Baltic startup scene report: Estonia

Baltic Startup Scene Report is a collection of various data sources and perspectives of start-up ecosystems in the Baltic States. The report delves into such important topics as investments in start-up companies in the Baltics and startups for review, the most outstanding investment agreements, regulation of start-up visas, digitization in the region, corporate innovation, and more.

AIN.TECH has selected the key information about the Estonian investment market according to the Baltic Startup Scene Report 2019/2020 to make it easier for investors and startup founders to learn about the country’s investment ecosystem. 

Estonia hosts the biggest startups in the region and has chosen to leverage its brand as a digital nation well beyond the startup ecosystem. The number of startups in Estonia has grown by 38% since 2019. About 150 new startups founded in 2019 and 66 new startups have been founded in 2020.

The number of seed and pre-seed rounds:

  • 23 pre-seed rounds and 13 seed rounds in 2019 H2;
  • 25 pre-see rounds and 11 seed rounds in 2020 H1.

The biggest deals of 2020: Estonian Bolt has received more than $120 million from London-based investment firm Naya Capital Management. Veriff also secured a pretty big deal of $16 million.

Spotted startups from startups to watch lists that have raised 1M-5M afterward in 2020 H1: Cachet (Extended Fintech), Pactum, and Dashbird (B2B and SaaS).

Where startups seek investments: 78,8% Venture Capital, 21,2% Government funds.

Which areas of startups have been affected the most in 2020: 55,9% sales

The biggest startup accelerators: Superangels and Startup Wise Guys

Most active local VC funds:  Change Ventures, Startup Wise Guys, Karma Ventures, Tera Ventures, United Angels VC, Trind Ventures, Business Angel investments

Foreign VC Funds investing in Estonian startups: Icebreaker Vc, Superhero Capital, Nordicninja Vc, Black Pearls Vc (Poland), Speedinvest (Austria)

Business angel investments

Estonia has the oldest and the most active Business Angel Network with 158 members (as of Q2 2020). EstBAN is looking for startups that need between 20k-500k euros in the capital in any industry except real estate and gambling. 

  • Total amount invested in startups in 2019: € 9.28M 
  •  Investment deals in startups in 2019: 375
  • The average investment per 1 startup: € 38K 

In which verticals do investors invest: Software as a Service, Mobility, Health, IoT

What effect has Covid-19 had on the startup scene: positive 36,5%, negative 34,9%, neither positive nor negative 22,2%, no effect 6,3%.

What is the focus of Estonian startups: 57.1% Software as a Service, 9.5% Health, 6.3% Property technology, 4.8% Mobility.

Startup Visas in Estonia

  • The time it takes to register and receive a decision: 1-2 months 
  • Price: €60-80
  • Length of stay: 1 year
  • The length that can be renewed: 183 days + 5 years
  • Amount of financial “buffer” required in the bank account: 140eur x12 months = 1680 EUR per year

The total number of issued startup visas to founders from 2019 to July 2020: 291 in 2019 and 48 in 2020. 27% approved.