Sector insights — Startup Estonia

With nearly 10 000 jobs and 53 million EUR paid in employment taxes, along with 568 million EUR in generated turnover, the Estonian startup sector is proving to be resilient in its growth plans. Despite a decline in both the quantity and frequency of investments - indicative of the global economic downturn and causing many investors to keep their golden gunpowder - the industry has consistently demonstrated its ability to adapt quickly to challenging circumstances. As of the end of April 2023, Estonian Startup Database is home to 1460 startups.

More information about the latest developments in the Estonian startup sector can be found in the latest blog post HERE. Additionally, insights into sectoral developments are described under “Sectors” on the left.

Startups in this sector

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AdTech & Creative Tech

Sector covers technologies used in advertising, marketing, media, entertainment, and creative industry. It captures different types of analytics, monitoring and digital tools and systems used in the context of advertising and marketing. Here, we also count startups, containing technologies that use manufactured or created components to enhance or make possible any sort of entertainment experiences (including events and its management tools) and which disseminate, store or produce media (including TV & film) content. Creative technology encompasses art, fashion, digital product design, digital media or advertising and media made with a software-based, electronic and/or data-driven engine.

Sector developments

AdTech & Creative Tech sector turnover accounted for 2% of the total turnover generated by the startup sector in the I quarter of 2023. Compared to the last quarter of 2022, we can see a slight decrease in turnover (-10%) and in employment taxes paid (-11%) and decrease in the number of employees in the sector (-18%). Three companies (ViisTek Media OU, Marketing Sharks and shoproller) became matured. From that point on, data from these companies is no longer reflected in statistics and they are added into the Matured and Exits section in the database. Please note, comparisons with 2022 are also affected by Adcash reaching maturity status in the third quarter of 2022.

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Advanced Manufacturing & Industry

It is a broad set of enabling technologies, processes and practices that businesses from a wide range of sectors can adopt to improve their productivity and competitiveness. Advanced manufacturing involves smart technology to improve traditional manufacturing of products and/or processes. It also includes fields like industrial robotics, additive manufacturing, 3D printing, advanced materials, industry 4.0, nano-materials and industrial IoT.

Sector developments

Advanced Manufacturing & Industry turnover accounted for 2% of the total turnover generated by the startup sector in the I quarter of 2023. Compared to the last quarter of 2022, we can see an increase in the number of employees in the sector (21%), in employment taxes paid (19%) and in turnover (16%).

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AgTech & FoodTech

Sector covers technologies used in agriculture, forestry, fishing,
hunting, animal husbandry, food and beverage fields, horticulture, and aquaculture with the aim of improving yield, efficiency, and profitability through information monitoring and analysis of relevant indicators such as weather, pests, and soil and air temperature. Also, scientifically-driven farm practices, equipment or processing including bio-engineered, transgenic crops, proprietary breeding, GPS, water management and improved equipment, conservation-based best management practices, food manufacturing and related advancements. Food technologies consists any technology applied to the production, selling (including supply chain and distribution), or serving food and beverage.

Sector developments

AgTech & FoodTech startups turnover accounted for 0,3% of the total turnover generated by the startup sector in the I quarter of 2023. Compared to the last quarter of 2022, we can see a slight increase in employment taxes paid (4%) and a slight decrease in the number of employees in the sector (-14%) and decrease in turnover (-22%).

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Business software & HR

Solutions (including services) and software that are designed to integrate multiple facets of a company’s business through the interchange of information from various business process areas and related databases. The sector also includes technology and software to provide legal services. Business software aims to improve the enterprise's productivity and efficiency by providing business logic support functionality. Services provided by enterprise software are typically business-oriented tools, such as business and project process management and resource planning, documentation management, human resource management, collaboration, payment and billing systems.

Sector developments

Business software & HR sector turnover accounted for 9% of the total turnover generated by the startup sector in the I quarter of 2023. Compared to the last quarter of 2022, we can see an increase in generated turnover (21%) and slight increase in employment taxes paid (8%) and a slight decrease in the number of employees in the sector (-4%). One company (zazler) became matured. From that point on, data from this company is no longer reflected in statistics and they are added into the Matured and Exits section in the database.

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CleanTech

Clean technology is an umbrella term which is used to define technologies which optimize the use of natural resources, produce energy from renewable sources, increase efficiency and productivity, generate less waste and cause less environmental pollution. CleanTech is comprised of sustainable solutions in the fields of energy, water, transportation, agriculture and manufacturing, including green technologies, smart city solutions, advanced material, smart grids, water treatment, efficient energy storage and distributed energy systems.

