The total turnover of Estonian startups exceeds the €2 billion mark in 2022

The turnover of Estonian startups exceeded the two billion euro mark in 2022, increasing by half over the year.

According to the Estonian Tax and Customs Board statistics, Estonian startups paid €185 million in employment taxes during 2022, which is 47 per cent more than in 2021. Funding deals marked the line of €1.3 billion with a growth rate of about 40 per cent compared with the previous year. 

The head of Startup Estonia, Eve Peeterson, noted that although in other parts of the world, the turnover numbers of startups and the volume of investments declined due to the war in Ukraine and economic uncertainty, the Estonian startup sector showed record growth last year.

“Last year, the Estonian startup sector continued to grow, but in the third quarter, it was clear that efficiency and business sustainability were becoming more important instead of turnover numbers. This shows the maturity and experience of our founders in managing companies and the will to prepare for possible setbacks in advance,” Peeterson said.

The head of Startup Estonia, Eve Peeterson.

Bolt made over half of the turnover in the startup sector

To date, the Estonian Startup database is home to 1,444 startups, with 98 new startups created so far in 2022 and 2023. Since the interactive nature of the database, this is not a finite number, as many startups founded in the given year will be added later. 

The database currently contains 209 startups registered in Estonia in 2021 and 239 in 2020, while the rest is added in previous years. According to the State of European Tech 2022 report, Estonia has the highest number of startups per capita, 1,090 startups per one million inhabitants, followed by Iceland and Ireland.   

The quarterly data from the Estonian Tax and Customs Board states that Estonian startups have generated €2.1 billion in turnover in 2022, which is a 49 per cent increase compared with the 2021 results. 

The largest turnovers were generated by Bolt, €1.1 billion, making up a bit more than half of the turnover in the sector; Veriff, €71 million; Swappie, €58.4 million; Comodule, €36.7 million; and Starship Technologies, €31 million. Turnover data is published based on the quarterly data from the Estonian Tax and Customs Board and is therefore not comparable with companies’ financial year annual reports data.

Tuul electric scooter, manufactured by Comodule, driven in Tallinn’s Telliskivi Creative City.

Funding deals worth of €1.3 billion

According to the Tax and Customs Board, Estonian startups paid €185 million in employment taxes during 2022, 47 per cent more than in 2021. The most significant contributors to employment taxes among startups are Bolt with €30.7 million, Wise with €25.2 million, Veriff with €8.5 million, Starship Technologies with €4.9 million and Monese with €4.2 million.

Meanwhile, while 20 startups exceeded the ten-year age limit for a startup, and five startups were sold, €30.5 million in turnover and €4.4 million in employment taxes paid to the state are not reflected in last year’s startup sector statistics.

Employment taxes paid by the Estonian startups. Source: Startup Estonia.

Based on the crowdsourced database and the Estonian Startup Database, Estonian startups signed in 77 funding deals in 2022, exceeding the one billion euro mark for the first time in history and landing at €1.3 billion, with 54 deals valued at more than a million euros. 

However, the number of startups that attracted investments decreased – in 2022, 77 transactions took place, but the year before, 90 startups involved at least one investment. Nevertheless, the investment’s average size has increased compared with the previous year. In 2022, the average investment size was €17 million, while it was €10.3 million the year before. The total investment raised in 2021 was €928 million, which makes the growth rate about 40 per cent. 

“The decrease in the number of transactions shows that today investors are taking more time to plan investments and money is moving smarter than before. This is to be expected as times are volatile and we do not know the extent or duration of the changes taking place. It is quite natural for startups to focus on optimising operational costs that allows them to survive also difficult times if needed and if new investments cannot be raised in sufficient volume or at necessary speed,” Peeterson said, confirming that investors are currently expecting an increase in efficiency from startups as well.

Investments to Estonian startups in 2022. Source: Startup Estonia.

The biggest investments in 2022 were raised by Bolt with €628 million, Veriff with €89 million, Starship Technologies with €87.4 million, Ready Player Me with €55.1 million and Glia with €40.9 million.

The highest turnover in transport and logistics

The largest field of activity of Estonian startups is business software and services, where 251 of the companies in the Startup Estonia database operate. In second place is the field of financial technology with 196 startups, followed by the field of end-user products and services with 155 startups. The areas of activity with the highest turnover are transport and logistics with 1.2 billion euros, financial technology with €196 million and business software and services with €162 million.

Startup Estonia brings together and supports Estonian startup entrepreneurs. It collects data in cooperation with startups based on the latter’s information as well as data from the Tax and Customs Board and Statistics Estonia.

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