The global economy is yet to fully recover after an economic downturn, but Estonia’s startup sector is marching ahead at full speed, according to a recent report from Startup Estonia covering the first half of 2024. What are the highlights?
According to the Estonian Tax and Customs Board, the sector posted a turnover of €1.69B in the first half of 2024. This represents an 11% increase compared to the same period in 2023, when the turnover stood at €1.53B. The growth is particularly striking when contrasted with the broader economic environment in Estonia, where the total turnover of all taxpayers decreased by 4%.
Top performers
Scale-ups led the charge: Bolt generated a staggering €618.3M, followed by Pipedrive with €130.8M and Veriff with € 59.1 M. Other top contributors included Defsecintel (€25.7M) and Playtech (€24.3M). Overall, the turnover of the top 10 companies accounted for 57% of the entire sector’s.
One notable thing is the rise of DefenceTech, one of Estonia’s most in-demand emerging sectors. “The increasingly complex security situation in Europe has heightened the demand for modern and battle-proven equipment and solutions that ensure the security of national borders and facilitate the detection of malicious drones. Our AI-powered devices and software enable clients to achieve this in a novel and efficient manner,” said Jaanus Tamm, CEO of DefSecIntel.
The next goal is to diversify the landscape even more, with a particular bet on DeepTech — the Estonian government currently aims to double the number of DeepTech projects by 2025 and increase it five times by 2030. This way, the country should have more than 500 startups in various research-heavy niches by the start of the next decade. More importantly, 75 of them should reach the scale-up status, employing more than 50 specialists in Estonia and contributing over €1M in labour taxes yearly.
Taxes & salaries — steady growth amidst stability
Yet even now, the contribution of Estonian tech companies to the national economy is already more than impressive.
At the end of the first half of 2023, the total employment tax amounted to €166.1M. By the end of June 2024, this figure had risen to €169.4, marking a year-on-year growth of 2%. Hiring slowed down a bit, but make no mistake — Estonia remains a great place to strengthen your talent pool.
Key contributors to this tax revenue were, yet again, some of the biggest names in the sector. Bolt led with €20.1M in employment taxes, followed by Wise with €18M, and Pipedrive with €8.3M.
The competitiveness of the Estonian startup sector is also evident in the salaries offered to employees. According to Statistics Estonia, the average monthly gross salary in the sector during the first six months of 2024 was €3,609. This is nearly double the national average.
Interestingly, employees in the 41-50 age bracket earned the highest average monthly gross wage at €4,462, followed closely by those in the 31-40 bracket, who earned an average of €3,912. Foreign employees also fared well, with an average monthly gross wage of €3,739.
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