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Startups more than double employee numbers in five years

The number of people employed in the Estonian startup sector grew by 130 percent in five years, whereas the sum total of labor taxes paid by the sector's companies more than tripled during the same period, Startup Estonia said on Friday.

In 2016, when systematized data on the sector began to be collected, a total of 2,625 people worked at Estonian startups and startup companies paid a total of €28 million in labor taxes to the state in that year.

At the end of 2020, the number of people employed in the Estonian startup sector was 6,072, or 2.3 times higher, and the total amount of labor taxes paid to the state was €97 million, or 3.4 times higher.

Signe Reinumagi, project manager for the Estonian startup sector monitor, said the data collection has become more systematic year on year and provides a more accurate overview of the sector's development.

"The summary overview of previous years clearly shows that the Estonian startup sector has undergone strong development in recent years and that Estonian startups are attractive employers and important taxpayers," Reinumägi said, adding that the creation of a new database on startups at the beginning of last year has made a major contribution to the availability of more accurate statistics.

In 2017, employees in the startup sectors numbered 2,981 and labor taxes totaled €36 million. By 2018, Estonian startups increased the number of employees to 4,529 and €53 million was paid to the state in labor taxes. In 2019, the corresponding figures were 5,998 people and €78 million.

In early 2020, Startup Estonia introduced an updated startup database, which provides a more accurate statistical overview of startups and developments in the startup sector in Estonia. According to Startup Estonia, it is the most comprehensive startup database known in the world.

"We collect data primarily in cooperation with startup entrepreneurs, which means that our statistics is based on data provided by startups, and we are pleased to see that data is being entered and updated ever more actively. In addition, we aggregate information from various public sources and from the Estonian Tax and Customs Board and Statistics Estonia," Reinumägi added.

The startup database managed by Startup Estonia contains the name, registration code and year of foundation of the startup, as well as more detailed information on the sector of operation and technologies used, descriptions of products and services, information on the number of employees and labor taxes paid, turnover and investments, and much more.

By convention, the database includes startups registered in Estonia as limited liability companies that have been in business for ten years or less and are oriented towards rapid global growth, with a globally scalable product or service and business model.

Startup Estonia is a national program that unites and supports Estonian startups. The Startup Estonia program is implemented by Kredex. The activities of the Startup Estonia research accelerator are carried out by SmartCap.

Startup Estonia has been collecting data on the number of people employed in the Estonian startup sector since 2016.

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Editor: Helen Wright

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