Sector developments

CleanTech startups turnover accounted for 2% of the total turnover generated by the startup sector in the I quarter of 2023. Compared to the last quarter of 2022, we can see a decrease in turnover (-25%) and slight decrease in employment taxes paid (-5%) and a slight increase in the number of employees in the sector (1%). One company (Airpatrol) became matured. From that point on, data from this company is no longer reflected in statistics and they are added into the Matured and Exits section in the database.

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Communication

Sector covers technologies used to create, store, transmit, or share information. It includes telecommunication, communications equipment and services, networking solutions and services (also social media and social networking) and internet technologies. Telecommunication is the transmission of signs, signals, messages, words, writings, images and sounds or information of any nature by wire, radio, optical or other electromagnetic systems.

Sector developments

Communication startups turnover accounted for 3% of the total turnover generated by the startup sector in the I quarter of 2023. Compared to the last quarter of 2022, we can see a slight increase in employment taxes paid (5%) and a slight decrease in turnover (-2%). The number of employees in the sector remained at the same level as they were at the end of 2022. One company (Snackable) made an exit and one company (Warren) became matured. From that point on, data from this company is no longer reflected in statistics and they are added into the Matured and Exits section in the database.

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Consumer products and services

Consumer products and services are electronic or digital equipment, software and services intended for everyday use, including smart devices and software used for entertainment, communications and home-office activities. It includes consumer electronics and home electronics. Apart from traditional consumer electronic products like TVs, smartphones, it includes consumer IoT, AR/VR devices, fitness and wearables, consumer drones, consumer robots, consumer hardware, among others.

Sector developments

Consumer Products & Services startups turnover accounted for 6% of the total turnover generated by the startup sector in the I quarter of 2023. Compared to the last quarter of 2022, we can see a greater increase in turnover (75%) and a slight decrease in employment taxes paid (-3%) and in the number of employees in the sector (-3%).

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CyberTech

Cybersecurity is the body of technologies, processes, and practices designed to protect networks, computers, programs, and data from attack, damage, or unauthorized access. It includes application security, information security, network security, disaster recovery, business continuity planning, operational security, and end-user education.

Sector developments

CyberTech startups turnover accounted for 8% of the total turnover generated by the startup sector in the I quarter of 2023. Compared to the last quarter of 2022, we can see a slight increase in turnover (13%) and a slight decrease in employment taxes paid (-2%) and in the number of employees in the sector (-12%).

Startups in this sector

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SpaceTech

As the space environment is a fairly novel setting, attempting to work in it often requires new tools and techniques. Space technology includes spacecraft, satellites, space stations, and support infrastructure, equipment, and procedures.

Sector developments

It is important to note that previously the sector was called DeepTech & SpaceTech, but from the second quarter of 2021, we have decided to change the sector name, as DeepTech is a horizontal sector. So we have moved all the DeepTech startups into different sectors based on their main activity field. SpaceTech startups turnover accounted for 0,9% of the total turnover generated by the startup sector in the I quarter of 2023. Compared to the last quarter of 2022, we can see an increase in turnover (48%) and in employment taxes paid (21%) and in the number of employees in the sector (18%).

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EdTech

Education technology generally describes the digitization of education services and business models. Education technology refers to an area of technology devoted to the development and application of tools (including software, hardware, and processes) intended to redesign traditional products and services in education. It includes software providers or vendors delivering technology solutions to schools at all levels and new and emerging models of delivering better and smarter learning.

Sector developments

EdTech sector startups turnover accounted for 0,6% of the total turnover generated by the startup sector in the I quarter of 2023. Compared to the last quarter of 2022, we can see a slight increase in turnover (10%) and in employment taxes paid (8%) and in the number of employees in the sector (2%).

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FinTech

Financial technology describes the evolving intersection of financial services and technology. It aims to improve existing processes, products, and services in the financial services industry (including insurance) via software and modern technology. Anywhere technology is applied in financial services or used to help companies manage the financial aspects of their business, including new software and applications, processes and business models. FinTech products and services can be found within retail, corporate and investment banking, asset management, transaction banking, insurance, crypto finance and several others.

Sector developments

FinTech sector startups turnover accounted for 8% of the total turnover generated by the startup sector in the I quarter of 2023. Compared to the last quarter of 2022, we can see a slight increase in employment taxes paid (3%) and number of employees in the sector (1%) and a slight decrease in turnover (-9%). One company (Ignium) made an exit. From that point on, data from this company is no longer reflected in statistics and they are added into the Matured and Exits section in the database. FinTech sector is the biggest contributor in employee count and employment taxes paid during the I quarter of 2023.

