Turnover of Estonian start-ups nearly doubled


Last year, the total turnover of Estonian start-ups grew to EUR 1.4 billion, and labour taxes paid to the State amounted to EUR 125 million. The volume of investments by start-ups more than doubled, to a record EUR 928 million.

Eve Peeterson
Eve Peeterson

According to Eve Peeterson, Head of Startup Estonia, Estonian start-ups showed the fastest growth ever last year. ‘It was an exceptional year, even for start-ups orientated towards fast growth. While in the past years we have talked about a 30 to 40% growth in annual turnover, then in 2021, start-ups increased their turnover by almost 80%. However, the volume of investments more than doubled, to almost a billion euros, and both the number of companies that have attracted investments and the size of deals have increased, with 47 start-ups closing deals larger than a million euros last year,’ said Peeterson.

While the total turnover of Estonian start-ups was EUR 782 million in 2020, within the year, start-ups increased their turnover to EUR 1.4 billion, i.e., by 77%.  The start-ups with the highest turnover in 2021 were Bolt (EUR 723 million), Adcash (EUR 33 million), Veriff (EUR 25.1 million), 3Commas Technologies (EUR 24.7 million), and Paxful (EUR 23.6 million). The turnover data for businesses involves data published quarterly by the Tax and Customs Board on the basis of VAT returns submitted by persons liable to value added tax, and are therefore not comparable with the annual accounts of taxable persons.

Estonian start-ups paid a total of EUR 125 million in labour taxes to the State in 2021, up 29% from the year before, when the start-up sector paid EUR 97 million in labour taxes. The biggest payers of labour taxes were Bolt (EUR 18.9 million), Wise (EUR 17.7 million), Veriff (EUR 5.2 million), Paxful (EUR 4.8 million), Starship Technologies (EUR 3.3 million), Milrem (EUR 3 million), and Monese (EUR 2.6 million).

The Head of Startup Estonia explained that the statistics on Estonian start-ups are also affected by the fact that more and more local start-ups are becoming mature, i.e., older than ten years, and their data are no longer included in the statistics. ‘In 2021, seven start-ups became mature, and there have also been four sales of start-up companies.  For this reason alone, last year’s statistics do not include nearly five million euros in turnover and over 700 thousand euros in labour taxes,’ explained Peeterson.

In the course of 2021, Upsteem.com, Estelon, Edrk, Ganttic, Fututec, Click & Grow, and Kompaktfilter became mature, and there were four exits, i.e., sales of start-up companies: Icefire, GetID, SpectX, and AlphaChat. In Q3 last year, start-up company Wise went public on the London Stock Exchange, which became the first direct listing of a technology company in the history of the London Stock Exchange, according to Reuters.

Estonian start-ups raised a record-breaking EUR 928 million in investments in 2021. Compared to the year before, the average size of the investment involved has also increased, to EUR 10.3 million (EUR 5.8 million the year before). The number of start-ups attracting investments has also increased, with 90 start-ups attracting at least one investment (up from 76 the year before), including 47 deals of EUR 1 million or more (up from 32 the year before).

The largest investment in 2021 was once again attracted by Bolt (EUR 620 million), followed by Glia (EUR 64.1 million), Veriff (EUR 58 million), Starship Technologies (EUR 14 million), Scoro (EUR 13.8 million), Wolf3D (EUR 11.5 million), Testlio (EUR 10.3 million), Katana (EUR 9.3 million), Pactum (EUR 9.1 million), and Fractory (EUR 7.5 million).

According to the Startup Estonia start-up database, there are 1,298 start-ups operating in Estonia today, and as at today, 117 start-ups created in 2021, or 9% of all start-ups in the database, made it to the database in 2021. Of these, 19 are active in end-consumer products and services, and the same amount is engaged in business software and services, while 13 new start-ups began operating in the field of financial technologies.

The largest sector occupied by Estonian start-ups continues to be business software and services, which accounts for 240 start-ups in the Startup Estonia database. Financial technology comes second, with 171 start-ups, and consumer products and services comes third, with 141 start-ups registered. The sectors with the largest turnover are transport and logistics (EUR 791 million), financial technology (EUR 149 million), and business software and services (EUR 113 million).

Startup Estonia connects and supports Estonian start-ups. Startup Estonia collects data in cooperation with startups and the published statistics are based on data from startups, the Estonian Tax and Customs Board, and Statistics Estonia. Startup Estonia is a national programme to develop Estonia’s startup ecosystem, boosting the emergence of startups and international success stories. The programme of Startup Estonia is carried out by KredEx. Startup Estonia’s research accelerator activities are carried out by SmartCap.

The Startup Estonia programme (project number EU50651) is financed using funds from the European Regional Development Fund.