Estonian startups' 2022 turnover up 49 percent on year, exceeds €2 billion

Wise's new Tartu office. July 2022.
Wise's new Tartu office. July 2022. Source: Andres Raudjalg

Estonian startups generated €2.1 billion in turnover in 2022, marking an increase of 49 percent on year, Startup Estonia announced Wednesday.

According to Estonian Tax and Customs Board (MTA) statistics, Estonian startups paid €185 million in employment taxes in 2022, which is 47 percent more than in 2021, Startup Estonia said in a press release.

Funding deals, meanwhile, totaled €1.3 billion, with a growth rate of about 40 percent compared with the previous year.

Startup Estonia chief Eve Peeterson noted that startup turnover numbers and investment volumes in other parts of the world declined as a result of 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," Peeterson said. "But in the third quarter, it was clear that efficiency and business sustainability were becoming more important than turnover numbers. This demonstrates the maturity and experience of our founders in managing companies and the will to prepare for possible setbacks in advance."

To date, the Estonian Startup Database is home to 1,444 startups, with 98 new startups established thus far in 2022 and 2023.

According to the MTA's quarterly data, Estonian startups generated €2.1 billion in turnover in 2022, marking a 49 percent increase compared with 2021 results.

The largest turnovers were generated by Bolt with €1.1 billion, accounting for just over half of the sector's total turnover, Veriff with €71 million, Swappie with €58.4 million, Comodule with €36.7 million and Starship Technologies with €31 million.

Turnover data is published based on quarterly data from the MTA and is thus not comparable with the data from the companies' fiscal year annual reports.

Estonian startups paid €185 million in employment taxes in 2022. According to MTA figures, the most significant contributors to employment taxes among startups were 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, 20 startups exceeded the ten-year age limit for a startup and five startups were sold last year, due to which €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.

Based on the crowdsourced database and the Estonian Startup Database, Estonian startups signed 77 funding deals in 2022, exceeding the €1 billion mark for the first time with a total of €1.3 billion, including 54 deals valued at more than €1 million each.

Average investment size up to €17 million

The number of startups to attract investments last year decreased — from 90 startups involving at least one investment in 2021 to just 77 transactions last year.

Nonetheless, the average investment size increased on year from €10.3 million to €17 million.

€928 million in total investments were raised in 2021, indicating a growth rate on year of about 40 percent.

"The decrease in the number of transactions shows that investors today are taking more time to plan investments, and that money is moving smarter than before," Peeterson commented. "This is to be expected as times are volatile and we don't know the extent or duration of the changes taking place."

According to the Startup Estonia chief, it's quite natural for startups to focus on optimizing operational costs, which allows them to survive difficult times as well if needed, and if new investments can't be raised in sufficient volumes or quickly enough.

Investors are currently expecting an increase in efficiency from startups as well, she added.

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

€1.2 billion turnover in transport and logistics

Business software and services is the largest field of activity in which Estonian startups operate, accounting for 251 of companies included in the Startup Estonia database.

Financial technology (fintech) is the second modt popular field, accounting for 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, fintech with €196 million and business software and services with €162 million.

Startup Estonia collects data in cooperation with startips based on the latter's reported information as well as data from Statistics Estonia and the MTA.


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Editor: Aili Vahtla

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