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Gaming

Gaming involves the development, marketing, and monetization of video games and gambling machines, as well as associated services. Gaming is the running of specialized applications known as electronic games or video games on game consoles like Xbox and PlayStation or on personal computers or mobile phones. Mobile gaming overtakes console and PC gaming to become the largest segment. eSports is one of the fastest growing segments.

Sector developments

Gaming sector startups turnover accounted for 2% of the total turnover generated by the startup sector in the I quarter of 2023. Compared to the last quarter of 2022, we can see an increase in employment taxes paid (18%) and in turnover (16%) and a slight increase in the number of employees in the sector (10%).

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HealthTech, Life sciences & Wellness

Sector uses digital technology to maintain or improve health via the diagnosis, treatment, and prevention of disease, illness, and injuries. It also covers occupational health and safety, sport, welfare and elderly care technologies. Sector includes drugs, medical technologies like diagnostics, monitoring and other devices (e.g. catheters, stents, etc.), hospital and physician costs, dental costs, home health care, unreimbursed insurance, and some other expenses related to healthcare. Overall physical wellness encourages the balance of physical activity (sport and fitness), nutrition and mental well-being to keep body in top condition.

Sector developments

HealthTech, Life Sciences & Wellness startups turnover accounted for 1% of the total turnover generated by the startup sector in the I quarter of 2023. Compared to the last quarter of 2022, we can see a slight decrease in employment taxes paid (-8%) and in the number of employees in the sector (-10%) and decrease in turnover (-16%).

Startups in this sector

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PropTech & Construction

Property technology is the use of information technology to help individuals and companies research, buy, sell and manage real estate. These technologies include property management using digital dashboards, smart home technology, research and analytics, listing services/tech-enabled brokerages, mobile applications, residential and commercial lending, 3D-modeling for online portals, automation, crowdfunding real estate projects, shared spaces management, as well as organising, analysing, and extracting key data from lengthy rental documents. Construction technology refers to the collection of innovative tools, machinery, modifications, software, etc. used during the construction phase of a project that enables advancement in field construction methods, including semi-automated and automated construction equipment.

Sector developments

PropTech & Construction startups turnover accounted for 0,2% of the total turnover generated by the startup sector in the I quarter of 2023. Compared to the last quarter of 2022, we can see a slight increase in employment taxes paid (10%) and in the number of employees in the sector (7%) and a very slight increase in turnover (2%).

Startups in this sector

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Transportation & Logistics

Transportation and logistics technology refers to tools and machines used to solve problems or improve conditions in respect to the movement of people and goods. It includes new transportation technologies such as intelligent transport systems (ITS), connected and autonomous vehicles, alternative fuels, keyless fleet management and traffic analytics and management, as well as local zoning and planning policies that support transit-oriented development. Logistics technologies help to manage the process of planning and executing the efficient transportation (including shipping) and storage of goods from the point of origin to the point of consumption. It includes machine-to-machine connectivity, radio frequency identification (RFID), automatic identification and data capture (AIDC), and Internet of Things (IoT).

Sector developments

Transportation & Logistics sector turnover accounted for 56% of the total turnover generated by the startup sector in the I quarter of 2023. Compared to the last quarter of 2022, we can see a slight increase in employment taxes paid (3%) and number of employees in the sector (3%) and in turnover (3%). One company (Autolevi) made an exit. From that point on, data from this company is no longer reflected in statistics and they are added into the Matured and Exits section in the database. Transportation & Logistics sector is the biggest contributor in turnover and second biggest in the employee count and employment taxes paid during the I quarter of 2023.

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TravelTech

Travel technology is the application of information technology or information and communication technology in the travel, tourism and hospitality industry. Some forms of travel technology are flight tracking, trip planning, journey planner, booking price tracking and so on. Travel technology also include virtual tourism in the form of virtual tour technologies, analysis, design, implementation and application of IT and e-commerce solutions in the travel&tourism industry, as well as the analysis of the respective economic processes and market structures and customer relationship management.

Sector developments

TravelTech startups turnover accounted for 0,5% of the total turnover generated by the startup sector in the I quarter of 2023. Compared to the last quarter of 2022, we can see a slight increase in employment taxes paid (14%) and in the number of employees in the sector (6%) and a decrease in turnover (-22%).