Estonia’s New Generation of Startup Founders Shows Exceptional Growth
According to Startup Estonia and the Estonian Tax and Customs Board, the turnover of Estonia’s startup sector reached €1.2 billion in the first quarter of 2025, representing approximately 40% growth compared to the same period last year. At the same time, startups less than five years old increased their turnover by more than 60% and attracted nearly 70% of all startup investments.
Startup Estonia Managing Director Vaido Mikheim noted that the focus of Estonia’s startup ecosystem has continued shifting from investor capital to customer revenue. This trend, first observed last year, shows both younger and more mature startups placing greater emphasis on acquiring customers and growing sales revenue.
“Today’s market conditions require startups to demonstrate real customer demand and, ideally, paying customers. It is encouraging to see younger startups keeping pace, and the confidence investors continue to place in the new generation of founders demonstrates that they are building companies with serious ambition,” said Mikheim.
The highest turnover in the first quarter was once again generated by Estonia’s startup sector leader Bolt, with revenue of €405.4 million. Other top-performing companies included:
- Pipedrive – €121 million
- Wise – €34.8 million
- BetPawa – €32.8 million
- Sunly – €29 million
Mikheim highlighted several noteworthy trends from the first quarter.
“The startup sector’s strong revenue growth should hopefully inspire optimism and ambition throughout the wider economy. While turnover among all taxpayers grew by less than 5% over the year, startup sector performance demonstrates that the situation is far from hopeless. Another highly anticipated trend in both Estonia and Europe is startup exits. While there were 11 exits during the whole of last year, five startups have already found new owners during the first three months of this year alone,” said Mikheim.
He added that the coming quarters will determine whether these developments become long-term trends.
Five Startup Exits in the First Quarter
A total of five startup exits took place during the first quarter of 2025.
- Marketing startup Promoty was acquired by competitor Modash.
- Smart parcel locker developer Parcelsea sold its business to Ukrainian company Jetbeep.
- Swedish lending marketplace Clar acquired Estonian fintech startup Fiizy.
- Estonian gamified marketing startup Adact was acquired by a U.S.-based company with Israeli roots, which subsequently established a development center in Tallinn.
- International private equity fund Bregal Milestone acquired a majority stake in Estonian transportation technology company Ridango.
Investment Activity Declined Compared to Last Year
Estonian startups raised a total of €92.8 million during the first quarter, representing a 40% decrease compared to the same period in 2024.
There were 14 investment transactions, 11 fewer than in the first quarter of the previous year.
The largest funding rounds were secured by:
- Blackwall – €45 million
- Stargate Hydrogen – €11 million
- Hoovi – €8 million
- Elcogen – €5 million
- Gridraven – €4 million
- Frankenburg Technology – €4 million
- Cino – €3.5 million
The average investment round reached €6.6 million, slightly above the €6.1 million average recorded during the same period a year earlier. Thirteen investment rounds exceeded €1 million, remaining largely in line with last year’s level.
Younger Startups Attract the Majority of Investment Capital
Startups up to five years old raised a combined €73 million during the first quarter, accounting for approximately 70% of all startup investments in Estonia.
The largest investment round was secured by Blackwall, whose €45 million funding round was the largest startup investment of the quarter. Other young startups attracting significant investment included Stargate Hydrogen, Frankenburg Technology, and Cino.
Methodology Note
Startup Estonia notes that turnover figures are based on VAT declarations submitted by companies to the Estonian Tax and Customs Board and published on a quarterly basis. As a result, these figures are not directly comparable with annual financial statements.
Estonian startup sector statistics include both startups in the traditional sense as well as growth companies more than ten years old and Estonian technology companies that have reached acquisition or exit stages.
Startup Estonia is a national programme dedicated to developing Estonia’s startup ecosystem, supporting the creation of new startups and helping them grow into international success stories. The programme is implemented by the Estonian Business and Innovation Agency (EIS) and funded by the European Union.
Media Contact
Marina Bachmann
Communications Partner
Startup Estonia
[email protected]
+372 5645 6600
estonia.ee/” target=”_blank” rel=”noopener noreferrer”>www.startupestonia.ee
