Present and future of Estonian startup scene (4)
For a while now, Estonia has been hailed as one of world's top startup nations. Startup Estonia, the support unit of Estonian startups, explains the stats behind this reputation and challenges to be overcome to keep the startup scene going.
Local startups are an important contributer to Estonian economy – during last six months the state has collected 11.7 million euros in tax revenue from local startups, that currently employ 2,154 specialists.
"Today we have 404 startups in total, among them both early-stage startups that are yet to find investors and establish themselves, but also growth-phase startups ready to be launched in the world and conquer global markets," said Startup Estonia CEO Mari Vavulski.
According to her, it is clear that Estonian economy benefits greatly from startups as they create high paying jobs, generate tax revenue, attract foreign investments and increase investor’s interest in the country. "Startups also contribute to introducing our small country on a global level and convey a clear message about Estonians’ can-do attitude and innovativity entrepreneurship. Local startups have a drive to develop products and services that are able to compete on a global level. In addition, it is important to note, that 80 percent of specialists employed by local startups live and work in Estonia," Vavulski said.
Since 2014 Startup Estonia, the support unit for local startups, has been managed by Estonian Development Fund with a main goal to identify the weak spots of local startup ecosystem and provide solutions to create a supporting environment for startups. "During the first year Startup Estonia launched a number of successful programs that help startups to validate business ideas and achieve investment readiness, in addition two seed funding programs were introduced. We also helped to expand local investor network and introduce Estonian startup ecosystem in foreign countries,“ Vavulski explained.
In total, 98 startups participated in eight programs initiated by Startup Estonia and 71 graduated successfully. In addition, 20 percent of the 71 startups that graduated participated in two or more Startup Estonia programs. In total, 1.9 million euros of growth capital was raised. From the local programs provided by Startup Estonia, four startups moved on to participate in international accelerators: Sorry as a Service, Deltabid, Results on Air and Deekit.
In addition, Estonian startup came third in ClimateLaunchpad, the biggest competition for cleantech startups, and another landed in top 15.
According to Vavulski, local startup scene is in a good place, but lack of smart capital and globally competitive projects might become the main obstacles in the near future. "The cause for both obstacles is our young startup ecosystem. This means that we don’t have a generation of entrepreneurs who possess a long-term comprehensive experience in startup business and would be willing to re-invest their experience and capital into new startups. The next major goal for Startup Estonia is to unclog these bottlenecks by investing into knowledge-intensive and high-tech Estonian enterprises in early stage and provide them with management consulting services needed to step up the game and bring the start-up to a new level," Vavulski explained.
Startup Estonia aims to make sure that Estonia would become European leading startup center by year 2020 and could prove startups with whole and operative environment for development.