The third quarter of 2024 for the Estonian startup sector  

Over the past nine months, Estonia’s tech scene has been buzzing with activity—turnovers rising, investments booming, and acquisitions shaking things up. But don’t just take our word for it, the numbers speak for themselves. We’ve been digging into the data (and no, not just to make pretty charts), refining our insights, and broadening the scope to give you a clear snapshot of where the Estonian startup sector stands as of Q3 2024.  

Over the past nine months, we have been steadily updating and refining our data in Dealroom. While work is ongoing, the results so far are encouraging. Our priority remains ensuring data accuracy and broadening the scope to cover growth companies, offering comprehensive insights into the startup ecosystem in Estonia. 

Some readers might notice inconsistencies with previous reports, which result from these continuous improvements. As 2024 serves as a pilot year, we are focused on refining accuracy to better reflect economic trends. 

Employment numbers and taxes 

Statistics from the Estonian Tax and Customs Board reveal that as of the end of the third quarter of 2024, Estonian startup sector companies employed 14 267 people locally. The workforce continues to undergo a slight decrease, declining by 3% compared to the end of the third quarter of 2023 when the employee count stood at 14 687. 

Of the total number of people employed in the sector at the end of Q3 2024, 45% were employed by the top 10 startup sector companies in Estonia. The leading employers include Wise with 2028 employees, followed by Bolt with 1321 employees, Playtech with 653 employees, Yolo with 553 employees, and Swappie with 435 employees.

Based on statistics from the Estonian Tax and Customs Board, there has been a slight growth in employment taxes paid, with the sum of employment tax contributions at the end of Q3 2024 amounting to 273 million EUR (+4% compared to Q3 2023). The top contributors of employment taxes among sector companies in Q3 were Bolt with 31,1 million EUR, Wise with 28 million EUR, Playtech with 13,8 million EUR, Yolo with 11,7 million EUR, and Pipedrive with 11,4 million EUR. 

Turnover,  investments, and exits 

By the end of the third quarter of 2024, Estonian startup sector companies generated 2701,3 million EUR in turnover, marking a 10% increase compared to the same period in 2023 (2463,1 million EUR). Among sector companies, the largest turnover was generated by Bolt with 983,7 million EUR (36% of sector turnover), followed by Pipedrive with 203 million EUR, Veriff with 76,7 million EUR, Yolo with 49,1 million EUR, Playtech with 41,7 million EUR. Notably, the top 10 companies contributed 56% of the sector’s total turnover during the first three quarters of 2024, underscoring the concentrated strength of leading players in the startup ecosystem. 

This strong growth stands in contrast to the broader Estonian economy. While the startup sector saw a 10% increase in turnover during the first three quarters of 2024, the total turnover of all Estonian taxable persons decreased by 2.5% over the same period.  

Please note that turnover data is published based on the quarterly data from the Estonian Tax and Customs Board and therefore is not comparable with companies’ financial year annual reports data. 

According to the crowdsourced table, a total of 302,7  million EUR was invested in sector companies during the first three quarters of 2024, marking a 1.5-fold increase (approximately 52%) compared to the same period in 2023 (199.2 million EUR). Of this, 63.7 million EUR was raised in the third quarter alone! There were 49 new investment deals, with 25 deals valued at more than 1 million EUR.  

The largest investments during the first three quarters of 2024 were made into Starship Technologies (90 M EUR), Stargate Hydrogen (42 M EUR), Elcogen (30 M EUR), Tuum (25 M EUR), Pactum (18,4 M EUR), Bot Guard (12 M EUR), eAgronoom ( 10 M EUR), Mifundo (10 M EUR), Bisly (6,2 M EUR), Äio (6,1 M EUR). 

In the third quarter, we witnessed several acquisitions within the ecosystem, reflecting continued consolidation and growth across the sector. In July, Germany’s digital tax filing platform, Taxfix, acquired Estonian-founded TaxScouts. In August, Swedish banking group Swedbank AB acquired the Tallinn-based fintech company Paywerk. In September, Wisnio joined forces with the Assessio Group. These acquisitions highlight the ongoing dynamism in the Estonian startup and fintech landscape, with international companies recognizing the value and potential of local talent and innovation. 

DeepTech companies in the startup sector 

DeepTech companies in the startup sector contributed 42.7 million EUR in employment taxes, generated 232.5 million EUR in turnover, and employed 2,409 people locally—representing about 17% of all sector employees by the end of the third quarter of 2024. Among these DeepTech companies, the highest turnover was achieved by Defsecintel with 32 million EUR, followed by Threod Systems with 25.4 million EUR, and Cleveron with 23.4 million EUR. 

In the first nine months of 2024, DeepTech companies raised 198.7 million EUR (66% of total sector investments) across 18 deals. Of these, ten deals were valued at 1 million EUR or more, including Starship Technologies (90 million EUR), Stargate Hydrogen (42 million EUR), Elcogen (30 million EUR), Pactum (18.4 million EUR), Äio (6.1 million EUR), GScan (3 million EUR), UpCatalyst (2.3 million EUR), 10Lines (1.5 million EUR), Nanordica (1.1 million EUR), and Kingdom Technologies (1 million EUR). 

This level of economic activity underscores the critical role DeepTech companies are playing not only in advancing cutting-edge technologies but also in driving local employment and contributing to the broader economy.  

Summary 

Despite a slight drop in employment, the Estonian startup sector has continued to show resilience and growth where it counts—turnover is up by 10%, and investment levels have soared. DeepTech is doing its thing by quietly changing the world by stepping up with some impressive numbers of its own. The broader economic context may be less rosy, but startups are proving their value, contributing heavily to employment taxes and innovation alike. As we move into the final quarter of the year, it’s clear that the Estonian startup ecosystem remains dynamic, even in the face of challenges. Stay tuned for what comes next! 

Author: Moonika Mällo, Startup Estonia, Startup sektori monitooringu projektijuht

Sources: Startup Estonia, Estonian Tax and Customs Board, Dealroom, Funding of Estonian Tech Startups #estonianmafia