Europe’s start-up leader
It’s difficult to estimate how many start-ups are currently in operation in Estonia due to the fairly rapid expansion in their numbers in the last few years – according to Enterprise Estonia, 10 to 20 new tech start-up companies are set up every year. And, according to the Wall Street Journal, Estonia produces more start-ups per head of population than any other country in Europe.
The most successful start-ups in Estonia are online service providers, or those who work in the fields of social networks and software development (although there are many examples of companies that have chosen a different path to success). As a result and wide recognition all over the world, Estonian start-ups have become globally known as Estonian Mafia. Estonian Mafia is a code word for an Estonian start-up community (twitter hashtag #estonianmafia), which is gaining visibility on a global scale. According to Jüri Kaljundi, a well-known figure on the Estonian start-up scene, the term was coined by investor Dave McClure when he was trying to make sense of Erply and Zerply, two Estonian start-ups.
The boom in the number of start-up entrepreneurs in Estonia is influenced by a number of factors, including taxes and how companies are registered in the country. Estonia has one of the most liberal tax regimes in the world, whereby companies only have to pay corporate income tax on their dividends. Setting up a company is also both really easy and really cheap in Estonia. In recent years, the government has been encouraging people to start their own businesses and has simplified the paperwork would-be business owners have to complete. Right now, people can establish a private limited enterprise online in 30 minutes and the initial payment (a minimum of €2,500) doesn’t have to be paid when the company is founded, although the founders do have to specify the date when they’ll make the payment.
There’s also some other government support for would-be start-up owners: Estonia has some state-backed organisations and foundations that provide informational and financial help for entrepreneurs and start-ups such as the Estonian Development Fund and Enterprise Estonia. Near to the Tallinn University of Technology you can find the Tehnopol Science Park, a business hub that houses over 150 technology companies; while the city centre is home to the Garage48 Hub, a community-led co-working space for over 20 companies.
Top 10 Estonian start-ups to watch
The most promising Estonian start-ups to keep an eye on, here is the list. But to be noted, this list is definitely not a final one.
- Transferwise - cheap money transfers. Charges a fraction of the price that banks and others charge for currency conversion.
- Creative Mobile – mobile games.
- Erply – POS and ERP tools.
- ZeroTurnaround - Java productivity tools, loved by developers.
- Marinexplore - marine data place for the ocean community.
- Grabcad - community of mechanical engineers & engineering workflow tools.
- Pipedrive - CRM and pipeline management tool.
- Vital Fields – farming weather forecasts.
- Flirtic.com - dating service.
- Click and Grow – a self-watering flower pot.