An International & Welcoming Ecosystem
Solving the problems of a diverse world requires an equally diverse startup ecosystem, where anyone from anywhere can thrive. Thirty-two percent of Estonian startup founders hail from other countries. Additionally, Estonia boasts a higher proportion of female startup founders (17%) than the rest of Europe (15%), and the number of women-led Estonian startups has been steadily increasing since 2020.
And as fun as learning the exclusive Estonian language may be, doing so isn’t necessary to thrive here. Not only are all digital services provided in English, but you’ll soon discover that, from bus drivers to village shopkeepers, a high level of English is common throughout the population.
Launching and growing a successful startup is a monumental challenge. That’s why, as a founder, it’s critical to establish your business in a place where the deck is stacked in your favor. Estonia, a nation known for its ingenuity, can boost your fledgling startup and make your unicorn-level idea a reality. Everyone involved in the Estonian startup ecosystem recognizes the challenges that founders face. Together, they have created a community that continually works to minimize friction and clear a path for success. (Vaido encourages everyone to look up #EstonianMafia.) Build your business in Estonia, the small European country that makes big dreams a reality.
Startup Estonia is covering the cost of publishing this article from the European Regional Development Fund (project number EU50651).