Taxes paid, funding raised, popular industries and more – startup statistics from 2016

Tuesday March 14th, 2017

Startup Estonia presented the statistical overview of how 2016 went for the Estonian startup scene, including the stats about paid taxes, raised funding, the biggest employers, most popular industries and much more. 

There are currently a little over 400 startups in Estonia and roughly 90% of them are in the very early - prototyping, seed - or early stages of development. In the end of 2015, the startup count was about the same, due to natural selection and the fact that with launching the new startup database together with Funderbeam, we narrowed down the criteria for startups. So some have grown out of being a startup (celebrated already their 11th birthday) or on the other hand might still too early to be considered a company (“2 guys and a dog in a garage”).

Estonian startups are a heterogeneous bunch and cannot be defined by a ruling industry. Widest spread common keywords are “IT services” and “B2B”, which are rather vague. To narrow it slightly more, 4 more prominent categories do come out: 

Fuelling the economy. Although there is a belief that startups are mostly good at burning through money rather than making it, our statistics show that they are actually significantly and growingly contributing to the economy. By the end of Q3 2016, Estonian startups had already paid the same amount in employment taxes to the government as they did for the whole 2015. All in all, the startups' tax contribution grew from €21M in 2015 to €28M in 2016.

The number of people employed in Estonian startups is growing rapidly and has reached 3500 people as of the end of 2016. Comparing this number to the year before, startups have attracted an additional 1000 people in that year to join them. The general rule of thumb shows that 3/4 of all people employed by the Estonian startups are employed in Estonia, meaning approximately 800 of the new jobs were created in Estonia and 200 outside of the country.

The graph below is an evidence of some Estonian startups becoming more and more mature. 5% of startup companies account for 50+% of the jobs and 3/4 of all tax contributions.The biggest bread-giver is Transferwise, who has altogether a 600 people on their payroll, 400 of which are in Estonia. Followed by Pipedrive (240), Adcash (200), Zeroturnaround (170) and Creative Mobile (100). 

Estonia welcomes startup founders and talent! With the Estonian startups growing, the need for talent is becoming more important than ever. To address this need, a new Startup Visa program was launched on January 18th and the Startup Committee has already received over 40 applications, approving 9 and declining 16 of them. Others are still under review or waiting for additional information from the applicant. The biggest interest so far is from Ukraine, followed by Russia, Belarus, US, UK. 

*The data presented in this overview has been collected from the crowdsourced investment database “Funding of Estonian Startups”, crowdsourced database "Startup jobs & headcount", Startup Estonia and Startup Heatmap.

Read more about the investments and full article HERE.

(Source: startupestonia.com