Estonian funds have grown significantly, now managing around a billion euros for new investments, with many expanding internationally.
A panel of venture capital and angel investors, and entrepreneurs from the Estonian startup sector discussing the results the industry has achieved have agreed that the sector has stabilised since peaking in 2021 – and despite 2024 proving to be a challenging year for founders and investors alike, there is as much interest as ever in putting money into the sector, and capital is available. The market itself, meanwhile, has become more aware.
Kaari Kink, the chairman of the Estonian Private Equity and Venture Capital Association (EstVCA), opened the now traditional Estonian Startup Ecosystem Annual Fireside Chat by saying that 2024 was a successful year for venture capital funds and that local funds are currently well capitalised.

“Estonian funds already have around a billion euros at their disposal for new investments, and local funds have grown to become international ones, opening offices abroad and looking outward much more than they did before.”
Kink nevertheless conceded that 2024 was a hard year for fund managers. “People are being a lot more conservative when it comes to capital, and we’re seeing a trend throughout Europe that fund investors are opting to put their money into well-known names,” she said.
Hedi Mardisoo, a member of the management board of the Estonian Founders Society, agreed that raising investments has become more challenging and that startup growth has tailed off.

“Efficiency was the keyword in 2024, and those who survived the year are definitely in better shape and more mature for it,” she said. “But the fact that so few startups were founded here over the last 12 months is a worry – the number of new companies hit an all-time low during the year, and how to help people launching start-ups has become a major structural issue. The risks are big in the sector and the environment isn’t at its most conducive at the moment, which is sure to have an impact on people.”
The panelists agreed that Estonia remains a wellspring of ideas and enterprise, but noted that people are hesitant to change career paths, abandon stable jobs, and take the risk and responsibility of launching startups in uncertain times.
They nevertheless see the future of the sector in Estonia as lying in the younger generation and employees in large, traditional companies.
However, Vaido Mikheim, the head of Startup Estonia who led the discussion, reminded the panelists that as recently as five years ago, people were very optimistic about the local startup sector.
“Was that optimism justified?” he asked. The participants all felt that the Estonian sector remains well positioned compared to other European countries, but acknowledged that Europe as a whole is being outstripped by the United States.
The discussion also touched on the need for the Estonian start-up sector to pivot away from financial services and software development, which have been its primary focus to date, towards innovative areas that are likely to dominate in the future: deep and health technologies; defense and energy; and ever-topical AI.
At the same time, the panelists acknowledged the shortfall in experts needed to develop knowledge-intensive enterprises in Estonia, said it remains vital to attract talent to the country, and urged people to look more to universities, encouraging cooperation between the startup sector and researchers and transfer of technology.
Mardisoo added that thought also needs to be given to enticing researchers who have left Estonia and set up companies abroad to return to the country.
Predicting developments in 2025, the panelists agreed that the Estonian startup ecosystem needs new exits, i.e. companies that have reached the point of sale, as this will bring money back into the market, benefitting funds and startup founders alike.
However, they also agreed that owners should not be pressured into selling, especially if market conditions are not conducive to it.
Featured image credit: edited from The Estonian Private Equity and Venture Capital Association (EstVCA)