Estonia is a 99% digitalised country, and Estonian unicorns maintain the country’s image of a well-developed digital society.
Among hundreds of promising ideas, there are: a drone for the inspection of power lines and power pylons, a Tuul scooter with an electronic motor, a rapid drug test that determines the presence of illegal drugs in the blood with laboratory accuracy. These are the ideas of small startups located in the scientific town of “Technopol”.
There are particular funds that support technology development and new startups. Yana Budkovskaya is the head of Prototron, the fund that supports young talents for eight years now. Last year they invested more than 1 000 000 EUR.
Last year there were presented about 800 ideas looking for both fintech and mentor support.
“We help create our web page. Then in partnership with Fundwise, we have a hybrid platform where some teams can learn to make their first crowdfunding campaign do. In addition, all our founders of Tehnopol, Talltech, Swedbank, also a big partner of Tartu University, help with the specialists, experts and mentors. And all who still support us, is the city of Tallinn, and Samsung, and Amazon, and Microsoft, also participate as mentors,” lists Budkovskaya.
The maximum amount of money a startup can get is 35 000 EUR. Such an approach brings results. The four unicorns that are evaluated in more than 1 000 000 000 $ — Skype, Bolt, TransferWise, Playtech and Pipedrive.
Last year, Pipedrive was acquired by American investors for $1.5 billion. The secret of the company’s success lies in the unique platform for managing its business relations with clients. The Pipedrive sales agents turned out to be indispensable.
“He helps to organise his calendar. This is his first feature. It gives you a visual image from which you can trace at what stage in relation to your clients. You can keep a full client database. What you talked about, what deals you made. We also have an analyst,” explained by Pipedrive client-manager Victoria Babisashvili.
The foreign labour force compensates the shortage of “IT players” in the company. Still, the shortage of specialists is not entirely solved as in the entire IT sector of Estonia.
The new Minister of Entrepreneurship and Info-Technology is Andres Sutt (Reform Party), who described his immediate plans in the IT-sphere.
“5G is definitely one of the first steps. We have to hold a competition and find telecom companies that will develop the technology further. Everything about cybersecurity is also important. E-State must develop,” says Sutt.
In the Minister’s plans – development of Estonian “Siri”, that is artificial intelligence, a kind of assistant in the phone. Sutt also plans to create an e-services package for business. So that an entrepreneur can access all necessary registers, departments, licenses and documents through a single site or application, such an approach would open the door and speed up business communication with the State, the Minister believes. The country should also be open to foreign professionals, especially in the IT area.
“If we look at startups, in 2020, the number of new companies was about 1050, in 2019 – 650. So the number went up sharply. And if you look at how much they’ve been able to attract investment, you get 450 million euros. That’s a record. The previous achievement was established in 2018,” Sutt emphasises.
The Minister’s logic is that the presence of the necessary number of foreign experts allows business to expand, which in turn helps to reduce unemployment and create new jobs. At the same time, people’s desire to retrain is fundamental because infotech will soon take up a significant part of the economy.
Startups contributing to GDP
“If we look to the future, to “Green Turn”, to “Digital Turn”, then info-technology is not only a business of the IT-sector, it will be part of the business in every sector of the economy. Whether in industry or in services. I think these changes are huge,” said the Minister.
“Today, there are about 1,000 startups in Estonia. All startups forecast their growth. And startup communities like us also predict growth. And they want to see a tenfold increase by 2050. That means we want 10,000 startups. And if today’s GDP that comes from startups is about 3%, imagine if our startups are about a third of GDP. This is a very real future for Estonia. As long as we do not slow down,” Budkovskaya is optimistic.
The specialists of Company in Estonia OÜ will be happy to assist with company registration in Estonia.